By Maschi
OK. So I’ve been waiting for someone else to write this, but I recently realized that legal journals (COUGHTheAmericanBarAssociationCOUGH) are more interested in vilifying Christianity than discussing and defending important longstanding, legal principles (but more on that later).
What follows is a dry bit of information, but important to know, because in a litigious society where citizens call 911 because White Castle or McDonald’s or whichever won’t “do it your way” and the police won’t press charges for that abuse (calling 911 – not, not doing it your way) because, well, um, White Castle, in fact, didn’t do it your way, no one else is going to give you this information.
There is a legal doctrine known as “piercing the veil.” Please understand that “piercing the veil” is such a basic legal concept that in law school it’s a topic covered in first year Corporations, which is a prerequisite for countless other courses. In essence, it protects corporate officers and directors from liability for making stupid or bad or poorly contemplated or perhaps just unprofitable, but not illegal business decisions, so long as those decisions do not exceed the power granted to them by the company’s charter. In other words, being a bad businessman is not illegal. This is as it should be. (It’s akin to presidential immunity. Just look at the number of times political opponents attempted to impeach Bush for his exercise of executive power – you know, doing his job no matter how well or poorly.)
Why is this relevant and why is it on my mind? Well, I’m sure you’ve read or heard all about how, Bush, Paulson and the banking queen, Barny Fwthank, gave loads of money, in excess of $150 billion, to AIG. The first $80 billion extension of credit was to allow AIG, or American International Group, to meet its obligations (so were the others for that matter). We were told that this expenditure was necessary because AIG was international and its failure to meet its obligations could lead to the collapse of the worldwide economy and lambs would play tennis with lions and cats and dogs would double date. This was September 2008. Jump a handful of months and enter Cuomo Jr., who sends a particular letter to Mssr. Fwthank:
Cuomo AIG Bonus House Committee Letter
There just isn’t enough room or relevance here to go through these two pages the way I would like, but I absolutely must direct you to this line on page one, “[I]t is not at all clear that these lawyers even considered the argument that it is only by the grace of the American taxpayers that members of [the AIG division purportedly responsible for the damaging losses] even have jobs.” I literally giggled. This is a letter from one longtime government employee to another. Tell me again who has a job only by the grace of the taxpayer? But I digress. Sort of.
You see, Cuomo and his not-fat-enough government paycheck was really ticked off, because, well Obama’s White Castle didn’t do it his way. If you read the letter, Cuomo wanted names, the names of private citizens. These aren’t even officers or directors of AIG (think of the veil). They were employees whose business decisions were approved (if not encouraged) by directors. All they did was negotiate employment contracts and, I might add, well in advance of the economic collapse..
Cuomo, a lawyer, not only chastises “lawyers” for their failure to even consider an argument that is so weak it’s barely debatable (in fact, I would argue that most of those AIG traders would still be employed because unlike Cuomo, they have marketable skills), but he fails to consider the “veil”! Either that or he does consider it and simply disregards a tremendously valuable legal protection. He wouldn’t be the first NY Attorney General to exercise an appalling contempt for the law in exchange for political gain.
I use AIG as an example, but make no mistake – this isn’t just about AIG and bankers. This isn’t just about Wall Street and bonuses. This is one more step towards destroying private enterprise. And it’s no small step. Look again above at the simple principle of “piercing the veil” and think of the number of small businesses that incorporate. (Or form some other type of limited liability company.) This is what drives America. This is the American dream. To own your own business. To be your own boss. To take risks and reap rewards. In short, to be a success.
However, if legal but unsuccessful business decisions made as a business owner or a mere employee subject you to personal liability, what is your or anyone’s incentive to take chances and succeed or fail?
And where will Cuomo’s and his ilk’s reach end? He’s already gone beyond officers and directors and after private citizens who are not charged with, or even accused of, any crimes. He has endangered their lives and the lives of their families (once their names became public, bus tours to their homes were organized). Without a trial before a jury of their peers, Cuomo has “pierced the veil” and bullied at least some of them into returning lawfully earned and contracted for compensation because he deemed it excessive.
Cuomo, descendant of another infamous politician knows about as much about the risks and rewards of private enterprise as does Obama. What they both understand and worship is government bureaucracy. To both of them, private enterprise is, as Obama confessed, the enemy. The wanton piercing of the corporate veil is but another step in the plan to control private enterprise and destroy those that do not bow to the socialist agenda.
Today they are going after employees making seven figures, but that won’t last. Tomorrow will be high six figures, then like in New York, millionaires are defined as those making over $300,000. When that’s done they will continue to lower the bar.
How much above the average salary for your region do you earn?