WHERE WERE THE POLICE? PART II

"'An economic 9/11,' warned Terry Connelly, dean of Golden Gate University's Ageno School of Business, of the potential fallout. As the ]bailout] package went down, panicked investors caused the Dow Jones industrials to nosedive nearly 780 points in their largest one-day point drop ever." Deseret News, 9/30/08 (Photo by Robert Caplin for the Wall Street Journal.)

As the Pillars of American Financial Empire begin to crumble, politicians promise salvation but end up in childish bickering and finger pointing which sends Wall Street plunging and Main Street panicking about the future. Everyone blames the greed and excess of corporate America; and people rightfully begin to ask: “How was this allowed to happen?” Historically, in times of crisis, when crime runs rampant and order turns to chaos, the most often asked question is “Where were the police?”

So where were the police, the regulators, and the prosecutors in the days, weeks and even years leading up to this catastrophe? The answer is: doing our jobs.

Years before most of America learned of the predatory lending practices of some national mortgage companies specializing in high-risk, “sub-prime” loans, I, and most other attorneys general, sued the largest of such companies for fraudulent and deceptive trade practices, and obtaining close to a billion dollars in fines from mortgage giants Household Finance Corporation, Household Realty Corp., Beneficial Finance Corp. and Ameriquest Mortgage! In announcing our settlement agreement with Ameriquest I said, "In the face of serious and widespread allegations of unfair and deceptive practices, Ameriquest has agreed to take important steps to protect future borrowers. It's also important that Ameriquest is paying a substantial amount of money to help provide restitution to past customers." For more information about these actions, click on these links:

http://www.attorneygeneral.utah.gov/638.html

http://www.attorneygeneral.utah.gov/263.html

http://www.attorneygeneral.utah.gov/332.html

Unfortunately, other companies failed to learn from the mistakes and misdeeds of these companies, and did not make the changes we imposed on them and ultimately it led to the collapse of the entire sub-prime market and the resulting mortgage crisis . That in turn fueled this larger financial crisis because of the concomitant losses to Wall Street firms dealing heavily in mortgage backed securities and the insurance companies that insured them. Obviously more can, and must be done!

White-collar crimes, which include fraud, bankruptcy fraud, bribery, insider trading, embezzlement, computer crime, medical crime, public corruption, identity theft, environmental crime, pension fund crime, RICO crimes, consumer fraud, occupational crime, securities fraud, financial fraud, and forgery, cost the United States more than $300 billion annually.

In an article in The Christian Science Monitor, staff writer Alexandra Marks reported that federal prosecutions for US white-collar crime dropped some 28 percent, as homeland security cases rose in priority. Quoting J. Boyd Page, senior partner at Page Perry LLC in Atlanta, she wrote, "people can steal a much greater amount of money with a pen than they can with a gun... If we don't take a stand to say, 'Look, this is wrong' ... then we turn our head, and it results in a lot of people thinking it's OK."

She reported that "according to the Justice Department's Office of the Inspector General, the FBI had 2,385 agents engaged in fighting financial crimes in 2000. By 2004, that number had dropped to 1,882." Notwithstanding the cuts, the FBI and DOJ were successful in prosecuting some of the biggest corporate criminals including Lay, Skillings, Kozlowski, Ebbers and the Rigas boys.

Ms. Marks accurately pointed out that "white-collar crime experts don't fault the Justice Department for lack of zeal in its work, but do worry about the shrinking resources devoted to keeping corporate America on its ethical toes." Knowing this, state attorneys general have stepped up their individual and collaborative investigations and prosecutions. In addition to the successful actions against predatory lenders, AGs have successfully prosecuted securities firms, energy companies, telecommunications giants and even AIG last year.

In Utah we continue our efforts to aggressively attack mortgage fraud on a local basis. Last February, the state legislature gave us a tough new law specifically called "Mortgage Fraud" and appropriated some money to start the creation of an in-house unit of investigators, analysts and prosecutors. In May of 2007, we formed a multi-jurisdictional task force with the U.S. Attorneys office in Utah, the Utah Division of Real Estate and local agencies, and have in the past year put a number of fraudsters behind bars.

For example, just last week I announced that the former president of Cobalt Homes, Brian K. Brady, 55, of Sandy [left] has started serving a 90 day jail sentence for defrauding homeowners and subcontractors. More importantly to his victims, he will pay more than $300,000 in restitution and serve six years on probation to ensure those payments are made. Earlier this year, we charged Val E. Southwick, [right] the founder and president of VesCor Capital, with nine second-degree felony counts of securities fraud for his involvement in a commercial real estate investment scheme where we alleged he bilked 817 investors out of an estimated $140 million.

These are uncertain times and those who defraud homeowners and lure Utahns into shady investment schemes, need to know with a certainty that the State of Utah will seek justice!

This Thursday and Friday, my office will be hosting our annual Utah Attorney General's White Collar Crime Conference where hundreds of investigators, analysts and prosecutors will gather once again to be educated into the latest scams and schemes and to further develop collaborative relationships to combat all manner of white collar crime in Utah.

As the economic crisis deepens and politicians debate rescue policies, the police will continue to do everything within our power to protect and serve, and to uphold the rule of law so that our dynamic and powerful democratic free market system can survive and once again flourish.

WHERE WERE THE POLICE? PART I

"Worst Crisis Since '30s, With No End Yet in Sight" - The Wall Street Journal

As the Pillars of the American Financial Empire crumble, politicians promise salvation but end up in childish bickering and finger pointing which sends Wall Street plunging and Main Street panicking about the future. Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, N.J., told Reuters today, "There's a monster amount of fear out there. This is global contagion." Henry Herrmann, CEO of mutual fund company Waddell & Reed, told Bloomberg News that if Congress doesn't come up with a plan, and soon, “the damage is unimaginable!"

Everyone, including the two men battling for President, blames the greed and excess of corporate America; and people rightfully begin to ask: “How was this allowed to happen?” Historically, in times of crisis, when crime runs rampant and order turns to chaos, the most often asked question is: “Where were the police?” It's a good question. One which I will try to answer in the next few blogs.

PART I

I was litigating cases in Southern California at the time of 1992 riots after the Rodney King verdict, and as much of South Central L.A. burned, and people died, the cry went out again, “where are the police?”

As Jews around the world celebrate Rosh Hashanah, I am reminded of a law enforcement course I took at the Holocaust Museum in Washington D.C. entitled “Where Were the Police? Lessons Learned from the Holocaust.”

While we go about trying to find a solution to the current crisis and ensure it doesn't happen again, it behooves us to ask what happened, and what role did law breakers have in it? The next obvious question then is, "where were the law enforcement and regulatory agencies as bad actors were quietly but devastatingly undermining America's financial pillars?"

As the Chief Law Enforcement Official in the State of Utah, I can tell you that when it comes to enforcing financial laws from antitrust to mortgage fraud and all manner of corporate white collar crime, My AG colleagues around the country and I(of course, guided and supported by our very capable staff attorneys and investigators) have been on the job, suing CEOs of major corporations, Wall Street big wigs and sub prime mortgage giants, and prosecuting financial crimes by Fortune 500 companies.

I have lectured around the country to corporate executives and their in-house lawyers on the power and authority of state attorneys general in policing corporate greed and excess. My lecture is consistent and forthright. I believe strongly in the greatness of a free market economy which best protects the consumers of America by igniting competition, encouraging innovation and ensuring the development of products and services which better our lives at prices we can best afford. In a 2004 satirical piece called “In Defense of Excess,” Times columnist Michael Kinsley, explained it this way:

“The magic of capitalism, as explained by Adam Smith and his followers, is that it channels individual greed into activities that benefit all of us.”Greed is good," declared Michael Douglas, playing a corrupt financier in the movie Wall Street. More accurately, greed is inevitable. It is part of the human condition. And in moderation, economists argue and history demonstrates, greed is no bad thing. Free-market economies could not function if we were all Mother Teresa.”

But I have also consistently warned that where the human capacity for greed is left unchecked, unfortunately, there are those who will cheat and lie and steal and circumvent the rules and break the law and that is where the Rule of Law and Law Enforcers like myself must, and will, step in to protect consumers and hold law breakers accountable; thereby leveling the playing field for those in the majority who obey the rules and are often put at a competitive disadvantage by the “greedheads” and crooks like Ken Lay and Jeffrey Skilling of Enron, Dennis Kozlowski of Tyco, Bernie Ebbers and Scott Sullivan of WorldCom and John and Timothy Rigas, the father and son who bankrupted Adelphia Communications.

In August of 2002, The Wall Street Journal recognized me as one of six "tough guy" attorneys general who were “gaining clout and influence beyond state borders.” The article concluded that the six "united crime busters" are helping shape national policies by winning cases and "chasing bad guys."

Stay tuned for Part II...

"As the Twig is Bent, the Tree's Inclined"

As my kids recently returned to school, I was once again reminded how much I respect and appreciate those who have chosen the profession of teaching. It's something I grew up with. Both of my parents are retired educators. I am so proud of my father, James Leonard Shurtleff, chemist by trade - educator by profession. After years of teaching chemistry at Jordan, Hillcrest and Brighton High (where he was, "horror-of-horrors," my Sophomore Chemistry teacher,) he spent the rest of his career as an administrator at Brighton and Bingham High School and Midvale and Mt. Jordan Middle Schools. My mother, Sandra Shurtleff, retired after thirty years as mostly a First-Grade Teacher at various schools in the Jordan School District, finishing at Granite Elementary. I say, as did Abraham Lincoln of his mother, that "all I am or hope to be, I owe to my angel mother."

We send our children off every morning to spend seven or so hours with one or more adults who will (hopefully) shape their minds, motivate their talents, inspire curiosity, and awaken them to the world around them and their role in it. Some day I'll post my feelings for my Sixth Grade teacher, Naomi Brems (formerly of Cottonwood Heights but now of Boulder, Utah) who had a powerful and lasting impact on my life. I once gave my father a little wooden block for his desk with a brass plate that bore a quote from Alexander Pope: "'Tis education that forms the common mind. As the twig is bent, the tree's inclined."

Perhaps that's why I have spent a higher percentage of my time as attorney general in our schools directly educating Utah children than any other single pursuit: Internet safety tour; club drug "Reality Check" tour; introduction of the Netsmartz Internet safety training, assemblies on youth suicide prevention, bullying, the dangers of alcohol use and abuse, and steroid dangers; "substitute teaching" numerous classes; personally mentoring fifth graders at Washington Elementary; and instructing teachers, administrators, and PTA members on school safety, civics and bullying prevention. In addition, I have aggressively secured the funding for our children’s education, twice standing firm in prohibiting top federal and state officials from taking actions that would have resulted in the loss of millions of dollars in school trust land revenues held in trust for Utah's school children.

I have received hundreds of letters from principals of high schools, junior highs and elementary schools from around the state thanking me for my efforts and securing critical trust funds. In my replies to them, I often include my favorite prose on the subject of education. It is a little long, but I hope you'll read it here, then go to your next Parent-Teacher Conference or Back-to School-Night and thank your kids' teachers for helping them grow straight and tall into mighty oaks:

THE PROMISED LAND

In America, then, everything was free, as we had heard in Russia. Light was free; the streets were as bright as a synagogue on a holy day. Music was free… Education was free. That subject my father had written about repeatedly, as comprising his chief hope for us children, the essence of American opportunity, the treasure that no thief could touch, not even misfortune or poverty.

Father himself conducted us to school. He would not have delegated that mission to the President of the United States. He had awaited the day with impatience equal to mine, and the visions he saw as he hurried us over the sun-flecked pavements transcended all my dreams.

So it was with a heart full of longing and hope that my father led us to school on that first day. He took long strides in his eagerness, the rest of us running and hopping to keep up.

At last the four of us stood around the teacher's desk; and my father, in his impossible English, gave us over in her charge, with some broken word of his hopes for us that his swelling heart could no longer contain. I venture to say that Miss Nixon was struck by something uncommon in the group we made, something outside of Semitic features and the abashed manner of the alien.

All three children carried themselves rather better than the common run of "green" pupils that were brought to Miss Nixon. But the figure that challenged attention to the group was the tall, straight father, with his earnest face and fine forehead, nervous hands eloquent in gesture, and a voice full of feeling. This foreigner, who brought his children to school as if it were an act of consecration, who regarded the teacher of the primer class with reverence, who spoke of visions, like a man inspired, in a common schoolroom, was not like other aliens, who brought their children in dull obedience to the law; was not like the native fathers, who brought their unmanageable boys, glad to be relieved of their care. I think Miss Nixon guessed what my father's best English could not convey. I think she divined that by the simple act of delivering our school certificates to her he took possession of America."

Chapter IX." by Mary Antin (1881-1949)From: The Promised Land by Mary Antin. Boston & New York: Houghton Mifflin Company, 1912.

"Good Name in Man and Woman, Dear my Lord"

Amid all the problems and troubles that we deal with on a daily basis, identity theft continues to be one of the most feared nightmares that a person could face. William Shakespeare understood this when he wrote:

"Good name in man and woman, dear my lord,

Is the immediate jewel of their souls:

Who steals my purse steals trash; 'tis something, nothing;

"Twas mine, 'tis his, and has been slave to thousands;

But he that filches from me my good name

Robs me of that which not enriches him And makes me poor indeed."
- Othello, Act 3 scene 3

Identity theft has been the fastest growing crime in the world with tens of billions of dollars stolen every year. But what makes identity theft even more pernicious is that it destroys a persons credit and "good name" which is very expensive and difficult to restore. It is especially harmful to our seniors who have worked hard their entire lives to make good their name and credit and now find themselves special targets of identity thieves. As technology has progressed, identity theft has become more sophisticated and in many ways it has made it much less complicated for the scammer to find and take what he wants. Our office has been at the forefront of using technology to protect the public. Our I.R.I.S. website and database has won national awards, and we continue to look for other ways to help people protect themselves.

Wednesday we held a press conference to announce that a new state law is now in effect that allows anyone to freeze their credit and protect their credit ratings. It also allows you to thaw the freeze in just 15 minutes to make purchases. I'm proud that Utah stuck to its guns with the credit bureaus who wanted to make consumers wait three days like they do in all other states with credit freeze laws. State Senator Carlene Walker is primarily responsible for this bold and powerful new proactive tool for Utahns to protect themselves. In our office, Assistant Attorney General Rich Hamp and Chief Deputy Kirk Torgensen worked tirelessly to make it happen.



My grandmother used to tell me "Mark, protect your good name. It is more valuable than diamonds and rubies." She was right. Now we can at least protect our good credit by freezing our credit reports so identity thieves can't finance their sorry lives on our good name and credit.

Let this ice sculpture of Lady Justice be a symbol to ID thieves that Utah's new Credit Freeze Law will stop them COLD!





For more information on Utah's new credit freeze law and contact information for the credit bureaus, please go to our IRIS website: http://www.idtheft.utah.gov/.

Here are some clips of the press conference:

You can also read news stories at:

http://www.deseretnews.com/article/1,5143,700257994,00.html

http://www.sltrib.com/ci_10435935?IADID=Search-www.sltrib.com-www.sltrib.com

ALL GIVE SOME, SOME GIVE ALL

Every day a police officer kisses his or her spouse and children goodbye and goes out to face danger to protect us and our children – not knowing if they will ever see their loved ones again. In Utah, 126 officers did not return. The greatest honor I have had as Utah’s Attorney General is to get to know and work with the extraordinary men and women in law enforcement. Today, Governor Huntsman paid me a tribute that moved me deeply. He said, “Attorney General Shurtleff loves the men and women in law enforcement!”

The Governor spoke today at the dedication of the beautiful new Utah Law Enforcement Memorial on Capitol Hill. Thousands turned out to honor the 126 police officers who gave the ultimate sacrifice in their commitment to protect and to serve the people of Utah.
In my first 28 months in office, I attended the funerals of seven police officers killed in the line of duty. From the June 6, 2001 murder of Roosevelt Police Chief Cecil Gurr, who was shot to death when he and other officers responded to a report of a man with a gun and a hostage, to the May 27, 2003 death of young Emery County Sheriff Deputy Jeremiah Johnson who was killed when his car collided head-on with a coal truck as he rounded a corner while on patrol, I mourned with their families and friends and learned of the extraordinary men who gave their all, and of their amazing families who gave their daddies, husbands and sons to us - and now must go on without them.

I was honored to be a member of the selection committee that picked the artist and statues that would mark the site with larger than life depictions of officers doing their duty. My favorite is the depiction of the first Utah officer killed in the line of duty, Rodney Badger, who drowned after saving a mother and four children from the Weber River. The statue depicts the sodden deputy with a child in his arms. I was also honored to sponsor, with my family, a bronze plaque for Frisco Police Officer Daniel Mahoney who in 1883, while conducting his evening rounds, encountered three intoxicated individuals causing a disturbance. When he ordered them off the street, one of the men drew a pistol and shot him in the stomach. My kids love exploring Frisco Ghost Town in Beaver County, and when we learned no family could be found to sponsor the plaque, we did so.

This memorial is a place where families can feel proud of the sacrifice of their loved one as they gaze upon the inspiring statues, and feel comfort and inspiration as they touch a bronze plaque on the granite wall. But it is also a monument for all Utahns to pay tribute to those who gave their all, and hopefully a visit there will move them to perhaps slow down a little, look out for their neighbors, teach their kids to obey the law, and even, when they have the “unpleasant” experience of being stopped by a cop, they will respond with respect and perhaps even thank that officer for risking his or her life to protect them.

For more information about the memorial and biographies of the 126 officers killed in the line of duty, or to make a donation to the endowment please go to http://www.utahsfallen.org/

Click on the links below to view news stories of the dedication ceremony.

http://www.kutv.com/content/news/local/story.aspx?content_id=afe5ec73-0cba-4f4f-b356-bf755e3c3967

http://www.ksl.com/?nid=148&sid=4197439

http://www.myfoxutah.com/myfox/pages/Home/Detail?contentId=7375476&version=7&locale=EN-US&layoutCode=VSTY&pageId=1.1.1

http://www.abc4.com/news/local/story.aspx?content_id=8ec16a43-3c88-4722-9b5f-ad47e2a922a6

"Deriving their Just Powers from the Consent of the Governed"

In politics it doesn't get any bigger than this: Picking a President! The leader to whom we, the people, will give our consent and the power to govern America for the next four years. We have just finished back to back conventions of the two major political parties, out of one of which we will have a new President and Vice President. In just two months, the American people will go to the polls and give their consent to the ticket they most believe will take our beloved country in the direction they most want. History is in the making! This year we will elect either the first African-American president or the first female vice-president, either of which will be an historic milestone for a country that was founded on the principle of equality.

It is my hope and my prayer that Utahns will catch the spirit, enthusiasm, patriotism and yes, even partisan zeal that we witnessed at both conventions, and keep it alive during the next two months of electioneering, debate and dialogue, and turn out in record numbers on November 4th to make their choice. There is a clear choice here. There is no doubt on where the two tickets stand on the issues. Both talk of "change" and polls show most Americans want change. Both major parties' candidates have stated their platforms, and through the next two months will more fully articulate policy specifics on how they will effect that change. It is our job as citizens of this great democracy to become educated on the issues and the candidates and then step into the voting booth to cast our vote and lend our voice to the symphony of the United States of America's greatest blessing: "Government of the people, by the people and for the people!"

In making that choice, I urge the people of Utah and the nation to consider the immortal words of President Calvin Coolidge in declaring that the people have the faith to remember that this nation was built "upon a righteousness which will endure, a reconstructed faith that the final approval of the people is given not to demagogues, slavishly pandering to their selfishness, merchandising with the clamor of the hour, but to statesmen, ministering to their welfare, representing their deep, silent, abiding convictions.”

America is at a crossroads in history with issues that effect each and every one of us, our families, our children, issues such as the War on Terror, the economy, energy independence, conservation and morality. We can, we must, get involved and make an informed choice and turn out in record numbers on election day to give our consent to those who will represent us in addressing these issues. The Choice is Yours:

Generally Speaking Blogcast 001

LESSONS LEARNED

I've always been a bit of a plodder, so it was with some satisfaction that I came across a quote by Abraham Lincoln as I contemplated the gathering this week of the Party of Lincoln in Minnesota: "I am a slow walker, but I never walk backwards." He certainly was an example of persistence and perseverance in the face of hardships.

Sitting with my leg elevated above my heart, I have had time to reflect on my ordeal. Like anyone would, I've asked myself "why me?" and held several "pity parties." But I've also asked "why not me?" Of late, I've meditated on what I am learning from these experience so I can move forward, and not backwards. Three major lessons come to mind and I write them here for my own understanding and perhaps to help another:

1. Be Humble - I am grateful for a wife who, throughout my career in the public sector, has gently and timely reminded me that at the end of the day, I'm really not "all that," and I need to "keep it real!" Sometimes power and authority can be a giddy thing. We've been let down too many times by those who have proven the maxim that "power corrupts." Trappist Monk Thomas Merton taught that “pride makes us artificial and humility makes us real.” Sometimes, we are compelled to be humble. To me, humility is a recognition that no matter our physical prowess (or what we aging men believe our prowess to be,) our education, profession, status, authority or power, we are all, in the final summation, equally subject to infirmities of the flesh. If we are to live and succeed in our time on this earth, we must recognize that we owe, first and foremost who and what we are to God; and second to those with whom we associate in this life: our families, friends, neighbors, co-workers, and fellow citizens. In humility, I am firmly aware that my elected position means one thing: to serve the people of this great state by securing their rights, opportunities and privileges, and protecting them, their families and their children.

2. Be Patient – Despite rigorous preparation and planning, we unfortunately do not always control our course or even our abilities; so that when we are afflicted, we must trust in God, the marvels of modern medicine, and the love, support and prayers of others. Next we need to get up each day, put one foot in front of the [Ilizarov fixator rings], and do as much as we are able given our physical or other limitations. We must be patient in suffering and setbacks, and in the words of Winston Churchill, "Never give in. Never, never, never, never--in nothing, great or small, large or petty--never give in."

3. Be Empathetic - I took for granted my good health and relative athletic ability to play a lot of sports. Those activities took a toll on my joints and bones resulting in twelve surgeries including an artificial knee at the age of 42. But I always healed well and quickly. This time it has been different; and after eleven months spent in hospital beds and wheelchairs, with walkers, crutches and canes, and utilizing shower chairs, toilet risers and grab bars, I have learned a profound empathy and appreciation for those whose disabilities are permanent, and who will every day, and always, face obstacles but who nonetheless approach each day with humility, faith and courage and make an amazing difference in the lives of others. I will try to be more like them, even when - especially when - my health returns.

One of the most amazing and heroic Utahns I’ve met through all this is Sharon Ross in Brigham City who has never been out of a wheelchair (and her saint of a husband, Weston, who has lovingly cared for her every need for decades;) but they have together, and individually, accomplished amazing feats of family, work, art and charity.

More recently a humble, patient and empathetic David Watson posted a comment on my blog: "I pray for your full recovery. I was not so lucky. I was involved in a freeway rollover accident in January and lost my left leg. After 5 months in the Hospital and rehab, I'm doing fine. If you every need someone to talk to, I would be glad to talk." I called but he is taking his youngest son to BYU-Idaho. I can't wait to talk with him. If you want to be inspired, go to his blog: http://davidewatson.blogspot.com

I love to think on the Meditations of Marcus Aurelius. Consider this:

"Think on this doctrine,--that reasoning beings were created for one another's sake; that to be patient is a branch of justice, and that men sin without intending it."