Wednesday, December 2, 2009
The Death Penalty Revisited-Again
If it were an art to overcome heresy with fire, the executioners would be the most learned doctors on earth.
— Martin Luther, To the Christian Nobility of the German States
Some innocent dead men walking can now take hope. Two cases have been decided in the last four months that suggest that in the United States, at last, it may actually make a difference whether or not the prospective visitor to the death chamber is guilty or innocent. A New York case decided in November may give some guidance to other courts considering the question, if not to the Clarence Thomas-Antonin Scalia duo for whom innocence is less important than finality. The two friends most recently expressed themselves in the case of Troy Anthony Davis.
Troy was convicted by a jury of murdering an off-duty police officer in Savannah in 1989 and sentenced to death. Following his conviction some of the witnesses against him recanted their testimony and implicated the prosecution’s chief witness. After his state remedies to obtain reversal of his conviction were exhausted, Troy took the unusual step of filing an original writ of habeas corpus in the U.S. Supreme Court hoping to get relief on the grounds that he was in fact innocent as shown by evidence that was unavailable at the time he was convicted. Over the dissent of Messrs. Thomas and Scalia the Justices referred the case to a Federal District Court and ordered it to “receive testimony and make findings of fact” as to whether the proffered evidence establishes Troy’s innocence.
The Scalia-Thomas duo objected to the referral. They wanted finality irrespective of Troy’s guilt or innocence. Ever a stickler for procedural propriety, Justice Scalia observed at the outset of his objection to the Court’s action, that it had been almost 50 years since the Court had favorably acted on a petition like Troy’s. He did not stop there, however. He explained that the Antiterrorism and Effective Death Penalty Act of 1996 imposed limits on the ability of Federal Courts to release Troy because that Act says “An application for a writ of habeas corpus on behalf of a person in custody pursuant to the judgment of a State court shall not be granted with respect to any claim that was adjudicated on the merits in State court proceedings” unless the judgment offended (my words-not the statute’s) federal law in a manner that Justice Scalia believes Troy’s conviction clearly did not. He believes that an “actual-innocence claim” asserted by a “dead man walking” should be treated no differently from any other claim that asserts a conviction was wrongfully obtained because of, for example, a minor procedural error. To prove he is not some nut off in right field, Justice Scalia observed: “This Court has never held that the Constitution forbids the execution of a convicted defendant who has had a full and fair trial but is later able to convince a habeas court that he is ‘actually’ innocent. Quite to the contrary, we have repeatedly left that question unresolved, while expressing considerable doubt that any claim based on alleged ‘actual innocence’ is constitutionally cognizable.” The results of Troy’s referral to a Federal District court are not yet known. What is known is that people in New York are considerably more concerned with claims of “actual innocence” than the Scalia-Thomases.
In the case of The people of the State of New York against Fernando Bermudez Justice John Cataldo of State Supreme Court in Manhattan said that in considering whether to reverse a conviction he would, among other things, consider whether Mr. Bermudez had “demonstrated his actual innocence by clear and convincing evidence.” Mr. Bermudez spent 18 years in prison for a murder Justice Cataldo concluded he had not committed. In Judge Cataldo’s 73-page opinion he identified several errors committed by the lower court that by themselves, he said, would warrant a new trial. He concluded, however, by saying the defendant has “demonstrated his actual innocence” by clear and convincing evidence and therefore vacated Mr. Bermudez’s conviction.
Commenting on Judge Cataldo’s ruling, New York State Senator Eric Schneiderman said the ruling “dramatizes the need to ensure that actual innocence is established as a legitimate ground for a hearing.” Senator Schneiderman is one of the sponsors of legislation introduced in the New York State Senate known as the “actual innocence justice act of 2009.” It says a motion to vacate a judgment would be appropriate if the defendant is “actually innocent of the crime or crimes of which he or she was convicted.”
As Mr. Bermudez left Sing Sing in November he was quoted in the New York Times as saying: “This is a day for other people to have hope that justice is possible in this country.” If Justice Scalia were asked to comment on Justice Cataldo’s ruling, on the other hand, he would lament the sacrifice of finality on the altar of innocence.
Wednesday, November 25, 2009
The Passenger and the Airline Ticket
Appearances often are deceiving.
— Aesop, The wolf in Sheep’s Clothing
Today we deal with a fascinating tax question, insofar as tax questions can ever be described as fascinating to the average reader. The question we consider is when does an airline’s invention of a new way to extract money from its passengers constitute a really new invention and when is it simply putting old wine in new flasks. The wine in question is the myriad charges airlines have begun imposing on passengers in order to increase revenue. The question is important because airlines pay a 7-½% “Passenger Ticket Tax” on what they charge for tickets, but not on non-ticket related charges that they describe as “fees.”
It started modestly but insidiously, when airlines closed ticket offices outside of airports and shortly thereafter imposed a fee on a ticket purchased over the phone instead of on a computer. Delighted with the revenue thus raised, they conjured up additional fees. The most notorious was imposed on suitcases.It has long been understood that if Ms. Jones wants Mr. Jones to accompany her on a trip, each person purchased a ticket and the airlines understood that the money they received for those tickets was subject to the ticket tax. Then the airlines decided that if they charged Mr. Jones for accompanying Ms. Jones on the trip, they should charge the suitcases that accompanied them. Since the suitcases don’t have a choice of window, middle or aisle seats and have to ride in the lower part of the airplane, the airlines charge suitcases less than they charge people and consider the charge a fee not subject to the ticket tax. If you think about it, that makes sense. The only difference between Mr. Jones and the suitcases is that Mr. Jones gets himself to the airport whereas the suitcase has to be carried. Charging suitcases for their transport was not the end of the airlines’ inventiveness.
The airlines compressed the space between rows of seats and said if a passenger wants room to stretch out his or her legs, the passenger must pay an extra charge and that charge, too, is called a fee rather than part of the ticket price. The apparent reason for treating this charge separately from the ticket price is that even though the airlines’ computers can accommodate a multitude of fare structures on every flight (and have no trouble charging more for first class tickets than for economy class tickets) the computers are unable to come up with a fare structure that would permit them to price tickets for seats that have leg room and seats that do not. Therefore, they call what they charge for seats with legroom “fees”. The same problem confronts the airline computers when pricing tickets for travel during holiday seasons. They can easily adjust prices for travel between high demand and low demand times and, indeed, can easily change ticket prices every second as anyone who has bought a ticket on-line knows. That sophistication notwithstanding, airline computers cannot figure out how to incorporate increased prices for travel during certain holiday seasons into their programs. To solve the problem they added a fee to the price of tickets for travel during Thanksgiving, Christmas and Spring Break.
The beauty of all these fees is that the airline views them as unrelated to the price of the ticket and, therefore, not subject to the 7-½% ticket tax. Most readers by now will be astonished that the airlines can, with straight faces, add all these charges to the cost of flying but say they are unrelated to the price of a ticket and not, therefore, subject to the ticket tax. In their astonishment they are joined by Congressmen James Oberstar of Minnesota and Jerry Costello of Illinois. The congressmen have asked the Government Accountability Office to investigate the practice and intend to hold congressional hearings so airline executives can explain the logic of the illogical. As the New York Times posits the issue it is: “do the fees reflect what it costs the airlines to provide the extra service, or are they just an added charge of services the airlines have always provided?” Mr. Oberstar seems to anticipate the outcome of the hearing suggesting that the airlines have “found a backdoor way to raise ticket prices.”According to the NYT, this year alone the airlines have taken in more than $3 billion in “fees”. If those fees had been treated as part of the ticket price, the government would have received $225 million. Many passengers think the addition of the plethora of fees effectively takes them to the cleaners. The airlines don’t see it that way. John Tague,president of UAL, said, “we have been aggressive and creative” in coming up with new fees. You have to hand it to Mr. Tague. Whatever he may choose to call what you pay for the privilege of riding on his airplanes, at least he’s willing to call a spade a spade when describing the steps taken by his company to increase revenue.
Wednesday, November 11, 2009
Banks and Vaccines
He never wants anything but what’s right and fair; only when you come to settle what’s right and fair, it’s everything that he wants and nothing that you want.
— Thomas Hughes, Tom Brown’s Schooldays
It is typical of the petty that they are inflamed by the news of what they perceive to be the inequitable distribution of the H1N1 swine flu vaccine. The inflammation occurred when it was learned that Goldman Sachs and Citigroup, among others, have been receiving doses of the scarce H1N1 vaccine. According to reports, as of November 2, 2009, Goldman had received 200 units and Citigroup had received 1200 units. The U.S. Centers for Disease Control and Prevention (CDC) says the vaccine must be given to those who are considered to be in the high-risk category of developing serious complications from the swine flu such as pregnant women and children aged 6 months to 24 years. That would not, obviously, include banks that were in mortal danger a year ago not from swine flu but from the consequences of their improvident behavior. Although it is obvious that banks might have within their ranks, individuals falling in the high-risk category, the fact of the delivery to the banks was perceived by some to be evidence of preferential treatment.
Anna Burger, secretary-treasurer of the Service Employees International Union said: “It’s obscene that Wall Street bankers think they are entitled to private shipments of H1N1 vaccinations while health-care workers, pregnant women, and other at-risk Americans are either waiting in line for hours or getting turned away because of shortages. She suggested the recipients should donate the vaccine they have received to local hospitals where it could be distributed to a more worthy population. (It is likely that Ms. Burger may have been motivated in part by the thought that poetic justice would be served if those serving at the banks were to perish from a disease with the name of pig.)
There were, of course, defenders of the distribution. Jessica Scaperotti, press secretary of the New York City Health and Mental Hygiene Department explained that the financial firms were not given preferential treatment. As she explained: “It’s not that they received it over someone else, it’s that they placed an order…This is not out of the ordinary. A lot of businesses hold vaccination programs for their employees. These locations are important vehicles for vaccinating people.” A Goldman Sachs spokesman reminded the critics that: “It is important to understand that the [New York City] Department of Health decides in its sole discretion who receives H1N1 vaccines—both the amount and timing. Goldman Sachs, like other responsible employers, has requested vaccine and will supply it only to employees who qualify based on the requirements laid down by the CDC and Department of Health.” In an e-mailed statement Citigroup offered a similar explanation saying in part: “The H1N1 vaccine is being provided through our clinics only to employees in high-risk categories as defined by the CDC.”
In all the discussion over whether or not the distribution has been fairly effected, one very important fact is not mentioned. The banks fail to mention it out of fear. The critics do not mention it because it would explain why the banks have received the vaccine ahead of others and would, if publicized, mute, if not emasculate, their criticism. The important fact is banks are receiving the vaccine because of their employees’ importance to the financial well being of the country. The banks survived a financial meltdown of gigantic proportions and were, almost to an institution, saved from financial collapse by a governmental bailout. Every day brings new evidence of the banks’ renewed vitality and none is more renewed than Goldman Sachs that not only paid back all the money it received from the taxpayers but is once again restored to profitability. Goldman Sachs announced plans to pay $16.7 billion in bonuses in 2009, the largest bonuses ever paid by that firm and $6.7 billion more than it had received scarcely a year earlier (and repaid) as a bailout package. When answering those who criticize the size of its bonuses, they explain that those bonuses must be paid in order to retain the extremely talented individuals who are responsible for their present successes and (this is mentioned less frequently) their earlier failures. These are people who would bolt if their bonuses were one penny less than the amount to which they believe themselves entitled because of their good work.
It would undeniably be a shame if banks that promised to pay more than $16 billion in bonuses in order to avoid losing their highly talented people to the competition, were to lose them instead to the Lord because of a killer virus named pig. When the critics realize this, I am confident their carping will come to an end and they will, instead, be filled with gratitude for all the banks have done for us.