The LuLac Edition #721, Feb. 12th, 2009

PHOTO INDEX: LACKAWANNA COUNTY COMMISSIONER COREY O'BRIEN AND JUDGE ARTHUR GRIM.

NOT ME! THEM!!!!!!!

When I was a sub in a local school district, I was amused by the 7th graders I attempted to teach. It was funny when trouble broke out because each student pointed the finger at each other. When I was in school you had a code of conduct, right or wrong, which said you never ratted on your class mate. It wasn’t very effective because sooner or later, the truth came out. The recent news that Attorney Robert Powell’s lawyer, is accusing two judges of extortion reminded me of that time in my life. Powell co-owned PA Child Care and Western PA Child Care until June. His attorney, Mark Sheppard, told the Associated Press his client was the victim of an extortion scheme by judges Mark Ciavarella and Michael Conahan. His lawyer is associated with the Richard Sprague Law Firm. Richard Sprague was to me, a respected lawyer until he helped crucify Luzerne County Judge Anne Lokuta. Powell is now pointing the finger at the Judges. Who knows, he might be right. But the fact that no proof has been released on this lends credence to the fact that everyone is fighting to save their skin. This could be the motivating factor in the public letter sent by Judge Ciaverella to President Judge Muroski. But what I know is this, the latest revelation from Powell’s lawyer has done something that was thought impossible just a few days ago: it gives a modicum of sympathy to the two Judges under fire.

BRING ON THE JUDGE!

The Times Leader reports that the Pennsylvania Supreme Court has appointed a senior judge from Berks County to review all cases that were handled in Luzerne County juvenile court system dating back to 2003. The order, among other things, directs Senior Judge Arthur E. Grim to determine whether juveniles who appeared before Judge Mark Ciavarella were denied the right to an attorney, to identify which juveniles were committed to the Pa Child Care and Western Pa Child Care facilites, and to recommend what remedial action should be taken on each case. Here’s an excerpt from a publication Grim contributed to in 2003.
Pennsylvania Juvenile Delinquency Benchbook Harrisburg, PA: Pennsylvania Juvenile Court Judges’ Commission.
The Pennsylvania Juvenile Delinquency Benchbook is intended to serve as a practical tool for working judges throughout this Commonwealth, offering them convenient access to all the information they need to effectuate the underlying purposes of the Juvenile Act: “Consistent with the protection of the public interest, to provide for children committing delinquent acts programs of supervision, care and rehabilitation which provide balanced attention to the protection of the community, the imposition of accountability for offenses committed and the development of competencies to enable children to become responsible and productive members of the community.”

HERE COME THE AUDITORS

The state welfare department audit of the Western PA Child Care detention center found $1.26 million in unallowable expenses. It included a chartered fishing trip, a custom-made suit for former Hazleton Mayor Mike Marsicano which he talked about on Corbett’s show on WILK saying the suit never left the package, a shopping trip to the King of Prussia Mall and limousine service to the NCAA Basketball Tournament. I’m sorry, if I owned a $3500 suit, I’d be sure I’d wear it, sleep in it and die in it! Never mind the packaging.

QUESTION

Last year the hot topic around these parts was reassessment. Remember the angst that went on, the almost open class warfare that nearly divided county residents? That 1.26 million in unallowable and apparently untraceable funds gets me thinking about reassessment. If money was not squandered or misdirected, do you think maybe we wouldn’t need reassessment? Maybe if we spent the money prudently, would we need a revamping of the property tax system? Just wondering.

CLEAN ‘EM OUT

I made some comments on WYOU TV Interactice Tuesday night that caught the ire of some residents. I proposed that the County Commissioners, the Senior Management Team, and the row officers under the tutelage of former Ltn. Governor Mark Singel and former Atty. General Dick Thornbugh do a personnel audit. Shut down the Courthouse (except Emergency Services) for 30 days and get each employee’s resignation. Put them on Unemployment Comp for a month and have them reapply for their jobs. You do this after an audit to see what positions are needed. This would identify areas where more staff is needed and where less staff would go. Private business does this realignment all the time. It is about time that the County ran like a business not some political patronage mom and pop store that is run like Wally’s Filling Station in Mayberry. Well the comments about how stupid the idea are still coming in. Much of it unprintable. But hey, if you have a better idea, let me know.

KANJO YOU TUBE PART 2

Got a response from the Congressman’s office regarding our post yesterday. I was told his comments were not new, but in fact dated back to September of last year. Either way, it was still a revelation on how close we came to a financial meltdown and that we elected a guy who has his hand on the wheel when it comes to bringing up information like this, especially to frustrated voters. From the New York Post, here’s an article from Sept. 2008.

By MICHAEL GRAY
September 21, 2008

The market was 500 trades away from Armageddon on Thursday, traders inside two large custodial banks tell The Post.
Had the Treasury and Fed not quickly stepped into the fray that morning with a quick $105 billion injection of liquidity, the Dow could have collapsed to the 8,300-level - a 22 percent decline! - while the clang of the opening bell was still echoing around the cavernous exchange floor. According to traders, who spoke on the condition of anonymity, money market funds were inundated with $500 billion in sell orders prior to the opening. The total money-market capitalization was roughly $4 trillion that morning. The panicked selling was directly linked to the seizing up of the credit markets - including a $52 billion constriction in commercial paper - and the rumors of additional money market funds "breaking the buck," or dropping below $1 net asset value.The Fed's dramatic $105 billion liquidity injection on Thursday (pre-market) was just enough to keep key institutional accounts from following through on the sell orders and starting a stampede of cash that could have brought large tracts of the US economy to a halt. Whlle many depositors treat money market accounts as fancy savings accounts, they are different. Banks buy a variety of short-term debt, including commercial paper, with the assets. It is an important distinction because banks use the $1.7 trillion commercial-paper market to fund their credit card operations and car finance companies use it to move autos. Without commercial paper, "factories would have to shut down, people would lose their jobs and there would be an effect on the real economy," Paul Schott Stevens, of the Investment Company Institute, told the Wall Street Journal. Cracks started to show in money market accounts late Tuesday when shares in one fund, the Reserve Primary Fund - which touted itself as super safe - fell below the golden $1 a share level. It had purchased what it thought was safe Lehman bonds, never dreaming they could default - which they did 24 hours earlier when the 158-year-old investment bank filed Chapter 11. By Wednesday, banks sensed a run on their accounts. They started stockpiling cash in anticipation of withdrawals. Banks, which usually keep an average of $2 billion in excess reserves earmarked for withdrawals, pumped that up to an astounding $90 billion by Wednesday, Lou Crandall, chief economist at Wrighton ICAP, told The Journal. And for good reason. By the close of business on Wednesday, $144.5 billion - a record - had been withdrawn. How much money was taken out of money market funds the prior week? Roughly $7.1 billion, according to AMG Data Services. By Thursday, that level, fed by the incredible volume of sell orders pouring in from institutional investors like pension funds and sovereign funds, had grown to $100 billion. It was still not enough to stem the tidal wave. The banks knew something drastic had to be done. So did Paulson. The injection of capital into the market was followed up by calls from Treasury Secretary Hank Paulson to major money market players like Bank of New York Mellon and State Street in Boston informing them that federal money was in the market and they should tell their clients the Feds would be back with a plan to stem the constriction in the credit market. Paulson knew the $105 billion injection was not a real solution. A broader, more radical answer was needed. Hours after Paulson made his round of calls to calm the industry, word leaked out that an added $1 trillion bailout of banks was being readied. Investors cheered. At about 3 p.m., news of the plans was filtering up and down Wall Street, fueling a 700-point advance in the Dow Jones industrial average through 4 p.m. Friday. By that time, Paulson had announced the plan. It included insurance on money market accounts, a move that started in quiet Thursday morning, when the former Goldman Sachs executive saved the country from a paralyzing meltdown.

THE HORROR, THE HORROR - chart - Dow Jones Industrial Average

If Treasury Secretary Paulson didnt pump $105B into the economy before the markets opened Thursday, traders believe a tight credit market would have forced the Dow down to the 8,300-point level.
MON-WED: $144.5B pulled from 8,300 money market accounts (MMAs).
THURS: What could have been without additional liquidity - 8,300
THURS: Treasury flows $105B into economy to pump up commercial paper market.
FRI: Paulson announces $1 trillion US bank bailout.

BUSTED

You think the economy is tanking here? It’s worse than you can imagine. In 2008, bankruptcies filed in the Wilkes-Barre office of the Middle District federal court, which handles claims in 17 Northeast and Central Pennsylvania counties, surged more than 10 percent to 3,853. Nearly all of those are personal bankruptcies — fewer than one percent are business bankruptcies.

O’BRIEN SERVES NOTICE

Lackawanna County Commissioner Corey O’Brien speaking for himself said unless Electric City Television broadens its coverage, he would have trouble supporting future funding. Lackawanna County awarded $25,000 for ECTV this year, but Mr. O'Brien said the money should be used to cover other government meetings — not just the meetings of Scranton City Council and county commissioners. ECTV took over for Scranton Today last year and still doesn't have a sense yet of how much its annual expenses will be, noted executive director Mark Migliore. But he acknowledged the $25,000 county award "is a big help." Wait a minute, the County gives money to an entity that maybe is not sure what it will be doing and how much it will cost? But gee thanks, your $25,000 is a big help? Sign me up. Again, going back to private business again, when I was in radio sales and asked for someone’s money, I had a business plan on what they were buying, how much it would cost and what they would get in terms of a benefit. Again my county friends in Lu and Lac, it’s done in private business and that is something you might want to try. Kudos to O’Brien for speaking out on this.