Saturday, April 10, 2010

Blumenthal, Good For Business?

"To blame law enforcement for unemployment,” said Attorney General Richard Blumenthal at a forum sponsored by some of the companies and industries he has sued, “is beyond wrong, it's silly and shouldn't be given any credibility. In fact it is a disservice to public service itself and to the law-abiding, hard-working business people.”

The report from which the above quote is taken does not disclose the reaction from those in the audience to Blumenthal’s remarks, some of whom work for companies sued by Blumenthal.

At an earlier debate with Democratic opponent Merrick Alpert, Blumenthal answered a charge that his many suits have had a deleterious impact on Connecticut’s job growth by charging that, on the contrary, they enhanced business activity and actually create jobs.

This time, at a forum sponsored by some of Connecticut’s major companies, Blumenthal’s response was more polished and carefully modulated.

Almost all business, Blumenthal said, have nothing to fear from law enforcement:

"My job has been to enforce the law. What I'm hearing from this table is a philosophy of law enforcement that Bernie Madoff would love. We've just come through a period where lack of enforcement by the federal government enabled and encouraged one of the greatest economic catastrophes in our nation's history."

Not only do honest businesses follow the law, “they welcome the level playing field that strong law enforcement provides to every one of them," Blumenthal said. "They do not want to be out-competed and underbid by law breakers who save costs on the backs of our consumers or our hard-working men and women."

Actually, Blumenthal’s job is to defend state agencies in legal matters. The attorney general’s office was transformed from this rather modest purpose during the administration of then Attorney General Joe Lieberman, now a U.S. Senator, who advertised himself as the people’s lawyer. That job spec has been considerably enlarged by Blumenthal, under whose direction the hundreds of lawyers who work for him several years ago focused on a target in East Hartford, a computer business that supplied equipment for the state, quickly putting the business out of business.

During the forum, Alpert charged that Blumenthal had deliberately attempted to destroy a small business, Computer Plus Center, by means of a suit charging that the company had defrauded the state.

The owner was not Bernie Madoff, nor was the business as large as some of the corporations sued by Blumenthal whose representatives in the audience heard the attorney general say, by way of answer to a failed suit that may cost the state $18 million, “mistakes were made in that case.”

Who made the mistakes? This would have been the obvious question for anyone on the dais to put to Blumenthal.

A jury had determined that litigators working for the attorney general had improperly sued a company. Did the jury make the mistakes? Were the mistakes made by the prosecuting attorney who permitted the jury to see a discredited affidavit on the basis of which Blumenthal secured an ex parte judgment against the company that permitted him to effectively put Computer Plus Center out of business?

Blumenthal evidently did not agree that the jury finding and its multimillion dollar award provided justice in the case, thereby leveling the playing field for other litigation shy companies that might, in view of the jury’s finding, feel a trifle less cautious in moving into a state in which the attorney general has sued more than 800 companies in the last four years, many of them small Main Street rather than Wall Street businesses.

Instead, Blumenthal promised more litigation, boasted that the state had not paid out a dime and said he expected the award to be reversed on appeal, which may stretch the litigation well beyond the upcoming elections.

Blumenthal is expected to be nominated for the seat in the U.S. Senate left vacant upon U.S. Sen. Chris Dodd’s retirement. He has a commanding lead in the polls over his Republican challengers.

With more than a hundred lawyers at your back, though only a few of them litigate cases, company owners far less wealthy than Madoff eventually collapse under the litigation pressure and settle for deals that might have been struck before Blumenthal’s questionable legal badgering began.

Blumenthal is fond of saying that his office brings in more money to the state -- none of it audited regularly by outside inspectors -- than is spent by his office. But this rude calculus does not tally the amount of money lost to the state though attrition. The jury award to Computer Plus Center is an alarm bell ringing in the night: Given the awesome powers marshaled by the attorney general’s office, what business more comfortably situated in states with less aggressive attorneys general would want to set up shop in suit prone Connecticut?


  1. What do you have to ignore to ignore law enforcement?

    You mean that the currently failed Bankers and other corporations across this nation that Blumenthal tried to sue but was stopped under an obscure and ancient banking law by the Republicans in power in D.C. should have been left on their own as the worldwide economic disaster was on the edge of happening?

    You mean that those kind of International Corporations that Blumenthal was going after should have been left to their own when Blumenthal was actually ahead of the curve trying to stop the shadow bank failure and protect nutmeggers from and that we are still feeling the effects of?

    And the GOP in D.C. blocked him and a number of state AGs from doing that?

    I am impressed with your willingness to stick to your crazy and unregulated free market theories without interference from the mere specter of the law BUT I am not impressed with the results.

    The bush administration and the GOP caused a hell of a lot more unemployment than you have documented here.

    Your rude calculus is that you think people will forget that your unregulated and regurgitated free market insanity caused the disaster we are still trying to dig our way out from under.

    If you dared to be balanced in your writings you would note that reality.

  2. >>free market insanity


    Partially regulated is insanity; and we have entirely too much of that.

    Do we really need 22 licenses and permits to operate a convenience store?

  3. CTMan1,

    I provided a list, as a link, of companies sued by Blumenthal over a 4 year period. Others are working on a longer list over an 8 year period. A glance at that list will uncover very few mammoth Wall Street firms. That list should figure in all your future comments on Blumenthal. The powers of his office are, to put it mildly, unbounded. He knocks off the small Main Street companies by alleging fraudulent transfers of assets, the sole charge on the basis of which Blumenthal is able to impound assets and put the company out of business, In the two cases I’ve examined – there arte only so many hours in the day – that claim has proven to be spurious. The most egregious example comes from the NEP case, also linked in the above piece. The “inspector” in that case – who inspected nothing – alleged in an affidavit used to secure a seizure of assets in an ex parte proceeding (a judicial proceeding in which the accused is not given the opportunity to answer the charges before a judge) that the company either had or was about to fraudulently transfer assets. In sworn deposition, the same inspector admitted 1) he never read Connecticut Fraudulent Transfer Act; 2) he examined no bank records, therefore could not show a fraudulent transfer had been made, and 3) most disturbingly, admitted he had no reason to believe that a fraudulent transfer had occurred or was about to occur in the NEP case.

    In other words, he committed perjury.

    If it does not disturb you that an attorney general can use a defective affidavit to shut down a Connecticut company and seize all its assets, effectively putting it out of business – then I envy you your dispassion.