"The [DOL], charged with enforcing the federal law protecting corporate whistleblowers at publicly-traded companies, has been dismissing complaints on the technicality that workers at corporate subsidiaries aren't covered. The government has ruled in favor of whistleblowers 17 times out of 1,273 complaints filed since 2002, according to department records. Another 841 cases were dismissed. ... Sen. Patrick Leahy, a Vermont Democrat who helped craft the whistleblower provision--part of [SARBOX]--says the law was meant to cover workers in corporate subsidiaries. 'Otherwise, a company that wants to do something shady, could just do it in their subsidiary,' he said. ... Another pending case involves UBS AG, the Swiss bank. The plaintiff, Timothy Flynn, alleged that in June he was suspended from his job as a UBS financial adviser for cooperating with a Massachusetts investigation of the bank's sales of auction-rate securities. Mr. Flynn's attorney, Jason Archinaco, says the [DOL] has asked him to show that the UBS unit that employed his client was covered under the act. ... According to Sen. Leahy, the provision was written to be 'interpreted as broadly as possible.' ... Gregory Jacob, the [DOL's] chief legal officer, has asked the review board to uphold the November decison [in a Siemens case], according to filings in the case. ... Nearly all of Siemens AG's approximately 400,000 employees work at its business units, according to Siemens AG's 2007 SEC filings", Jennifer Levitz at the WSJ, 4 September 2008.
"Two U.S. senators accused the [DOL] of violating the 'spirit and goals' of a federal law aimed at protecting employees who report corporate wrongdoing, and called on the agency to stop rejecting claims from workers at subsidiary companies. ... Sen. Leahy and Sen. Grassley, who wrote those provisions, said that, 'there is simply no basis to assert' that employees of the subsidiaries of publicly traded companoes aren't covered under that acrt, as the department has asserted in numerous recent cases. ... But the [DOL] said, 'We are confident we are correctly enforcing the statute, and do not believe the text of Sarbanes-Oxley was written supports the broader reading that employees of subsidiaries are automatically covered.' Tom Devine, legal director of the Government Accountability Project, a nonprofit group that promotes whistelblower rights, called the department's stance, 'dysfunctional,' saying: 'This one is a no-brainer. There is nothing in the law that allows for that type of loophole.'," my emphasis, Jennifer Levitz at the WSJ, 10 September 2008.
Now class, let's have a lesson in The Law. Laws are interpreted among other things, by using the "Maxims of Jurisprudence". You can find them at California's Civil Code, Sections 3510-3548. Here are some which might help the DOL's legal geniuses interpret SARBOX: "One who grants a thing is presumed to grant whatever is essential to its use", 3522:" "The law respects form less than substance", 3528; "The law never requires impossibilities", 3531; "An interpretation which gives effect, is preferred to one which makes void", 3541 and "Interpretation must be reasonable", 3542. Let's apply these to the instant situation by using reductio ad absurdum. Suppose we have Fortune 500 Inc. (F500), a publicly-held company with $50 billion in sales, $75 billion in market cap and 100,000 employees. F500, now forms a holding company and 100 subsidiaries. It transfers 99,998 employees, all save the CEO and COO to the subsidiaries. Did F500 just exempt 99.998% of its employees from SARBOX whistle-blower provisions? The DOL thinks so. See, you too can be an attorney. Where's the (In)Justice Department on this? Why haven't the DOL employees who adopted this SARBOX interpretation been indicted as justice obstructors, 18 USC 1505? What does "Justice" do anyway? Why haven't the UBS attorneys who apparently encouraged this DOL SARBOX interpretation been indicted as accessories after the fact to witness retaliation, 18 USC 3, 1513? Of course not, they're just "zealous advocates". Who needs the DOL? The Bush administration's "Justice" is blind. To crimes by well-heeled miscreants! This is almost enough to make you want an Obama victory.
Among the things lawyers do to engage in statutory interpretation is look for similar laws, reasoning "by analogy". Does anyone at the DOL or DOJ think a criminal defendant could have a securities fraud indictment dismissed based on his working for a F500 subsidiary? A federal district court judge hearing this, would probably laugh and ask defense counsel if he needs medical attention. What's the SEC's position on this? Are subsidiaries of SEC registrants exempt from SARBOX? I'm a CPA and no client has ever asked me! What's the DOJ's position? Well, Michael Mukasey, will you indict anyone at the DOL as an accessory after the fact, 18 USC 3, to SARBOX violations? Or is it now the DOJ's position that federal securities laws do not apply to persons employed by SEC registrants' subsidiaries?
Now Elaine Chao, AB Mount Holyoke, MBA Harvard, Secretary of Labor, as this is a "no-brainer", will Michael Mukasey indict you you for hundreds of counts of accessory after the fact to witness retaliation, 18 USC 3, 1513? With that academic pedigree, will you now claim to be stupid? Oh, and all the attorneys representing "Fortune 500 Inc." who pushed this? If Uncle Sam built and filled say, a new, 2,500-inmate federal prison just to house these clowns, the incidence of corporate fraud would likely drop 90%. Can you imagine, "NY Big Law" partners telling clients, "Gee, that's really nice. But I can't help you perpetrate a crime, not even for 5,000 billable hours at $900 per. If we get caught I will go to prison and be disbarred. I studied law at Harvard and later learned the value of my license from Lucky Luciano. Sorry, no can do".
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