Cleveland Looks to Pittsburgh

Here are some thumb-blogged notes for a Monday:

Cleveland media's looking to Pittsburgh for lessons on development and
regionalism:

http://blog.cleveland.com/metro/2008/11/pittsburghs_renaissance_holds.html

I was about to post this when the mayor's acting press secretary
Joanna Doven sent out the link. I came across it in Google News
searches while waiting for a court hearing to start.

By the way, in between blog posts you can check my Twitter updates at this link:

http://twitter.com/bobmayo

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To PittGirl: Moving Forward

Someone recently said to me of PittGirl, "I know who she is!" I didn't even ask.

"You know, she said if her identity were ever revealed, she'd stop blogging", I answered. The person assured me of having no intention of going public with the suspected information.

We left it at that.

The sad farewell of PittGirl to the Burghosphere reminds me of the rumor I heard as a child; it was spreading on the playground of Saint Basil Elementary School in Carrick. "There is no Santa Claus" -- some of my classmates seemed to take a self-satisfied pleasure in the momentary power of their bearing this news.

I remember being struck far more, though, by fellow grade-schooler Chuck Rodatis' impressive rebuttal to those who spread doubt about how Santa got into everyone's homes. "He doesn't come down the chimney", said Chuck. "He has skeleton keys."

I look forward to the retconning of PittGirl's story line and hope for a reappearance of "Jane Pitt" in the new year.



[Additional PittGirl reading: Dennis Roddy in the PG; Woy of Have a Good Sandwich with the best roundup of Pittsburghers' reactions.]

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PG: "City Ethics Panel Skirts Law With Private Meeting"

From today's Post-Gazette:

The task of the city's ethics board is to "advance transparency and accountability" in city government, according to a rewrite the board approved yesterday of city rules on gifts, tickets and charitable events.

That being the case, it was ironic that the board met behind closed doors to discuss the new rules.

..and...

Sister Patrice Hughes, the board's chair, said the five board members were "very careful" not to debate the regulations, which they were given in advance. "All it provided was clarity. There were no decisions made" in private, she said.

City Solicitor George Specter, who also sat in on the closed-door session, said the board members have been getting "input from various aspects of the city" on the regulations and were merely "discussing their thoughts" about them.

Those explanations didn't pass muster with legal experts at the Pennsylvania Newspaper Association, who monitor open meetings and open records matters statewide.

It was 13 months ago this week that I began my persistent exchanges with Ethics Board members and the City Solicitor's office over this:

Pittsburgh's Ethics Board is still refusing to release its secret memo from the City Law Department. The secret? The Law Department's advice on how to obey Pennsylvania's Sunshine Act--the law mandating that meetings be open to the public.

You can track the serpentine tale by clicking this link. Tracing the entries backward or forward, I think it will give you some insights into the history there.

At the time, the most interest the PG could muster in the Sunshine Act as interpreted by the City Solicitor's office was in this satirical turn.

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"Quiet Windfall For US Banks"? - Washington Post Notes PNC & National City

There's a reference to the PNC - National City deal buried deep inside a Washington Post article. The story is about a controversial change in bank rules that the Post reports some people think may be illegal.

It's a fascinating piece of reporting, but the explanation of the rule change is itself hidden deep in the story:

Section 382 of the tax code was created by Congress in 1986 to end what it considered an abuse of the tax system: companies sheltering their profits from taxation by acquiring shell companies whose only real value was the losses on their books. The firms would then use the acquired company's losses to offset their gains and avoid paying taxes.

Lawmakers decried the tax shelters as a scam and created a formula to strictly limit the use of those purchased losses for tax purposes.

But from the beginning, some conservative economists and Republican administration officials criticized the new law as unwieldy and unnecessary meddling by the government in the business world.

Here's the Post's PNC - National City reference:

Over the next month, two more bank mergers took place with the benefit of the new tax guidance. PNC, which took over National City, saved about $5.1 billion from the modification, about the total amount that it spent to acquire the bank, Willens said.

Now, the Post's reporting of the behind the scenes controversy in Washington:

In the midst of this late-September drama, the Treasury Department issued a five-sentence notice that attracted almost no public attention.

But corporate tax lawyers quickly realized the enormous implications of the document: Administration officials had just given American banks a windfall of as much as $140 billion.

The sweeping change to two decades of tax policy escaped the notice of lawmakers for several days, as they remained consumed with the controversial bailout bill. When they found out, some legislators were furious. Some congressional staff members have privately concluded that the notice was illegal. But they have worried that saying so publicly could unravel several recent bank mergers made possible by the change and send the economy into an even deeper tailspin.

"Did the Treasury Department have the authority to do this? I think almost every tax expert would agree that the answer is no," said George K. Yin, the former chief of staff of the Joint Committee on Taxation, the nonpartisan congressional authority on taxes. "They basically repealed a 22-year-old law that Congress passed as a backdoor way of providing aid to banks."

The Post story also provides reaction from some experts in the field:

The guidance issued from the IRS caught even some of the closest followers of tax law off guard because it seemed to come out of the blue when Treasury's work seemed focused almost exclusively on the bailout.

"It was a shock to most of the tax law community. It was one of those things where it pops up on your screen and your jaw drops," said Candace A. Ridgway, a partner at Jones Day, a law firm that represents banks that could benefit from the notice. "I've been in tax law for 20 years, and I've never seen anything like this."

More than a dozen tax lawyers interviewed for this story -- including several representing banks that stand to reap billions from the change -- said the Treasury had no authority to issue the notice.

Several other tax lawyers, all of whom represent banks, said the change was legal. Like DeSouza, they said the legal authority came from Section 382 itself, which says the secretary can write regulations to "carry out the purposes of this section."

Good work by Amit R. Paley of the Washington Post. I recommend reading the whole story.


Also this week: "National City was close to bankruptcy, PNC says" in the Post-Gazette:

National City Corp., the Cleveland-based bank being acquired by PNC Financial Services Group, may have faced bankruptcy if it didn't find a buyer.

In the Detroit Free Press:

Without a "definitive transaction" to provide liquidity, the Cleveland-based bank "would face additional regulatory actions, including intervention by the United States federal banking regulators, and/or be required to seek protection under applicable bankruptcy laws in the very near future," PNC said in a regulatory filing Monday.

National City, once among the nation's top 10 subprime lenders, accepted PNC's takeover bid after five straight quarterly losses tied to failed home loans that totaled more than $3 billion. National City's stock plunged 87% this year.

At Forbes.com, this AP story: 'PNC pledges $28M to charities in National City bid', promising to increase charitable giving in areas National City serves.

Pittsburgh-based PNC Financial Services Group Inc. said Wednesday it expects to surpass National City's current annual charitable contributions and community sponsorships with $28 million of support in 2009.

And in today's Trib:

National City Corp. is not receiving government money -- but tried to. The struggling Cleveland-based bank applied to the Treasury for money but was told Oct. 19 it would not receive any, according to a recent Securities and Exchange Commission filing.

Five days later, National City agreed to merge into PNC Financial Services Group in a $5.6 billion deal. PNC, in turn, will get $7.7 billion -- more than enough to cover the acquisition -- from the Treasury in exchange for preferred stock.

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Whect Updates

Judge says he has decided he will not set a trial date at this time.
Pre-trial conference is over.

I'll correct typos on thumb blogging posts later today.

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Move 2nd Wecht Trial to Erie?

Prosecutors just said they will file a motion to move the retrial of Wecht to Erie.

Says they will provide extraordinary documentation -- including (web) links -- of the "absolute saturation of the media" in the Pittsburgh division that would "prohibit" picking a jury here or trying the case here. They argue they would be "unable to find an unpolluted jury".

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Notes From the Ongoing Wecht Pre-Trial Conference

Prosecutors Assistant -- US Attorneys Leo Dillon and James Wilson -- indicate intent to drop 27 "honest services" counts, leaving 14 counts in a new trial for former Coroner Dr. Cyril Wecht.

New Judge Sean McLaughlin indicates he is likely set a new trial date today....though motions by attorneys could delay that. The prosecution thinks the "speedy trial rule" clock could run out on December 24.

Wecht's defense attorneys indicate they will ask the new judge to revisit motions denied by Judge Schwab.

They believe rulings by the new judge in their favor could end the case.

Judge orders government to file motions on revised indictment by next Friday, November 14th.

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Court Fight Over Maternity Ward Voting Returns

Notes from my Channel 4 Action News report for 11 PM:

NINE EXPECTANT MOMS SUDDENLY HAVING THEIR BABIES WANTED EMERGENCY BALLOTS TO VOTE FROM THEIR MAGEE HOSPITAL BEDS, BUT IT TURNED INTO A COURT FIGHT.

Cliff Levine, Democratic Attorney:
"I think if people understood what was going on in court today, I
think they'd be pretty shocked."

ELECTION PROTECTION AND DEMOCRATIC ATTORNEY VOLUNTEERS WERE SURPRISED THAT REPUBLICAN LAWYERS CHALLENGED AFFIDAVITS FROM MOMS, DOCTORS, AND NURSES, BECAUSE THEY WEREN'T NOTARIZED.

Eileen Yacknin, Activist Attorney:
"(The women are) hospitalized suddenly in Magee right now. They've all asked for the opportunity to obtain emergency absentee ballots in order to be able to vote tonight."

Cliff Levine, Democratic Attorney:
"We have a couple of hours here to get a vote in, and we had nine pregnant women that the Republicans were vociferously arguing to prevent their right to vote. I frankly thing it's outrageous. "

Ron Hicks, Republican Attorney:
"There's got to be certain protections in place, and part of that is, is there really in fact an an emergency. we don't know if there's really an emergency, we're relying on really just paper."

AN ATTORNEY WHO'S ALSO A NOTARY STEPPED UP TO HELP.

Chuck Perego, Attorney & Notary:
"I called my secretary at home, she was kind enough to go to my office and get my notary seal, and she met me at the lobby of Magee Women's Hospital. We went up and interviewed the nurses and had them resign the affidavits."

Q&A with Ron Hicks, Republican Attorney:

Q: "Do you think these women in labor at the hospital were posing as other voters?"

Hicks: "Well, i don't know. i don't know what the circumstances are here."

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Pregnant Emergency Voter Update

The court now has notarized statements from the pregnant women at Magee hospital.
They have to get their ballots to them by 8 pm. It's 7:37 at this writing.

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Election cases in court tonight

There are some disputed cases involving some patients in hospitals who want emergency absentee ballots to vote tonight. They include at least one veteran at the VA hospital and some pregnant women who are delivering their babies at Magee and Montefiore Hospitals.

Dems are arguing affidavits signed by doctors or nurses comply with the law. The Republicans are arguing that the document must be notarized.

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