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  • 4
    Oct
    2012
    7:30am, EDT

    Fourth California city faces bankruptcy as municipal 'disease' spreads

    A fiscal emergency is considered the first step towards Chapter 9, said CNBC's Jane Wells, reporting on whether Atwater, California will become the fourth town to declare bankruptcy in the state.

    By NBC News staff and wire reports

    Municipal bankruptcies are spreading like a “disease” in California, one public finance expert warned Wednesday as the city of Atwater declared a fiscal emergency with a budget gap of more than $3 million.

    The city’s council approved the move on Wednesday night, putting it on the path to becoming the fourth city in the state to declare bankruptcy this year.

    With a population of 28,000, Atwater fell on hard times after its housing market imploded and sent property tax revenue plummeting. Furloughs and a hiring freeze had not been able to stem Atwater's losses.

    San Bernardino becomes 3rd Calif. city in 2 weeks to file for bankruptcy protection

    Municipal debt market analysts are keeping a close eye on the finances of local governments in California out of concern that some could use fiscal emergency declarations as a way to speed Chapter 9 filings to attempt to shed financial obligations.

    "In California, we have a disease, and the disease is spreading," David Kotok, chief investment officer at Florida-based Cumberland Advisors, told the State & Municipal Finance Conference conference in New York on Wednesday, according to the San Francisco Chronicle.

    "I suspect we're going to see wholesale warnings and downgrades" among bond rating issuers in the state, he said.

    If it went bankrupt, Atwater would follow Stockton, San Bernardino and Mammoth Lakes by making a Chapter 9 filing.


    Follow @NBCNewsUS

    San Bernardino, California's city council in July authorized a bankruptcy filing after declaring a fiscal emergency. The city of 210,000 residents 65 miles east of Los Angeles, filed for bankruptcy on August 1.

    By contrast, Stockton, a city of 300,000 located about 62 miles to the northwest of Atwater, became California's first city to file for Chapter 9 bankruptcy protection this year after 90 days of inconclusive mediation with its creditors.

    Kim Rueben of the Tax Policy Center explains why some American cities are running out of money, filing for bankruptcy, and making drastic cuts in the process.

    Mammoth Lakes, a resort town of about 8,000 residents in California's Sierra Nevada mountains, followed Stockton into bankruptcy court, saying it could not afford a $43 million legal judgment against it. Mammoth Lakes has since reached a settlement with the property developer in the legal dispute and later this month will seek to have its bankruptcy case dismissed.

    City officials in Atwater are looking into options for increasing revenue such as raising 20-year-old rates for water services and 10-year-old rates for garbage collection services while clamping down on costs, all while considering whether to pursue a bankruptcy filing.

    Union representative Nancy Vinson said 38 of Atwater's non-safety employees have received layoff notices and that 12 are sure to lose their jobs as part of the city's efforts to pare spending.

    Vinson told Reuters by telephone that she believes Atwater's financial troubles are so severe that the city will not be able to avoid a bankruptcy filing.

    "I believe they're heading straight to bankruptcy," she said.

    Mayor Joan Faul could not be reached by Reuters for comment.

    Reuters contributed to this report.

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    128 comments

    California is going Broke and other states and Governor's, like Martin O'Malley in Maryland, want to copy everything California and apply those to their States!!! What a joke.

    Show more
    Explore related topics: economy, bankruptcy, city, california, finance, government, us-news, featured
  • 1
    Jun
    2012
    12:35pm, EDT

    US v John Edwards: The verdict on the verdict

    TODAY's Savannah Guthrie and NBC's political director, Chuck Todd, debate the possibility of the Justice Department seeking a retrial in the John Edwards case and whether a political comeback is likely for the former presidential hopeful.

    By Hampton Dellinger, Special to NBC News

    ANALYSIS

    By not losing on any of the six felony counts for which he was being tried, John Edwards won the biggest victory of his political and legal life on Thursday. A mistrial on five counts and an acquittal on one resulted in a clear -- if not complete -- legal vindication and a likely fatal setback for federal prosecutors seeking to convict the former U.S. senator and 2004 Democratic vice presidential nominee for allegedly violating the Federal Election Campaign Act.    

    Arguably the most famous American lawyer since Clarence Darrow to face a criminal trial, Edwards may well see the inside of a courtroom again, but as a still-licensed attorney rather than as a criminal defendant facing retrial. 

    Having followed the investigation and prosecution since its inception in 2008, having attended pre-trial hearings in 2011 and having witnessed the entire 2012 trial, I offer the following seven takeaways on what happened, why, and what’s coming:


    The government’s case can only get worse.  The trial that just ended represented prosecutors’ best opportunity to obtain a conviction.  The U.S. Department of Justice’s failure to prevail on a single count had nothing to do with the quality of the lawyers involved.  David V. Harbach, from DoJ’s Public Integrity Section in Washington, D.C., and Robert J. Higdon, with the U.S. Attorney’s office in Raleigh, N.C., both did a masterful job.  

     

    • Full trial coverage on msnbc.com
    • Full transcripts of closing arguments (.pdf)
    • Analysis by Hampton Dellinger

    Hampton Dellinger

    Hampton Dellinger, a litigation partner with Robinson Bradshaw & Hinson of Charlotte and Chapel Hill, N.C., is former deputy attorney general of North Carolina and has taught election law at Duke University Law School. In 2008, he sought the Democratic nomination for lieutenant governor of North Carolina.


    Harbach and Higdon knew the law and the facts.  They were prepared and skilled in their direct and cross examinations.  Their closing arguments were powerful, indeed eloquent.  They clearly earned the respect of presiding U.S. District Court Judge Catherine Eagles and virtually every important evidentiary ruling went in their favor.  And yet they still came up short.  Moreover, it is likely the government’s key witness -- former Edwards aide turned Edwards accuser Andrew Young -- would do even worse in a second trial where he could be cross-examined not only about statements in his sex scandal tell-all, “The Politician,” but also his days of first trial testimony.  

    Even if prosecutors could obtain a conviction, would it survive on appeal?  What was easily overlooked in the daily theatrics of the trial -- and even without Edwards or his mistress, Rielle Hunter, taking the stand, there was courtroom drama by the barrelful – was how vulnerable any conviction of Edwards would be to reversal on appeal.  

    The U.S. Court of Appeals for the Fourth Circuit, and then likely the U.S. Supreme Court, could question whether there was sufficient evidence of Edwards’s criminal intent in a case where the government had to prove beyond a reasonable doubt a “knowing and willful” violation of FECA.  Plus, the correctness of the trial judge’s ruling that “the government does not have to prove that the sole or only purpose of the money [to cover up the affair] was to influence the election” would be scrutinized on review. 

    TODAY: Rielle Hunter writes tell-all book

    And, as the Citizens United decision epitomizes, federal judges and justices are now extremely skeptical of campaign-related spending restraints in the absence of actual or likely political corruption. The lack of any evidence of a quid pro quo in the Edwards’s case, would have brought the First Amendment implications of the prosecution into the foreground on appeal, along with a host of other credible grounds for a conviction reversal. 

    John Edwards may be many bad things, but he’s no Rod Blagojevich.   Disconcertingly youthful hair aside, comparing Edwards to the former Illinois governor now in federal prison after being retried on political corruption charges in 2011 isn’t fair.  First, Blagojevich’s initial trial resulted in a conviction on one count.  Edwards of course was just acquitted on the sole count where the jury reached unanimity.  

    After more than four weeks of testimony and nine days of deliberations, jurors in the John Edwards trial were able to reach consensus on only one of six counts, finding him not guilty of receiving campaign contributions from a wealthy heiress. NBC's Lisa Myers reports.

    More important, Blagojevich was accused of engaging in classic quid pro quo political corruption – essentially offering an incredibly valuable official act (appointment to a U.S. Senate seat) in exchange for support for his re-election campaign.  As noted above, In Edwards’s case there was no allegation – none – of a quid pro quo.  One of the affair cover-up funders was Rachel “Bunny” Mellon.  A near centenarian at the time of her payments to Andrew Young and his wife, Cheri, (only a fraction of were passed along to Hunter), her ambassador appointment days were surely over. The other funder,  Fred Baron, had no designs on Attorney General or other high office as far as we know. Neither sought an earmark or any other official act.  

    This would have been a very different case if it wasn’t the first of its kind.   Having assisted with political corruption investigations and efforts to uphold campaign finance restrictions during my years in the North Carolina Attorney General’s office, I naturally side with “clean campaign” types, some (but not all) of whom supported the Edwards prosecution.  But what supporters of the government’s case generally failed to acknowledge was the lack of any clear legal precedents in favor of indicting and trying Edwards, something I pointed out months ago. 

    Full trial coverage from NBC News and msnbc.com

    Slideshow: Edwards' public life

    /

    Former Democratic presidential candidate John Edwards has faced public and private challenges throughout his life and career.

    Launch slideshow

    Politicians – even deeply flawed ones like John Edwards – deserve to know what the rules are before they are indicted for breaking them.  As one critic of the case told me recently: it’s one thing to ask jurors to throw the book at a defendant, it’s another to ask them to write it first. 

    Left hand (DoJ) meet right (FEC).  While the prosecution was above reproach in terms of courtroom conduct, the absence of a finding by the Federal Election Commission of even a civil violation related to Edwards’ conduct was striking.  As discussed in a prior post, DoJ’s typical practice has been to only bring criminal charges in situations where the FEC saw wrongdoing at some level; before a criminal case is brought, “There must be no doubt that the commission considers that the underlying conduct presents a FECA offense,” the Department wrote in 2009. 

    The Edwards jury got a glimpse into the FEC’s satisfaction with the Edwards campaign filings, and even that small view may well have been decisive.  While the FEC is a very different agency than DoJ, the less aligned the two are on campaign finance probes the more likely Edwards-like trial losses will continue to occur. 

    Making an oft- maligned profession look good, part 1.   Lawyers are often derided, but it wasn’t only the prosecutors who acquitted the profession well. The defense team – D.C.-based Abbe Lowell, aided by North Carolinians Allison Van Laningham and Alan Duncan -- was similarly stellar.  Maybe even more important than the skillful advocacy was the degree of civility and professionalism displayed by attorneys on both sides, both to their co-counsel and to their adversaries. The stakes in this case were sky high for the defense and the prosecution: Edwards’ liberty on one side, the ability of the DoJ’s Public Integrity section to obtain a conviction in a high profile trial on the other. And yet the battling advocates were almost unfailingly courteous and respectful to each other. It’s the kind of courtroom decorum lawyers should exhibit every time but too often don’t. 

    Making an oft-maligned profession look good, part 2.   Another frequently poked-fun-at group -- the mainstream media – also acquitted itself well at the Edwards trial, save for one unfortunate allegation (“the flirting juror”), which was later retracted.  I was particularly struck by an effort to ensure an accurate record of the proceedings that began almost immediately.  Despite all the competitive pressures to be the first media member to race out of the courtroom and proclaim the latest trial twist, reporters and producers (print, radio and TV) would immediately circle up at each break and compare notes with each other, all in effort to ensure that witness’ testimony, lawyers’ arguments, and the judge’s rulings were reported as close to verbatim and 100 percent correct as possible.  Because the trial was not televised, it was only the assembled press that could provide a picture of what transpired. The picture of media competitors collaborating to make sure everyone got the story right is one I’ll never forget. 

    I’m a lawyer first but I enjoyed assisting with the reporting and analyzing of the Edwards trial.  It was an honor to assist NBC, MSNBC and of course msnbc.com with coverage of the case.   Above all, thanks to you the reader for taking the time to consider my take.

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    95 comments

    Yet another massive waste of taxpayer money. Those Republicans are sure good at spending my money! Poorly!

    Show more
    Explore related topics: campaign, trial, edwards, john, analysis, finance, hampton-dellinger
  • 10
    May
    2012
    1:31pm, EDT

    Prosecution rests in Edwards trial; defense to seek dismissal

    Ted Richardson / Reuters

    John Edwards exits the federal courthouse with one of his defense lawyers, Abbe Lowell, right, in Greensboro, N.C. on Friday.

    By NBC News and msnbc.com news services

    Prosecutors rested their case against John Edwards on Thursday without calling his mistress, Rielle Hunter, to testify. Instead, some of the former Democratic presidential candidate’s closest friends and advisers gave dramatic, often unflattering testimony about his actions as his once-promising political career collapsed amid a sex scandal.

    Edwards' defense team will ask U.S. District Court Judge Catherine C. Eagles on Friday to dismiss the case, arguing that prosecutors haven't proven their case. If the judge allows the trial to go forward, the defense will begin presenting its side Monday — and may call Hunter to testify. Edwards could also take the stand in his own defense.

    It is unclear whether the defense intends to call the 48-year-old Hunter, who has not attended the proceedings, to testify.


    Prosecutors rested their case against John Edwards on Thursday without calling his mistress, Rielle Hunter, to testify. NBC's Lisa Myers reports.

    • Full trial coverage on msnbc.com
    • Analysis by Hampton Dellinger

    In a court order issued March 21, Judge Catherine Eagles wrote: "The defense contends, without contradiction by the Government, that Ms. Hunter's statements have been consistent over time and that she has not said nor is she likely to say that Mr. Edwards admitted or committed any element of the charged offenses. The defense is of the view that her testimony will support inferences in favor of Mr. Edwards and will in fact generally be consistent with the defense theory of the case." 

    According to court documents, Hunter has been granted immunity from prosecution in connection with the case.

    Elizabeth Edwards was in the spotlight on Wednesday at the corruption trial of former presidential candidate John Edwards. In wrenching testimony, a witness talked about her  final days, saying Edwards was consumed by her husband's betrayal. NBC's Lisa Myers reports.

     

    Edwards has pleaded not guilty to six counts related to campaign finance violations. Prosecutors say he spearheaded a scheme to use nearly $1 million in secret payments from Fred Baron, his campaign finance manager, and 101-year-old heiress Rachel "Bunny" Mellon to hide his affair and keep his presidential campaign viable.

    Edwards denies knowing about the secret payments, which his lawyers contend were gifts from friends rather than campaign contributions. He faces up to 30 years in prison if convicted.

    While the past 14 days of testimony has focused on the money trail, the trial has also revisited Edwards' breathtaking fall. He had an affair with Rielle Hunter, a videographer on his campaign, as he renewed his marriage vows to his cancer-stricken wife, Elizabeth. He fathered a child with Hunter and then a decision was made for his right-hand man to claim paternity so Edwards could keep up his lofty political ambitions. And he lied repeatedly to his wife, his advisers and the public.

    As prosecutors wrapped up their case, they showed the jury records detailing the money spent to hide Hunter — $319,500 in cash, luxury hotels, private jets and a $20,000-a-month rental mansion in Santa Barbara, Calif. The bills, flashed up on a large screen for the jury to see, were all paid by Baron, a wealthy Texas lawyer who served as Edwards' 2008 campaign finance chairman.

    Baron began paying the expenses after tabloid reporters tracked down the pregnant mistress in Chapel Hill, where she had been secretly living in a house rented for her only a few miles from the Edwards family estate. Hunter was being closely watched over by Edwards' once-close confidant, Andrew Young, who falsely claimed paternity of boss' baby as the tabloid prepared to expose the affair.

    As part of the cover-up, Baron paid for Hunter — and Young and his wife — to cross the country on private flights worth more than $80,000 and stay in waterfront hotel suites costing nearly $44,000, including bar tabs and frequent room service. Baron also leased a mansion in Santa Barbara for the mistress as she prepared to give birth, with total costs over the next eight months totaling $184,378.

    Several witnesses testified that Edwards knew what the money was spent on; others were less definitive.

    Earlier Thursday, a former unpaid economic adviser to Edwards testified that the candidate actively courted his Democratic rivals in an effort to be tapped as the eventual nominee’s running mate, even as his own campaign was collapsing.

    The adviser, Leo Hindery, said he was an intermediary between Edwards and former Sen. Tom Daschle, who was then with Obama's campaign. On the night of Jan. 4, 2008, after Obama won the Iowa caucuses, Edwards asked Hindery to talk to Obama's camp.

    "Edwards believed it was important that Mrs. Clinton not be the nominee,” Hindery testified. “He thought it would be a disaster."

    Hindery said he reached out to the Obama campaign, via Daschle, and said, "Mr. Edwards for his support would like to be part of (the administration) and be attorney general." Daschle was skeptical and questioned "whether this is appropriate," he said.

    Hindery also testified Edwards thought if he became attorney general that might eventually evolve into a nomination for the Supreme Court.

    The jockeying didn't end there. When Obama didn't accept Edwards with open arms, he started talking to Clinton's campaign, Hindery said. 

    Earlier in the campaign corruption trial, adviser Tim Toben said he was astonished when Edwards told him in June 2008 he still had a desire to become Obama's running mate or fill his Cabinet.

    "I was alarmed," Toben testified. "I couldn't believe a man with a 4-month-old baby with another woman would seriously consider running for vice president."

    The advisers' testimony is key because prosecutors are trying to show jurors that Edwards still had political aspirations after his campaign was suspended in January 2008.

    Lisa Myers, Michael Austin and Stacey Klein of NBC News and the Associated Press contributed to this report.

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    30 comments

    This guy is a total slug, period.

    Show more
    Explore related topics: campaign, trial, money, finance, law, john-edwards, rielle-hunter-featured

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