Nassau County Loses It's Fight To Deny The County Controller His Audit

makes you wonder what the County of Nassau is hiding.......

Betsy Combier

Decided on June 17, 2011

Supreme Court, Nassau County

George Maragos

In the Matter of the Application of the NASSAU COUNTY Town of North Hempstead, Plaintiff-Petitioner,
against
County of Nassau and GEORGE MARAGOS, as Comptroller of the County of Nassau, , Defendants-Respondents.

6733/11

Denise L. Sher, J.

The following papers have been read on this application:

Papers Numbered
Order to Show Cause, Verified Petition, Affirmation, Affidavit and Exhibits1
Affirmations in Opposition and Exhibits2
Reply Affirmation and Exhibits3

Upon the foregoing papers, it is ordered that the application is decided as follows: Plaintiff-petitioner moves, pursuant to CPLR Article 78 and §§ 3001(2), 6311, 6313, for (1) an order granting a writ of prohibition permanently enjoining defendants-respondents County of Nassau ("County") and George Maragos as Comptroller of the County of Nassau ("Maragos") from proceeding with an audit of the Town of North Hempstead's Clinton G. Mark Park District; (2) an order pursuant to CPLR § 2304 quashing defendant-respondent Maragos' subpoena duces tecum served on plaintiff-petitioner Town of North Hempstead ("Town") on May 2, 2011; and (3) a judgment declaring that defendants-respondents County and Maragos lack jurisdiction to audit, inter alia, plaintiff-petitioner Town and that Section 402(6) of the Nassau County Charter is unconstitutional to the extent that it authorizes the County and/or its Comptroller to audit, inter alia, plaintiff-petitioner Town. Defendants-respondents oppose the application.

After months of what proved to be a futile attempt to conduct an audit, defendant-respondent Maragos served a subpoena duces tecum on plaintiff-petitioner Town pursuant to Sections 402(6) [*2]and 2213 of the Nassau County Charter on May 2, 2011, seeking the production of, inter alia, Clinton G. Mark Park District's ("Park District") Charter and/or By-Laws, its Board Minutes from 2009 to present and its financial records to enable an audit of said Park District. Plaintiff-petitioner Town promptly commenced this hybrid action challenging the constitutionality of the Nassau County Charter insofar as it permits defendant-respondent Maragos to audit plaintiff-petitioner Town and its departments. Both permanent injunctive relief and declaratory relief are sought. A temporary restraining order enjoining defendants-respondents County and Maragos' audit of plaintiff-petitioner Town was granted on May 6, 2011.


Plaintiff-petitioner Town is a "municipal corporation" of the State (see Town Law § 2; Town of Montauk, Inc. v. Pataki, 40 AD3d 772, 835 N.Y.S.2d 447 (2d Dept. 2007)), and a "political subdivision" of the State pursuant to General Municipal Law § 100(1). See Ames v. Smoot, 98 AD2d 216, 471 N.Y.S.2d 128 (2d Dept. 1983). Defendant-respondent County is also a "municipal corporation" of the State (County Law § 3) and a "political subdivision" of the State pursuant to Municipal Law § 100. Both plaintiff-petitioner Town and defendant-respondent County are formed for the purpose of exercising such powers and discharging such duties of local government and administration of public affairs "as may be conferred or imposed upon them by law (emphasis added)." See Town Law § 2; County Law § 3.

Pursuant to Art. V, Section 1 of the New York State Constitution, via the enactment of General Municipal Law §§ 33, 34, the State Legislature has authorized the State Comptroller to supervise the accounts and financial affairs of this State's municipal corporations. General Municipal Law §33 authorizes the State Comptroller "to cause the accounts of all officers of each... municipal corporation, industrial development agency, district, agency and activity to be inspected and examined by one or more examiners of municipal affairs for such periods as the comptroller shall deem necessary." General Municipal Law § 34 authorizes the State Comptroller and each examiner of municipal affairs "to examine into the financial affairs of every . . . municipal corporation, industrial development agency, district, fire company as defined in section two hundred four-a of this chapter, agency and activity. . . ."

Section 402(6) of the Nassau County Charter which was also enacted by the State Legislature authorizes the County Comptroller to "examine and audit of his own motion or when directed to do so by resolution of the County Legislature the accounts and records of any town or special district and make reports from time to time when requested by the county executive or county legislature on the financial condition of the county or any and all of its political subdivisions."

Plaintiff-petitioner Town maintains that the County Charter is limited to enabling the County Comptroller to audit only political subdivisions of the County and since plaintiff-petitioner Town is a political subdivision of the State and the Park District is an administrative department of plaintiff-petitioner Town, defendant-respondent County Comptroller lacks authority to audit it. Plaintiff-petitioner Town maintains that the County Charter is unconstitutional insofar as it can be read to permit the County Comptroller to audit political subdivisions of the State.

Plaintiff-petitioner Town rely on Matter of Investigation of Inwood Fire Dist. by Comptroller of Nassau County, 152 Misc 2d 518, 577 N.Y.S.2d 575 (Supreme Court Nassau County 1991), in which the Court held that the County Comptroller lacked the authority to audit fire departments. In that case, the Court noted that "Section 402(6) of the County Charter authorize[d] the County Comptroller to examine and audit the accounts and records of any town or special district, and make [*3]reports on the financial condition of the county or any or all of its political subdivisions . . ." and that "Section 405 mandates that each special district within the county file an annual audit, prepared by a certified public accountant, with the County Comptroller." Id. at 523. The Court further noted that Section 1502 of the County Charter defines special districts as "waters, sewer, drainage, and garbage collection and disposal which may be created or expanded by authority of the County" and did not include fire districts, which are political divisions of the State and district corporations. See id. at 518-519; Town Law § 174(7); General Corporation Law § 3. In addition, the Court held that "the authority of the county to conduct audits . . . is limited to the examination of the financial affairs of the county and do not extend to political subdivisions of the State." See Matter of Investigation of Inwood Fire Dist. by Comptroller of Nassau County, supra at 523. It held "while the county has the authority to audit political subdivisions of the county, and those special districts which it may establish or extend, the county is without jurisdiction to audit political subdivisions of the State, the creation and extension of which is within the sole exclusive authority of the State Comptroller." Id.

The Court's decision in Matter of Investigation of Inwood Fire Dist. by Comptroller of Nassau County, supra is readily distinguishable. The fire district was found to be a district corporation, not a town nor a special district which the County Comptroller is authorized to audit by the County Charter. See General Corporation Law § 3, General Construction Law § 66. Therefore, the Court interposed the County Comptroller's auditing jurisdiction bestowed on it by the County Charter as not including it.

The Park District is not a district corporation.

Furthermore, it is questionable whether Matter of Investigation of Inwood Fire Dist. by Comptroller of Nassau County, supra was correctly decided. Section 406(2) of the County Charter does not refer to Section 1502 of the County Charter. Section 102(16) of the Real Property Tax Law defines "special district" as
"a town or county improvement district, district corporation or other district established for the purpose of carrying on, performing or financing one or more improvements or services intended to benefit the health, welfare, safety or convenience of the inhabitants of such district or to benefit the real property within such district, and in which real property is subject to special ad valorem levies or special assessments for the purposed for which such district was established (emphasis added)."

This definition includes the fire district in Inwood.

Furthermore, the exclusion of parks in Section 1502 of the County Charter's definition of "special districts" does not preclude defendant-respondent County Comptroller's auditing of parks as a "special district." The "special districts" discussed in Section 1502 governs the creations and extensions of the special districts enumerated therein by a Town (emphasis added). It requires the Town Clerk to submit a certified copy of a petition to create or extend only water, sewer, drainage or garbage and refuse collection and disposal districts to the Clerk of the County Board of Supervisors. The County Board of Supervisors must then determine by resolution whether the creation or extension of the proposed district conforms with a comprehensive or general plan therefor adopted by the County and is in the best interests of the County's inhabitants. Should either of those determinations be negative, the County Board of Supervisors must enact a resolution disapproving of the creation or extension of the district by a Town. Thus, Section 1502 of the County Charter governs a Town's creation and extension of only a limited number of special districts and the Court's [*4]limitation in Matter of Investigation of Inwood Fire Dist. by Comptroller of Nassau County, supra, of the County Comptroller's authority to audit only those special districts enumerated in Section 1502 of the County Charter was erroneous.

Whether the Park District is an administrative department of plaintiff-petitioner Town or a special district, defendant-respondent County Comptroller has authority to audit it.

A petition seeking Article 78 relief in the nature of prohibition should be granted upon a showing that a "body or officer proceeded, is proceeding, or is about to proceed without or in excess of jurisdiction . . . ." CPLR § 7803(2).

"[A] petitioner seeking a writ of prohibition must demonstrate that: (1) a body or officer is acting in a judicial or quasi-judicial capacity, (2) that body or officer is proceeding or threatening to proceed in excess of its jurisdiction and (3) petitioner has a clear legal right to the relief requested." Matter of Town of Huntington v. New York State Div. of Human Rights, 82 NY2d 783, 604 N.Y.S.2d 541 (1993). See also Holtzman v. Goldman, 71 NY2d 564, 528 N.Y.S.2d 21 (1988).

The statute relied on by defendant-respondent Maragos in his issuance of the subpoena duces tecum, Section 402(6) of the Nassau County Charter, was enacted by the New York State Legislature in 1936. See L. 1936 ch 879. See also Mahler v. Gulotta, 297 AD2d 712, 747 N.Y.S.2d 562 (2d Dept. 2002), lv den., 98 NY2d 615, 752 N.Y.S.2d 1 (2002); Torre v. County of Nassau, 86 NY2d 421, 633 N.Y.S.2d 465 (1995); Korn v. Gulotta, 72 NY2d 363, 534 N.Y.S.2d 108 (1988); Burke v. Krug, 161 Misc. 687, 291 N.Y.S.2d 897 (Supreme Court Nassau County 1936). Accordingly, the applicability of the Home Rule Law is questionable. See Mahler v. Gulotta, supra at 713, citing Municipal Home Rule Law § 33(1); Torre v. County of Nassau, supra; Korn v. Gulotta, supra; Burke v. Krug, supra. Assuming, arguendo, that the Municipal Home Rule Law applies, the County Charter's delegation of authority to the County Comptroller to audit towns and special districts remains valid.

Neither the New York State Constitution, the General Municipal Law nor any other statute applicable here specifically bar any local governmental entity from exercising concurrent auditing powers (like those sought to be exercised here) with the State Comptroller.

Municipal Home Rule Law § 10(1)(ii)(a)(11)-(12) gives a county, city, town or village the power to adopt and amend local laws not consistent with the constitution or any general law relating to "the protection and enhancement of its physical and visual environment" and for the "government, protection, order, conduct, safety, health and well-being of persons or property therein. . . ." See DJL Restaurant Corp. v. City of New York, 96 NY2d 91, 725 N.Y.S.2d 622 (2001). In keeping with Article IX (2)(c)(ii) of the New York State Constitution, Municipal Home Rule Law § 10(1)(ii) prohibits those municipalities "from adopting local laws inconsistent with the State Constitution or any general law of the State . . . ." DJL Restaurant Corp. v. City of New York, supra at 94. "Broadly speaking, State preemption occurs in one of two ways — first, when a local government adopts a law that directly conflicts with a State statute and second, when a local government legislates in a field for which the State Legislature has assumed full regulatory responsibility." DJL Restaurant Corp. v. City of New York, supra at 95, citing Consolidated Edison Co. of New York, Inc. v. Town of Red Hook, 60 NY2d 99, 468 N.Y.S.2d 596 (1983); New York State Club Ass'n, Inc. v. City of New York, 69 NY2d 211, 513 N.Y.S.2d 349 (1987). "The State Legislature may expressly articulate its intent to occupy a field, but it need not (fn. omitted). It may also do so by implication." DJL Restaurant Corp. v. City of New York, supra at 95. "An implied intent to preempt may be found in a [*5] declaration of State policy by the State Legislature . . . or from the fact that the Legislature has enacted a comprehensive and detailed regulatory scheme in a particular area..' " DJL Restaurant Corp. v. City of New York, supra at 95, citing Consolidated Edison Co. of New York, Inc. v. Town of Red Hook, supra at 105; Robin v. Incorporated Village of Hempstead, 30 NY2d 347, 334 N.Y.S.2d 129 (1972). "In that event, a local government is precluded from legislating on the same subject matter unless it has received "clear and explicit" authority to the contrary.' " DJL Restaurant Corp. v. City of New York, supra at 95, quoting People v. DeJesus, 54 NY2d 465, 446 N.Y.S.2d 207 (1981), citing Robin v. Incorporated Village of Hempstead, supra at 350-351.

"More specifically, a local law regulating the same subject matter is deemed inconsistent with the State's overriding interests because it either (1) prohibits conduct which the State law, although perhaps not expressly speaking to, considers acceptable or at least does not proscribe . . . or (2) imposes additional restrictions on rights granted by State law.' " DJL Restaurant Corp. v. City of New York, supra, at 95, quoting Jancyn Mfg. Corp. v. Suffolk County, 71 NY2d 91, 524 N.Y.S.2d 8 (1987).

Municipal Home Rule Law § 11(g) precludes legislative bodies which are statutorily defined as "the board of supervisors, board of aldermen, common council, council, commission, town board, board of trustees or other elective governing board or body now or hereafter vested by State statute, charter or other law with jurisdiction to initiate and adopt local laws or ordinances, whether or not such local laws or ordinances require the approval of the elective chief executive officer or other official or body to become effective" (see Municipal Home Rule Law § 2(7)) from adopting a local law which supersedes a State statute if such local law "[a]pplies to or affects powers of the State Comptroller in relation to auditing or examining municipal accounts or prescribing forms of municipal accounting or in relation to approval or disapproval of establishment or extension of fire districts or special districts." Municipal Home Rule Law § 11(1), (1)(g).

In a letter dated April 18, 2005, Alan Lebowitz, General Counsel to the New York State Comptroller, opined that the Nassau County Comptroller had the authority to audit Nassau County Sanitary District No. 6. He reasoned that "there is nothing in section 402 or any other provision of the County Charter that in any way diminishes, impairs or encroaches on the express statutory authority of the State Comptroller to conduct examinations of special districts" and that "the grant of authority in article 3 (of the General Municipal Law) is independent of, and in no way affected by, the provisions of the County Charter (see e.g. McCall v. Barrios-Paoli, 93 NY2d 99, 688 N.Y.S.2d 107 (1999), holding that the audit authority of the New York City Comptroller as set forth in the City Charter did not diminish the State Comptroller's audit authority under the General Municipal Law; see also Matter of Investigation of Inwood Fire Dist. by Comptroller of Nassau County, supra)." Accordingly, he noted that "the State Comptroller had audit jurisdiction in many instances where a local comptroller also shares that authority."

This Court agrees. Nothing in the State Constitution or General Municipal Law §§ 33 or 34 is indicative of any intent on the part of the State Legislature to limit auditing of municipal corporations, political subdivisions or special districts exclusively to the State Comptroller, nor does permitting concurrent auditing powers conflict with or impede upon the authority of the State Comptroller in any way. Finally, interpreting Section 402(6), the Court finds that the fact that the County Comptroller may "make reports from time to time when requested by the County Executive [*6]or County Legislature on the financial condition of the County or any and all of its political subdivisions" does not limit the authority otherwise bestowed on him to "examine and audit of his own motion or when directed to do so by resolution of the County Legislature the accounts and records of any town or special district (emphasis added) . . . ."

Plaintiff-petitioner Town's reliance on Patterson v. Carey, 41 NY2d 714, 395 N.Y.S.2d 411(1977) and New York Public Interest Research Group, Inc., by Lawson v. New York State Thruway Authority by Hennessy, 77 NY2d 86, 564 N.Y.S.2d 708 (1990) is misplaced. In those cases, unlike here, the challenged legislation presented an impediment to the State Comptroller's exercise of his discretionary authority. Plaintiff-petitioner Town also relies on the Court of Appeals holding in New York Public Interest Research Group, Inc., by Lawson v. New York State Thruway Authority by Hennessy, supra at 89, quoting Patterson v. Carey, supra at 723 that:

"NY Constitution, article V, § 1 addresses the Comptroller's constitutional jurisdiction with regard to the State and its political subdivisions and deems him the independent auditing official for the affairs of the State.' The Legislature is empowered to define the Comptroller's powers and duties' in respect to the State and its political subdivisions and to assign the Comptroller the supervision of accounts of political subdivisions."

That holding, however, does not preclude the Legislature from delegating or local municipal corporations from exercising concurrent auditing powers. Nor is the State Comptroller's exercise of his jurisdiction to audit approximately 252 Towns since 2005 contrary to concurrent auditing authorities.

In the interests of judicial economy, defendants-respondents County and Maragos' Affirmation in Opposition shall be deemed their Answer. CPLR §§405, 2001. See RDK Medical, P.C. v. General Assur. Co., 8 Misc 3d 1025(A), 806 N.Y.S.2d 448 (NY City Civ. Ct. Kings County 2005).

This Court does not find the information sought by the defendants-respondents County and Maragos' subpoena duces tecum to be overly broad or unduly burdensome.

Plaintiff-petitioner Town is directed to comply with the subpoena duces tecum within fourteen (14) days of service of a copy of this Order.

Accordingly, the Petition is DENIED and the proceeding is dismissed.

This constitutes the Decision and Order of this Court.

E N T E R :
DENISE L. SHER, A.J.S.C.
XXX
Dated: Mineola, New York
June 17, 2011

The Kagan Principle by James Taranto

The Kagan Principle

The more stubbornly corrupt the government is, the more justified it is in curtailing fundamental liberties.
By JAMES TARANTO, Wall Street Journal
LINK

We've been thinking a lot about Justice Elena Kagan this week. Normally we'd file such a revelation under "The Lonely Lives of Columnists," but our musings are about weighty matters of constitutional law--specifically, Kagan's dissent in Arizona Free Enterprise Club's Freedom PAC v. Bennett, the final case the Supreme Court decided this term.

As we noted Tuesday, the 5-4 decision struck down an Arizona law that penalized political speech by subsidizing opposing speech: If, say, you gave $100 of your own money to a Democratic candidate for state Senate, Arizona would take $100 from the taxpayers and give it to the Republican candidate. The provision applied to "independent" expenditures too, so that if you gave $100 to an advocacy group campaigning on behalf of the Democrat, the Republican's campaign would get $100 in tax money to spend as it saw fit--even though the Democratic candidate, by law, was forbidden to influence the advocacy group's efforts.

In her dissent, joined by three other justices, Kagan explained her objection through a roundabout hypothetical:

Imagine two States, each plagued by a corrupt political system. In both States, candidates for public office accept large campaign contributions in exchange for the promise that, after assuming office, they will rank the donors' interests ahead of all others. As a result of these bargains, politicians ignore the public interest, sound public policy languishes, and the citizens lose confidence in their government.

Recognizing the cancerous effect of this corruption, voters of the first State, acting through referendum, enact several campaign finance measures previously approved by this Court. They cap campaign contributions; require disclosure of substantial donations; and create an optional public financing program that gives candidates a fixed public subsidy if they refrain from private fundraising. But these measures do not work. Individuals who "bundle" campaign contributions become indispensable to candidates in need of money. Simple disclosure fails to prevent shady dealing. And candidates choose not to participate in the public financing system because the sums provided do not make them competitive with their privately financed opponents. So the State remains afflicted with corruption.

Voters of the second State, having witnessed this failure, take an ever-so-slightly different tack to cleaning up their political system. . . . The second State rids itself of corruption.

"The second State," of course, is Arizona--although by framing the narrative as a hypothetical, Kagan is able to imagine, rather than having to establish, that through such measures it "rids itself of corruption."

On Tuesday we noted a provocative argument put forth by Sean Parnell of the Center for Competitive Politics, a pro-free-speech group. In hypothesizing that the restrictions the court has upheld are insufficient to rid a state of corruption, Parnell argues, Kagan is all but admitting that is the case. Since the court has accepted those curtailments of free speech on the ground that they serve the "compelling interest" of preventing corruption, Kagan's dissent implies that they are unconstitutional as well.

Thinking about it more deeply, though, we came up with a counterargument in Kagan's defense. Corruption is a matter of degree. Contrary to the language of Kagan's opinion, a state is not simply "afflicted with" or "rid . . . of" corruption. It's possible the sort of speech restrictions the court currently upholds reduce corruption enough to be justified, even if they fall short of eliminating it altogether. Kagan argues that the same was true of Arizona's now-voided law.

She does not claim that Arizona actually succeeded in ridding itself of corruption, and it seems highly unlikely that it did. Thus if Kagan's view had prevailed, other states likely would have adopted even greater burdens on political speech, of which Kagan and her like-minded colleagues would have approved on similar grounds.

James Taranto on the Kagan Principle.

"The difficulty," Kagan writes, "is in finding the Goldilocks solution--not too large, not too small, but just right." Finding such solutions is the job of lawmakers, not judges: "Arizonans deserve the chance to reform their electoral system." To sloganeer E.J. Dionne, that is an expression of judicial restraint. "Remember how sympathetic conservatives are supposed to be to the states as 'laboratories of democracy,' pioneering solutions to hard problems?" he grouses. "Tell that to the people of Arizona."

But there's a world of difference between judicial restraint and judicial dereliction of duty. James Madison was not Goldilocks, and the First Amendment says, "Congress shall make no law." (That applies to the states as well, thanks to the doctrine of incorporation.) The court is obliged to strike down laws violating freedom of speech even if they were enacted with the best of intentions.

There's something else amiss with Kagan's reasoning. To illustrate, let's alter her hypothetical slightly.

In the Taranto hypothetical, as in the Kagan one, the first state enacts contribution limits, mandatory disclosure and public financing, and is still afflicted with corruption. The second state enacts the Arizona plan, which is upheld in a 5-4 decision written by Justice Kagan.The second state, however, also remains afflicted with corruption, so a third, fourth and fifth state each enact progressively more draconian restrictions on political speech.

Presumably at some point this progression would come to an end. Either some state's restrictions would prove too burdensome for the court to uphold, or--far less likely--a state would actually succeed in ridding itself of corruption. Until one or the other ultimate outcome, however, the court's jurisprudence would be governed by what we hereby deem the Kagan Principle: The more stubbornly corrupt the government is, the more justified it is in curtailing fundamental liberties.

In real life, and notwithstanding Kagan's objection, the court reached its endpoint this week when it struck down the Arizona scheme. But Justice Sandra Day O'Connor tells The New Republic that she would have voted to uphold it. Since her successor, Justice Samuel Alito, was with the majority, that would have changed the outcome.

And while Kagan's dissent refers repeatedly to "corruption and the appearance of corruption," O'Connor places special emphasis on the latter: "As a former state legislator," writes TNR's Jeffrey Rosen, "O'Connor . . . understands that public confidence in judges and legislators can be undermined just as much by the appearance of possible corruption--or the impression that money is buying access or votes--than by quid pro quo examples of vote-buying."

Hence the O'Connor Corollary to the Kagan Principle: Merely by appearing to be corrupt, the government can justify its curtailment of fundamental liberties.

The idea of rewarding corrupt (or corrupt-looking) politicians by disregarding the constitutional limits of their powers is breathtakingly perverse. "The First Amendment's core purpose is to foster a healthy, vibrant political system full of robust discussion and debate," Justice Kagan observes in her dissent. She's right about that--and deeply wrong to think she has a better way of accomplishing that goal than by protecting the freedom of speech.
 
The Supreme Court’s continuing defense of the powerful

By E.J. Dionne Jr., Published: June 29, 2011
LINK

The United States Supreme Court now sees its central task as comforting the already comfortable and afflicting those already afflicted.

If you are a large corporation or a political candidate backed by lots of private money, be assured that the court’s conservative majority will be there for you, solicitous of your needs and ready to swat away those pesky little people who dare to contest your power.

This court has created rules that will have the effect of declaring some corporations too big to be challenged through class actions, as AT&T customers and female employees at Wal-Mart discovered.

And remember how sympathetic conservatives are supposed to be to the states as “laboratories of democracy,” pioneering solutions to hard problems?

Tell that to the people of Arizona.

They used a referendum to establish a highly practical system of financing political campaigns that the court, in a 5-4 decision Monday, eviscerated. It was designed to reduce corruption and give a fighting chance to candidates who decide to forgo contributions from special interests.

The people acted, noted Justice Elena Kagan in a brilliantly scalding dissent, after a scandal in which “nearly 10 percent of the state’s legislators were caught accepting campaign contributions or bribes in exchange for supporting a piece of legislation.”

Under Arizona’s “clean elections” initiative, candidates who raised a modest amount in very small contributions could receive a lump sum of public money. They could raise no further private funds.

No candidate had to join the public system. But if a privately financed candidate or the interest groups supporting his or her campaign started outspending one who was publicly financed, the public system came to the rescue with additional cash so the “clean money” candidate wouldn’t be blown out of the race by lethal dollar bills.

Why was this important? Kagan was spot on: “Candidates will choose to sign up” for public funding “only if the subsidy provided enables them to run competitive races.” Such breathtaking common sense has been missing from the majority’s recent campaign finance decisions — notably its Citizens United ruling, also a 5-4 conservative ukase, allowing our poor, beleaguered corporations to expand their power in American politics.

Here’s the stunning part: For years, opponents of campaign finance reform have accused those who want to repair the system of trying to reduce the amount of political speech. But Arizona’s law, as Kagan pointed out, “subsidizes and so produces more political speech.” And then there was this shot at Chief Justice John Roberts’ majority opinion: “Except in a world gone topsy-turvy, additional campaign speech and electoral competition is not a First Amendment injury.”

Indeed, Roberts had to argue that those terribly downtrodden candidates financed with private money had their speech “burdened,” simply because their publicly financed opponents had the means to respond.

Kagan and the dissenters stood up for free speech. Roberts’ majority defended paid speech. The dissenters want to allow candidates to talk; the majority wants to enhance money’s ability to talk.

Roberts was especially exercised over any notion of “leveling the playing field” between private-money candidates and their challengers. He even included a footnote calling attention to the Citizens Clean Elections Commission’s Web site, which once said the law was passed “to level the playing field when it comes to running for office.” Horrors!

Kagan archly noted the “majority’s distaste for ‘leveling’ ” and then dismissed its obsession, observing that Roberts failed to take seriously the Arizona law’s central purpose of containing corruption. Leveling was the means, not the end.

Nonetheless, pay heed to how this conservative court majority bristles at nearly every effort to give the less wealthy and less powerful an opportunity to prevail, whether at the ballot box or in the courtroom. Not since the Gilded Age has a Supreme Court been so determined to strengthen the hand of corporations and the wealthy. Thus the importance of the Wal-Mart and AT&T cases, the latter described by the New York Times as “a devastating blow to consumer rights.” Will the court now feel so full of its power that it takes on the executive and legislative branches over the health-care law?

In 1912, Theodore Roosevelt warned that the courts had “grown to occupy a position unknown in any other country, a position of superiority over both the legislature and the executive.” Worse, “privilege has entrenched itself in many courts just as it formerly entrenched itself in many legislative bodies and in many executive offices.”

What happens to a democracy when its highest court dedicates itself to defending privilege? That’s the unfortunate experiment on which we are now embarked.

ejdionne@washpost.com

Sunny Sheu - Was He murdered Because He Had Information About Judge Joseph Golia?

I knew Sunny. Not well, but he and I corresponded many times about his case, and we ironically met for the last time at a cocktail party for our new Attorney General, Eric Schneiderman.

I have posted his story on this blog and on my website, Parentadvocates.org:
Sunny Sheu, Judicial Reform Activist, Dies A Few Months After Saying He Was Pursued By Judge Joseph Golia in Queens Supreme Court

In my article is the video that Sunny did just 3 days before he died/was killed (The police dept evidently cremated his body before an investigation took place)

Sunny desperately wanted an investigation of the Judge Joseph Golia, and considered Schneiderman a step in the right direction. Instead, we are investigating the death of Sunny Sheu.

See a summary here.

Activist Dead Weeks After Posting Video About His Fears
Black Star News
LINK

Part One of a Series

Since his death last summer, associates of Sun Ming Sheu, an activist fighting alleged judicial corruption in New York, remain convinced that he was murdered and that police aren't investigating his death because of a coverup.

They point to the alleged kidnapping and death threats by New York Police Department (NYPD) officers Sheu reported to the FBI, the highly suspicious circumstances of Sheu’s injury, the contradictions in the official reports of his death, and most conspicuously, the lack of any investigation by law enforcement, even after the manner of Sheu’s death was ruled "undetermined" by the Medical Examiner, making an investigation legally mandatory.

They also cite a motive- the silencing of Sheu three days after he declared that he had discovered proof of felonies by a New York State Supreme Court Judge.

Perhaps the most ominous evidence of foul play, the associates say, is the video Sunny Sheu made weeks before his death - now posted on Youtube - in which he predicts his own murder and names the parties he feels will be responsible; parties including a sitting State Supreme Court Judge and two detectives of the Queens District Attorney office whom he had claimed "kidnapped" and threatened him months prior.

Sheu’s associates also question why NYPD officers removed Sheu's body from the Queens hospital, at 5 AM, hours after his death, and transferred it to the Medical Examiner, who was provided with a letter stating that "no criminality" was involved, all without even a cursory investigation.

At the same time, the precinct involved in the removal, the 109, insisted that Sheu had suffered "no head trauma", a position contradicted by the Medical Examiner, who concluded that Sheu died of "blunt force trauma to the head with skull fractures and brain injuries".

Darkening the story further is the improper treatment of Mr. Sheu’s body by the New York Queens Hospital and their false statements regarding his injuries. (The role of the New York Hospital of Queens in the disposition of Sheu’s body will be elucidated in part two of this series.)

Add the epilogue of the NYPD's refusal to release relevant documents requested by this newspaper under the Freedom of Information Act (FOIA)- and all the components of a deeply disturbing mystery are in place.

Whatever the direct cause of Sunny Sheu’s tragic death, this is a story of grave national concern; it demonstrates from beginning to end the systemic failure of our government to protect the rights, and even the life, of a resident of the United States who had been threatened by government officials.

I first met Sun Ming "Sunny" Sheu, an immigrant from Taiwan, when he asked me to write a story about his ten-year struggle with corruption at every level of New York government. Mr. Sheu was a small, wiry man, with a mischievous sense of humor who could express fierce outrage one moment and chuckle at the absurdity of it all the next. Though his English was rudimentary, he radiated intelligence, and humble self-assurance. He felt that fighting for one’s rights was a patriotic duty, a privilege of living in America that was to some degree its own reward.

Sheu’s problem centered around his residential property, a simple two story house in Flushing, which he said had been wrongfully wrested from him by a mortgage company with the aide of a judge, Joseph Golia of State Supreme Court in Queens. He claimed Golia was "corrupt" and had consistently ruled against him and in favor of the bank, to wrongfully ensure that he never recovered his property.

Judge Joseph Golia

Judge Golia, through his law clerk Mitchell Kaufmann, today declined to comment or to be interviewed for this report. "The judge will not sit for an interview with you," Kaufmann said, adding that Judge Golia also would not respond even if the questions were submitted in writing and by email message.

Sheu’s story of his struggle with Judge Golia was so compelling that The Black Star News covered it in depth, in a three-part series entitled "Junk Justice", which ran beginning in July 2009. The articles, which provide a detailed account of Sheu’s struggle with mortgage fraud and alleged court corruption can be found online. What follows is a condensed and cursory version of the pertinent events.

The Background Story

Sheu's ordeal began over 10 years ago when a bank representative knocked on his door and said he was there to inspect the house for its new owner. The problem was that Sheu had never sold the house. It turns out that someone had forged critical documents and used them to illegally sell the property.

Sheu alerted all relevant authorities; including the police, the bank that held the mortgage, and the title insurer of the property. Eventually the parties involved in forging the documents were prosecuted, pleaded guilty to forgery, and went to jail.

Sheu hoped that with all the evidence in his favor, the matter would be quickly resolved--it was actually only the beginning of his nightmare.

But Centex Home Equity, the bank that held the original mortgage, acted as if the fraudulent sale had been legitimate, ignoring all the documentation submitted by Sheu regarding the fraud, including the police report he'd filed.

Centex filed a lawsuit on December 12, 2001, against Sheu in State Supreme Court, in Queens County. The bank wanted a default judgment on the property and foreclosure, claiming that the “new owners” were delinquent on mortgage payments. In reality, of course, there was never any legal “new owner”.

The Centex case against Sheu went before Judge Golia, in Queens County. Sheu said he was stunned when Judge Golia also ignored the obvious fact that the “sale” had been fraudulent, which would obviate the claim against him. Instead of immediately restoring Sheu’s rightful ownership, he said, Golia allowed the lawsuit to proceed, eventually leading to the foreclosure of Shue’s home.

Worse yet, the judge let the case drag out for 10 years, with numerous postponements, in essence milking Sheu of all his resources. At some point, Sheu could no longer afford attorney fees and he had to represent himself.

Clearly, simple discovery— examination of documents by the court- would have proven the fraud in the alleged property sale, but Golia never allowed this fundamental judicial procedure to take place, despite Sheu's numerous appeals, he said.

For 10 grueling years, Sheu said, he was consistently denied the opportunity to present evidentiary documentation proving that the fraud had taken place and that Centex had no right to foreclose on his home.

Sheu's home was first foreclosed on January 28, 2005 and Centex "bought" the property for $1,000 from Amy Cheng, a pseudonymous fraudster involved in the fictitious sale. "How can you buy property from someone who does not exist?” Sheu had asked me, when I first started writing about his case.

Sheu also wrote Centex executive, Gerry King and New York State Chief Administrative Judge --now Chief Judge-- Jonathan Lippman, complaining about Judge Golia's conduct and accusing the judge of “discrimination” and “bias.”

Sheu demanded that Golia recuse himself from the case; the judge refused.

Sheu was persistent, writing to numerous elected public officials and filing an appeal against the foreclosure. Aware that he had notified various elected officials about what he claimed were the "biased" rulings, Sheu said, Judge Golia eventually reversed his own earlier decision and the initial foreclosure was rescinded, records showed.

Still, the judge refused to restore ownership of the property to Sheu.

Golia was so adamant to deprive him of justice, Sheu contended, that he came up with a remarkable decision. Golia now ruled that even though Sheu's home had been illegally sold years earlier, since Centex had already paid off the mortgage, the bank now owned the property under a doctrine known as "Equitable Subrogation."

"How can equitable subrogation apply to stolen property?” Sheu said, in an interview with The Black Star News, referring to the fraudulent sale. "This means if I have a lot of money, like Centex, I can pay off anybody's mortgage anywhere without their permission and then take possession of their home and kick them out?"

Sheu continued to spar with Judge Golia. Finally, early in 2010, his property was foreclosed on again, this time conclusively.

Alleged Intimidation and Retribution against Sheu

As Sheu realized that he could not expect a fair disposition of the case by Golia, he advised the judge that he would expose the judicial charade to the media.

Shortly thereafter, Sheu reported, he was contacted by Jason Garlick, an Assistant District Attorney at the Queens County DA’s office who had prosecuted the fraud case against the people who illegally "sold" Sheu's property. Sheu told me that Garlick urged him not to contact the media. "How could he have known my plans," to contact the media? asked Shue, “Only Judge Golia could have informed him".

Then, Sheu said, on January 14th, 2009, when he emerged from the Queens court house after filing papers in connection with his case, he was met by two detectives from the Queens County District Attorney’s office, he said. According to Sheu, the men “showed their guns and badges”, forced him into an unmarked car and drove him to the DA's office, where they entered through a back door. There, said Sheu, in a locked room, the officers berated, intimidated and threatened him, accusing him of harassing Judge Golia. He claimed one officer pounded on a desk and told him repeatedly that the house he was fighting for didn't belong to him.

Sheu also reported that the Detectives warned that if he went to the press or authorities, "you live in a dangerous neighborhood with gangs, and anything could happen to you". Understandably, Sheu took this as a direct threat against his life.

Sheu says that he was released after two hours, badly shaken and frightened for his life.

When contacted by this newspaper when the series of article about Sheu's case ran beginning in July, 2009, a spokesperson from the Queens DA's office, Kevin Ryan, confirmed that Sheu had indeed been taken by two detectives from the D.A.'s office on the date in question, and that he had been "cooperative and willingly agreed" to accompany them, which Shue denied. Ryan never divulged the names of the detectives and the party who ordered the detention; he also didn't respond to a question about whether Judge Golia had filed a report about Sheu.

This time, Sheu became so concerned for his safety that he contacted FBI agent Rachel Rojas of the New York Bureau, who started monitoring the case, and Sheu also had a personal meeting with Rojas,accompanied by several of his associates.

Sheu followed up the meeting with a letter to Rojas, detailing the threats against his life and asking for witness protection.

In her responding letter, Rojas simply told Sheu to "be careful", an admonition Sheu found to be small comfort. When contacted by this newspaper, while Sheu was still alive, agent Rojas declined to comment; she also did not respond to a phone message from The Black Star News after Sheu's death.

With this tepid response from the FBI, Sheu said he realized that he was basically on his own. Sheu, a man of considerable education and discernment, wondered if Golia’s alleged blatant disregard of law in his own case indicated a more general propensity for alleged corruption. Could he find evidence of other alleged improprieties by Golia?

Sheu Investigates Judge Golia

With this in mind, Sheu set out to investigate the personal financial disclosure filings of the Judge Golia, which are public records, available by request from the Office of Court Administration’s (OCA) Ethics Committee. These filings detail the financial assets of all public officials, as a means of curtailing potential conflicts of interest.

Sheu searched the internet for documentation of Golia’s real estate holdings, hoping to find concealed assets that had not been declared on his financial disclosure form. If he could prove financial impropriety by Golia, Sheu reasoned, perhaps he could get Golia removed from the bench and finally receive a fair hearing for his case from another judge.

Sheu, who was a computer expert, searched the internet for evidence of properties he concluded were owned by Golia. Armed with a list of these properties, Sheu then went to the OCA Ethics Department to obtain Golia’s financial disclosure forms.

According to Sheu, he discovered major discrepancies between Golia’s actual properties and the ones declared on his financial disclosure forms, including a million dollar beach house on Breezy Point on Long Island, which was described in a local magazine as belonging to the judge, and which is publicly listed as being owned by the Golia family.

On November 29, 2009, Sheu alerted Janice Howard, the director of the OCA Ethics Department, of these apparent discrepancies.

Sheu’s complaint included the following allegations, that Judge Golia:

“..Failed to disclose fully his liabilities for 2002/2003/2004/2005/2006/2008, in that he:

- failed to disclose a mortgage held by HSBC under his wife “Roslaie Grecco” against the property

- failed to disclose a mortgage held by HSBC of “Joseph Golia and Rosalie Golia

- failed to disclose “Rosalie Grecco” employment/ income/ property

- failed to disclose “Hampton West” beach House (Breezy Point)

- interest conflict, own Flushing Bank stock (Flushing Financial Corp) and using connections” to get $750,000.000 in lower rate and mortgage more than the property market value, as NYC Dept. of Finance record, 2007 property market about $220,000.00.”

This Newspaper could not get Judge Golia to address these allegations that Sheu submitted to OCA since he declined to be interviewed.

Yet Janice Howard, director of the OCA Ethics Department, did ask for an amended financial disclosure statement from Golia.

By law, the amended disclosure form is the final opportunity for a public official to “come clean” about any errors or omissions on their original disclosure. The amended form is required to be submitted within two weeks of notice, but Sheu had to wait three months to receive the document from the judge.

Golia’s Amended Financial Form

Finally, on June 23rd, 2010, Sheu was personally handed the amended disclosure form by Janice Howard at the Ethics Committee office. Sheu discovered that even the amended disclosure form still neglected to mention the beach house as well any of the other properties Sheu believed were owned by Golia.

The only asset Golia included on the amended disclosure form that had not been cited on the original was a “vacant lot” in Queens that Golia claimed was worth less than $1,000, and therefore did not require reporting.

When Sheu received the amended form at the Ethics Committee office, he was accompanied by two associates, one of whom recorded Sheu’s reaction to reading the amended form. On the recording, Sheu can be heard exclaiming "Now I’ve got him!...I’ve got enough evidence to put Golia in Jail."

Three days later, Sunny Sheu was dead. His associates don't believe it was a coincidence.

Sheu’s futile efforts to protect his life

The most terrifying aspect of Sunny Sheu’s ordeal is that for two years after he was allegedly threatened by the detectives from the Queens D.A.'s office, he could not find a government official or agency willing or able to investigate these alleged threats, or to offer him protection.

Sheu, an optimistic and philosophical man, often compared the United States with his original home in communist China. He told his associates and others that while in China whistleblowers were usually killed or imprisoned, he was certain that in the United States of America those pursuing justice would ultimately prevail.

With this philosophy, Sheu was confident that if his story were known by the press and authorities, no one would dare harm him. That is why he came to The Black Star News, which covered his story in depth.

On numerous occasions, in the presence of colleagues at this newspaper, I urged him to always be accompanied by a friend if he could and to inform associates of his movements. "Even when you go out to the corner store to buy a can of soda, go with a friend," I told him. Still, I optimistically believed that no harm could befall him after this newspaper had publicized his case widely.

After reporting Golia’s alleged ommissions on the financial disclosure forms to the OCA, Sheu attempted with new urgency to alert all appropriate individuals and agencies to his plight.

Among those he contacted directly were: State Senator John Sampson; State Senator Eric Adams; Attorney General Eric Schneiderman; The Senate Judicial Ethics Committee; Presiding Judge Jonathan Lippman; Administrative Judge Anne Pfau; The Office of Court Administration Ethics Committee; The FBI; The Department of Justice; The Queens DA; the NYPD; the CCRB, and; then Governor David Paterson, among others.

Sheu said none of these individuals or agencies lifted a finger to help protect or defend him, or to investigate his allegations.

Finding government agencies and officials maddeningly unresponsive, Sheu again turned to the press. Apart from The Black Star News, no news organization would report or look into his claims of governmental threats against his life. Part two of this series will discuss the details of how some of these media outlets, including a major television station, declined to report the story.

Sheu’s video foretelling his death

It was on April 9, 2010, that Sheu recorded his video statement, which was later posted on YouTube. In the two-minute video, Sheu expresses his fear for his life as a result of his investigation into Judge Golia's personal finances.

"I have filed a complaint to the FBI and the New York State Unified Court Disciplinary Committee about Judge Golia[‘s] [falsification of] his financial disclosure statement," Sheu, who spoke halting English, says.

"And I have submit[ed] evidence to the FBI. Recently [the] FBI returned [to] me cop[ies] of evidence that I sent to the FBI and today, April 9, [the] Unified Court Disciplinary Committee director Janice Howard called and [said] that judge Joseph Golia already amend[ed] his financial disclosure statement, which means my evidence is true."

Sheu’s concluding statement is chilling: "I make this video for my safety….If anything wrong goes to me it should come from Judge Golia and his people [sic].."

Little did he know that he had less than three months to live.

Note: The next installment will include a detailed examination of the circumstances surrounding Sheu's death and The Black Star News' futile attempts to get relevant information from law enforcement including through FOIA

"Speaking Truth To Empower."

"Junk Justice"
LINK

Part One Of A Series

The man has been fighting a foreclosure for nearly 10 years.

Sun-Ming Sheu was eating Chinese noodle soup one day nine years ago when he heard a knock on the door of his Queens house.

When Sheu stepped out, he found an agent from Tower Insurance who told him that he was there to inspect the house for its new owner. "I almost choked on my soup," Sheu recalled in an interview with The Black Star News.

Sheu says he had never sold his house.

Earlier, he had worked with Manhattan-based mortgage brokers to refinance the house, which was under the name of his brother, Ming Chien Hsu. It turns out that the mortgage broker, Yek-Yun Chiu (a.k.a. Roman Chiu) and other accomplices, had forged his brother Hsu's signature on a power of attorney and applied for a mortgage loan with Centex Home Equity.

The forged power of attorney was signed and dated February 11, 2000; Sheu's brother, Hsu, was later able to prove that he was actually in Taiwan on that date and could not have signed the document.

Sheu immediately reported the fraud to the police and obtained a complaint report #7167, on June 19, 2000, from the 109 precinct, in Queens. Sheu also reported the matter to the Queens County District Attorney's office and to the Manhattan D.A., since the fraudsters worked in Manhattan.

On June 19, 2000, Sheu faxed a copy of the police complaint he had filed, to Ed Folland, a Centex official, and B. Osterman, director of collection, at Centex, alerting them to the fraud. Sheu also spoke with both officials by phone. “Folland said he would investigate,” Sheu said.

Sheu also faxed a copy of the police complaint on the same date to Old Republic National Title Insurance Company, which provided title insurance for the May 23, 2000 closing. He also reported the fraudulent mortgage loan to Midwest Finance, which was the agent for Chase Bank of Texas, the original mortgage lender to his brother, Hsu.

Sheu said he warned Centex to recover its money, since the mortgage had been fraudulently obtained. He said he was confident things would soon be resolved once Old Republic issued him with a claim #43391, after he had written a letter to the New York Department of Insurance, complaining about the fraudulent conveyance.

The letter from Old Republic with the claim number, reviewed by The Black Star, is dated October 5, 2004, and was signed by Felice K. Shapiro, then Vice President, New York State Counsel. The claim was assigned to Timothy McLeron, then the New York State Claims counsel for Old Republic.

Rather than deal with his claim, Sheu says, Centex and Old Republic decided to pretend as if the May 23, 2000 closing was not fraudulent, even though he provided both companies with documentation.

Instead, Centex later filed a lawsuit to foreclose on the property, Sheu says. “It was like a thief suing the victim. They conspired to steal my property," Sheu claims.

Nine years later, Sheu has been foreclosed on his property by Old Republic, which substituted for Centex as plaintiff, in 2008.

Separately, officials at both Centex and Old Republic did not return phone calls and e-mail messages from The Black Star seeking comment.

A lawyer for Old Republic, Matthew Dollinger, did not respond to an e-mail message with detailed questions. A spokesman for the New York State Department of Insurance did not return a phone message and e-mail message by publication time. Similarly, a spokesman for the New York State Attorney General did not respond by publication time.

At the fraudulent closing, on May 23, 2000, two associates of the broker, Yek-Yun Chiu, participated in the scam, Sheu says. Amy Cheng, whose real name is Jin Rong Wang, acted as the “buyer” of the property. She carried multiple identifications, and used the fake one, "Amy Cheng" for the closing. Her boyfriend Jing Gao, acted as the “seller.”

The pair was later busted by police and pleaded guilty on forgery charges.

Jin Rong Wang, the supposed buyer, did not even make the required $30,000 down payment on the property, Sheu says. Yet the deal was okayed by Centex’s lawyer, Brooklyn-based attorney Jakov J. Bohensky, Sheu says.

Bohensky’s name appears on the federally-required HUD-1 document certifying that the $30,000 downpayment was made; although his signature is not on the form.

The Black Star News has also reviewed photocopies of what purports to be checks made out by Bohensky in connection with the transaction. One check, purportedly made out to Ming Chien Hsu, Sheu’s brother, is for $4,112.60; Sheu says it was also a fake check since his brother was not selling the property, and, in any case, was not even in the country and never received the check.

Another check, purportedly for $1,000 was to Jeffrey Ruan, who was supposed to have been Jing Gao’s, the “seller’s” lawyer.

A copy of what purports to be a money order for $1,000, one of several payments towards the purchase of the house, made out to Sheu’s brother, Hsu, by Amy Cheng, is drawn from Abacus Federal Savings Bank, in Chinatown. Canal Street is mispelled “Cannal Street.”

In an interview Ruan told The Black Star News that when Sheu later told him about the forgery, he wrote to Old Republic urging that the company not transfer the title pending resolution of the alleged forgery.

"What I cannot understand is how Centex's lawyer at the closing went along with this scam," Sheu says, in the interview. “He must have known it was fraudulent as the detectives said.”

Bohensky did not return a phone message from The Black Star News seeking comment.

The Black Star News spoke with one of the New York Police detectives who looked into Sheu's allegations in 2000. He said he was able to confirm that it was a forged power of attorney and that Sheu's brother, Hsu, was not in the country and could not have signed it in front of the notary public. He said bank records also showed that some purported deposits were actually never made.

Sheu also blames Midwest Finance, the agent for Chase Bank of Texas, his brother's mortgage holder, for not returning the money to Centex after he notified the company of the 2000 forgery. Contacted by The Black Star News, a Midwest official confirmed that Sheu's mortgage had been paid off; he wouldn't provide additional information.

Even after the May 23, 2000 fraudulent “closing” Sheu says, he wasn't too worried initially because he believed once he had reported the fraud to police and the DA, things would eventually be sorted out.

"It was the court system that later betrayed me," says the immigrant from Taiwan." Is this the American way?"

Acting as if the May 23, 2000 closing had been authentic, on January 10, 2001, Centex’s title insurer, Old Republic, recorded the property's deed and mortgage with the New York City Register, in Queens County. Old Republic listed Sheu’s brother, Ming Chien Hsu, as the first “party” and Jing Gao, the phony "seller" at the May 23, 2000 "closing" as the second “party.”

"This was knowingly criminal," Sheu claims.

Then on December 12, 2001, Centex filed a lawsuit against Sheu and his brother Hsu in State Supreme Court, in Queens County, seeking a default judgment on the property, arguing that Amy Cheng was not making payment on the mortgage, even though Cheng was the fictitious name of the buyer at the fraudulent May 23, 2000 closing.

So, in addition to Sheu and Hsu, Centex listed as co-defendants, the very individuals that had victimized the brothers: Jin Rong Wang (a.k.a. Amy Cheng); her boyfriend Jing Gao; and the broker who presided over the fraudulent May 23, 2000 "closing," Yek-Yun Chiu. Non of the fraudsters ever appeared in court.

The case was assigned to Justice Joseph Golia in State Supreme Court in Queens.

"My nightmare was just beginning," Sheu now recalls. “It was like the thief suing the victim of the crime.”
Sheu says had Judge Golia granted him due process, including disclosure, he would have quickly exposed the fraud perpetrated against him and had the case would have been thrown out.

Instead, Judge Golia granted summary judgment in favor of Centex and foreclosed on the property on July 21, 2004, records show.

Sheu continued to complain to Centex. A September 23, 2004 letter to Sheu's brother, Hsu, by Gerry King, a customer relations officer at the company acknowledges receiving “numerous faxed letters and copies of various documents” from Sheu but adds that “it was the decision of the court that insufficient evidence to prove fraud was provided and the Supreme Court of the State of New York issued a judgment of foreclosure...”

“There was no deposition; no discovery; so how could I present evidence to show fraud?” Sheu says, in the interview with The Black Star.

Sheu says even though Centex knew its May 23, 2000 originated mortgage was fraudulent, it was now using the Court system to legitimize the transaction.

The foreclosure sale was on January 28, 2005. “Centex bought the property for $1,000 from Amy Cheng, the fraudster,” Sheu says. “That was not even her real name. How can you buy property from someone who does not exist?”

A week after Centex “bought” the property, on February 2, 2005, both Jin Rong Wang (a.k.a. Amy Cheng) and Jing Gao, who had never appeared in court on the Centex case, were arrested based on the criminal forgery complaint filed by Sheu in 2000.

Sheu sent a fax to Centex’s Gerry King about the development and also informed Judge Golia. Sheu says he was appalled so he also wrote a letter to New York State Chief Administrative Judge, Jonathan Lippman, complaining about how his brother's property had been "stolen." He accused Golia of “bias” and “discrimination.”

Sheu says on February 3, 2005, Jason Garlick, an Assistant District Attorney at the Queens County DA’s office, who had prosecuted Jin Rong Wang (a.k.a Amy Cheng) and Jing Gao, called him and asked him not to contact media about his case. “Judge Golia must have called the DA’s office because I told him I was going to media,” Sheu says.

Judge Golia ordered a hearing for April, which was later moved to May 18 and 19, 2005.

The order was signed by Judge Golia on March 17, 2005 and stamped with the Queens county clerk’s seal on March 23, 2005. Sheu says when he’d last checked court records on March 24, 2005, there was no such entry or copy of such an order.

In fact, Sheu says, the only order he found in the records at the time, signed by Judge Golia on March 17, 2005, and stamped with the Queens county clerk’s seal on March 23, 2005, was a denial of Sheu’s and his brother, Hsu’s motion for Judge Golia to recuse himself.

After the May hearing, it was not until nearly a year later, on April 12, 2006, that Judge Golia returned with a ruling on the case.

Judge Golia again denied the defendants’ motion that he recuse himself; the judge cancelled the fraudulent deed of May 23, 2000 between Ming Chien Hsu and Jin Rong Wang (a.k.a Amy Cheng); he cancelled the foreclosure order filed on July 21, 2004; and, he cancelled and vacated the foreclosure sale of January 28, 2005.

Judge Golia, however, did not restore Ming Chien Hsu’s (Sheu’s brother) original 15-years $226,500 mortgage with SMI Mortgage (SMI had later assigned the mortgage to Chase Bank of Texas).

"This violated my right as a crime victim to be restored to original status," Sheu says, reading from papers he had pulled from research.

That wasn’t all.

Judge Golia awarded Summary Judgment in favor of Centex to foreclose an equitable mortgage, under the doctrine of Equitable Subrogation against the premises: he ruled that Centex had paid off the original mortgage.

"How can equitable subrogation apply to stolen property?” Sheu asks. "This means if I have a lot of money, like Centex, I can pay off anybody's mortgage anywhere without their permission and then take possession of their home and kick them out," Sheu noted, sarcastically.

Judge Golia did not return phone calls seeking comment and also didn’t respond to an e-mail message. In a phone interview, Mitchell Kaufman, Judge Golia’s law secretary claimed Sheu’s information about the fraud would not have made a difference in the case “if Centex did not know at the time” of the May 23, 2000 closing that it was based on the forged power of attorney. “Apparently Mr. Sheu is either unwilling or unable to accept the judgment of equitable subrogation.”

Sheu retorts: “Centex knew it was a fraudulent transaction. It was represented by an attorney—Bohensky and the fraudulent transaction was endorsed by Joseph Bigman, Old Republic's title agent. In any case Old Republic issued me a claim number and they still did nothing except to foreclose.”

Asked what if Centex did know, or came to know that the May 23, 2000 closing was fraudulent Kaufman said, of Sheu: “He may have a tort claim against Centex.”

Judge Golia appointed Martin Evans as referee charged with computing the amount owed to Centex by Sheu. Evans entered a judgment amount of $465,433.29 in favor of Centex.

Golia also ruled that Centex could move for a judgment of foreclosure and sale, with costs, disbursements and any additional allowance as allowed by law.

Separately, Dollinger, Gonski & Grossman, the law firm representing Centex (now representing Old Republic, since it substituted as the plaintiff), managed to get a satisfaction of mortgage document from Chase Bank of Texas, even though the mortgage was in the name of Mr. Sheu’s brother, Hsu.

Sheu said when he called Midwest, Craig K. Olson, a Vice President, told him that a lawyer from Dollinger had informed Midwest that the firm represented Sheu and his brother, Hsu.

Judge Golia issued a judgment of foreclosure sale on April 7, 2009. The foreclosure sale occurred on May 15, 2009.

On May 27, Sheu appeared before Judge Golia with Stephen Katz, an attorney, and Judge Golia denied Sheu’s motion to vacate the order for foreclosure and sale.

In his motion, Sheu said Old Republic was foreclosing on a loan “obtained by fraud and by forgery of a power of attorney,” to which Judge Golia wrote: “This assertion is intentionally misleading and disingenuous at best.”

"It is the truth," Sheu says. "It is nothing but the whole truth."

In the almost decade he's been fighting for the property, Sheu has learned a few things about the law. He pulls out information he’s researched and reads, "Part 100 of the Rules of the Chief Administrator of the Courts Governing Judicial conduct. Section 100.3. Disqualification. A judge shall disqualify himself or herself in a proceeding in which the judge's impartiality might reasonably be questioned, including but not limited to instances where the judge has a personal bias or prejudice concerning a party or the judge has personal knowledge of disputed evidentiary facts concerning the proceeding."

In June 2009, Sheu met twice with a criminal investigator at the U.S. Attorney’s Office in the Southern District for a total of about four hours and discussed his case and submitted documentation. “We cannot confirm or deny that we are investigating this case,” the investigator told The Black Star News, when contacted by phone.

"These seem to be issues for the Appellate Division as I am not in position, nor am I qualified, to say whether or not a Judge's

decision was 'proper' or not nor am in a position to say what rule of law should have been used to decide a particular case," David Bookstaver, Communications Director for the New York State Unified Court System Office of Court Administration told The Black Star News.

Desperate, on June 23, 2009, Sheu again filed an order to show cause for a temporary restraining order to halt any further action even though the sale had already occurred.

He demanded that detectives Keith Ng and Kin Lee, now both retired, who both had investigated the fraudulent May 23, 2000 closing, be permitted to testify.

Judge Bernice D. Siegal, stayed any additional proceedings with respect to sale of the property, with a return hearing date of July 8, 2009.

At the July 8, hearing, Judge Golia set another hearing date for July 15, 2009, at which time Sheu was to produce cancelled checks for all payments he had made over the last nine years on the property, for taxes; insurance payments; and, utilities.

This reporter attended the July 15, 2009, hearing and observed the clearly acrimonious relationship between Judge Golia and Sheu. The Judge Golia kept shouting at Sheu, who was unable to produce receipts; Sheu on the other hand kept shouting at the judge about the May 23, 2000 fraudulent conveyance he insisted was at the root of his predicament.

“This is junk justice,” Sheu said, as he walked out of the court. "Nobody is above the law, except Judge Golia."

The Manhattan Democratic Judge Selection Club

Thanks to Mr. Frank Lombardi of the Daily News, we have a peek inside the corruption of the Courts by the Manhattan Democratic Clubhouse.

In January 2007 I started working for Hank Sheinkopf in order to find out more on the controlled process of approving judges for the NYC Courts (he ran the campaign of NYC Surrogate Renee Roth, Nora Anderson, etc., all named in my case filed in District Court, Without a Prayer For Relief and RICO, and he told me that he would get Ray kelly to arrest me if I told anyone about what I knew). More about that in my book. The point I want to make here is that the courts are under the supervision of a relatively small group of political lobbyists who make sure that their "interests" are protected by the judges whom they approve. As can be seen in the following article, Death of the Duopoly, the Democratic Clubmembers may not be in sync right now with public sentiment. Of course, this is of no concern to them, but maybe we, the public, should be outraged, and obtain the help of our Attorney General....if he is interested.

BTW, Lombardi is incorrect about Geoffrey Wright - he is a Judge in New York State Supreme Court Manhattan, 80 Center Street, City Part (working for the City of New York).

Betsy Combier

Erika McDaniel Edwards, esq.

Are these two Harlem lawyers now Civil Court judges-in-making?

BY Frank Lombardi, DAILY NEWS UPTOWN COLUMNIST, Thursday, June 23rd 2011, 4:00 AM
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Civil Court judges are supposedly elected, but more accurately they're usually "made" by political clubhouse leaders and loyalists.

Two lawyers from Harlem are on the fast track to being elected Civil Court judges later this year because they've been endorsed by various Democratic district leaders and county chairman, Harlem Assemblyman Keith Wright.

The two judges-in-making are Erika McDaniel Edwards, a civil and criminal attorney seeking a vacant countywide Civil Court seat, and W. FrancPerry 3rd, (see also Community Board 10) a court attorney for Judge Peter Moulton, the supervising judge of Manhattan Civil Court, who is running for the District 5 seat on the upper West Side.

Both were approved by screening panels used by Manhattan Democrats, which include representatives of bar groups and nonprofit organizations.

Manhattan Democrats, in fairness, do try to endorse qualified candidates and place emphasis on diversity. For Wright, who is African-American, Perry and Edwards are the first African-American judicial prospects he's helped through the politically charged process since he became county leader in September 2009.

Wright's brother, Geoffrey, is a state Supreme Court justice in the Bronx, and their father was the late Bruce Wright, a judge who served in both the Criminal Court and state Supreme Court.

Edwards' recent clients have included financier James Nicholson, who pled guilty in 2009 to a $140 million Ponzi scheme and is serving a 40-year prison sentence.

She was an assistant Manhattan district attorney before launching her own law firm in 1998 from a Harlem brownstone, and is now a partner with Donaldson, Chilliest & McDaniel.

Perry is on leave as chairman of Community Board 10 (Central Harlem). He is also a minister in the Metropolitan Community Church, a Protestant denomination.

"Occasionally I perform a wedding, or preach somewhere," he noted.

If elected, he said he would give up his community board post and his occasional ministry.

"We all bring a lot of different things to the bench," he noted of his decision to take a sabbatical from the law in 2001 to get a master of divinity degree from Union Theological Seminary.

Perry, who is gay, said he and his partner have two adopted children, and "the skills going into being a good parent" will give him "a greater perspective than anything else" if he becomes a judge.

Potential challengers still have until July 14 to file qualifying petitions to force a primary contest Sept. 13. But there's no indication that will happen, so they're expected to be unopposed on the Nov. 8 ballot.

Judges of the Civil Court - known as the "People's Court" - handle civil cases involving up to $25,000. They're elected for 10-year terms, at a salary of $125,600, which hasn't been raised since 1999.

Competitive races for judgeships are rare, in Manhattan as well as elsewhere in the city, because it's so difficult for hopefuls without clubhouse backing to collect the thousands of voter signatures needed to qualify for the ballot, and because it costs a bundle to wage an insurgent campaign.

Only one contested Civil Court race is shaping up this year in Manhattan, for a vacancy from District 3 (Chelsea). The two contenders gathering signatures to force a primary duel are Tony Cannataro, who has the endorsement of every club in the district and a bevy of Manhattan elected officials, and Housing Court Judge Sabrina Kraus.

The cost of waging a Civil Court race in Manhattan can range from $100,000 for a district level contest to $200,000 for a countywide race, according to James McManus, the longtime district leader from Hell's Kitchen (now tamely called Chelsea).

Three years ago, the last contested Civil Court race for a Manhattan countywide seat ended up costing its two contenders a combined $227,387, according to spending reports.

An insurgent, Nancy Bannon, won that year over her clubhouse-endorsed rival, Michael Katz, although he outspent her 2-to-1. So beating the clubhouse gang isn't entirely impossible, just improbable.

flombardi@nydailynews.com

Uptown politics: Harlem Assemblyman Keith Wright sits in judgment on racial balance of judges

BY FRANK LOMBARDI, DAILY NEWS STAFF WRITER, Thursday, February 17, 2011
LINK

Harlem Assemblyman Keith Wright has "made" more than a dozen judges since becoming the Manhattan Democratic chairman 17 months ago.

But none of the new judges is African-American.

"We've chosen judges who are gay, Asian judges. We even have a Dominican judge - but we haven't done any black judge yet," said Wright.

It's not that he's unsympathetic to the need for diversity among New York judges. As of the latest count by the state court system, of 1,166 sitting full-time judges, 947 are white (81%); 121 are black (10%); 67 are Hispanic (6%) and 20 are Asian (2%).
Manhattan Democrats head Keith Wright describes judge-picking procedure.

Uptown politics: Harlem Assemblyman Keith Wright sits in judgment on racial balance of judges
BY FRANK LOMBARDI, DAILY NEWS STAFF WRITER, Thursday, February 17, 2011
LINK

Harlem Assemblyman Keith Wright has "made" more than a dozen judges since becoming the Manhattan Democratic chairman 17 months ago.

But none of the new judges is African-American.

"We've chosen judges who are gay, Asian judges. We even have a Dominican judge - but we haven't done any black judge yet," said Wright.

It's not that he's unsympathetic to the need for diversity among New York judges. As of the latest count by the state court system, of 1,166 sitting full-time judges, 947 are white (81%); 121 are black (10%); 67 are Hispanic (6%) and 20 are Asian (2%).

"It's just the way it turned out," said Wright. "But you know what? You can look at me and tell that will probably change at one point."

Wright, 56, who is African-American, is the son of the late Bruce Wright, a controversial city judge who was denounced by critics in his day as "Turn 'Em Loose Bruce" because of his low-bail policies.

As his son tells it, Bruce Wright might never have become a Manhattan judge - or remained one for 25 years - if the Harlem political powers back then had not gone to bat for him.

His father was named to the Criminal Court in 1970 by then-Mayor John Lindsay. But it was Harlem's own Percy Sutton who engineered the appointment, Keith Wright said. Sutton, who died in 2009 at age 89, was Manhattan borough president from 1966-77 and a longtime Harlem political power.

"My father was Percy's lawyer," a smiling Wright said in explaining how his rebel-lawyer father became a judge.

And, he continued, it was thanks to his predecessor as county leader, Assemblyman Herman (Denny) Farrell, that Bruce Wright was nominated to the state Supreme Court in 1978, when then-Mayor Ed Koch didn't renew his Criminal Court judgeship. Judge Wright retired in 1994 and died in 2005 at age 86.

Several well-placed Manhattan Democrats said Keith Wright ran into party resistance last year when he pushed for a black judicial nominee.

Other factions of the notoriously splintered Manhattan Democratic Party argued that "plenty" of black judges had been named during Farrell's 28-year party reign and forced Wright to bide his time.

Making Civil Court and Supreme Court judges is one of the few remaining powers of the city's Democratic bosses. Even the U.S. Supreme Court upheld that boss-ruled process in 2008.

But while Wright is a linear descendent of the bosses of the old Tammany Hall machine, he has inherited a largely rusted, powerless antique.

"I wouldn't say that at all," Wright said. "I think we do [have clout] and it's growing. That's why we still have candidates [for all offices] rushing to us, looking for our endorsement."

As for naming judges, he added, Manhattan has a more progressive and fair screening and nominating process than the other boroughs.

"We take recommendations [of the panels] as if they were coming down from the Sermon on the Mount," Wright said.

That may be, but anyone who doesn't get nominated by the party structure still has no prayer of forcing a party primary and getting elected, given the prevailing rules.

It helps to have a Percy Sutton plugging for you, or a Keith Wright, as we might see this year.

flombardi@nydailynews.com

Death of The Duopoly

Democrats and Republicans are at risk of becoming irrelevant, says Reason.com's Nick Gillespie, as more voters identify as Independents or with other groups like the Tea Party. He talks with WSJDN's Kelsey Hubbard about the shortcomings of the longstanding duopoly in American politics

THE SATURDAY ESSAY
Wall Street JUNE 18, 2011
LINK

Death of the Duopoly

Being binary is bad for business, so when will politics cure its bipolar disorder? Nick Gillespie and Matt Welch on the lessons Washington should learn from the real world.

By NICK GILLESPIE and MATT WELCH
 
Nothing in American life today seems as archaic, ubiquitous and immovable as the Republican and Democratic parties.


The two 19th-century political groupings divide up the spoils of a combined $6.4 trillion that is extracted each year from taxpayers at the federal, state, county and municipal levels. Though rhetorically and theoretically at odds with one another, the two parties have managed to create a mostly unbroken set of policies and governance structures that benefit well-connected groups at the expense of the individual.

Americans have watched, with a growing sense of alarm and alienation, as first a Republican administration and then its Democratic successor have flouted public opinion by bailing out banks, nationalizing the auto industry, expanding war in Central Asia, throwing yet more good money after bad to keep housing prices artificially high, and prosecuting a drug war that no one outside the federal government pretends is comprehensible, let alone winnable. It is easy to look upon this well-worn rut of political affairs and despair.

Journal Community

And Americans are, in increasing numbers. Perhaps the most important long-term trend in U.S. politics is the four-decade leak in market share by the country's two dominant parties. In 1970, the Harris Poll asked Americans, "Regardless of how you may vote, what do you usually consider yourself—a Republican, a Democrat, an independent or some other party?"

Fully 49% of respondents chose Democrat, and 31% called themselves Republicans. Those figures are now 35% for Democrats and 28% for Republicans. While the numbers have fluctuated over the years, the only real growth market in politics is voters who decline affiliation, with independents increasing from 20% of respondents to 28%.

These findings are consistent with other surveys. In January, Gallup reported that the Democrats were near their lowest point in 22 years (31%), while the GOP remained stuck below the one-third mark at 29%. The affiliation with the highest marks? Independent, at 38% and growing. In a survey released in May, the Pew Research Center found that the percentage of independents rose from 29% in 2000 to 37% in 2011.

POLITICS2

It is generally taken for granted that the Democrats and Republicans will always be around. But that may just be the influence of what cognitive scientists call "existence bias"—the pervasive idea that the status quo is stable and ongoing. What if the same factors that have given our incumbent parties an advantage also threaten to hasten their demise?

Economists have a particular fondness for studying what Democrats and Republicans have become: the longest-lived duopoly in American history. The Nobel Prize-winning economist John Forbes Nash (the subject of the book and movie "A Beautiful Mind") was all about duopolies. He showed that two powerful competitors frequently end up locked in a stable, mutually beneficial dance of tit-for-tat—they collude, in short, to carve up a captive market.

Economists have paid less attention to the chief vulnerability of duopolies: How collusion against the interests of customers produces an inevitable revolt, sweeping one or both dominant players into the dustbin of history.

In a widely circulated 2009 paper surveying the economic literature on the topic, the late Larry F. Darby presented a list of classic duopolies, including such familiar pairings as MCI and AT&T, and Macy's and Gimbels. Tellingly, several of the players no longer existed: MCI (then known as WorldCom) became history's largest bankruptcy in 2003; Gimbels was the country's dominant department store chain in the 1930s but went out of business in 1987.

There is nothing inherently stable about two organizations dominating a particular market in the hurly-burly of modern American life. In fact, there are many reasons to suspect that such arrangements are unstable—particularly when technology allows captive consumers to flee.

It is worth taking a closer look at one case on Mr. Darby's list: Kodak and Fujifilm. For much of the 20th century, Kodak was synonymous with color photography. Memories captured on film were "Kodak moments," and the Dow Jones Industrial Average listed the company for more than seven decades. At one point it enjoyed an amazing 96% share of the U.S. market for film. Such was its dominance that the federal government sued Kodak for antitrust violations not once but twice, producing out-of-court settlements in 1921 and 1954.

Fujifilm began competing with Kodak globally in the 1970s and seriously in the U.S. after the 1984 Olympics. Though always the junior partner on Kodak's home turf, the conglomerate held its own enough that the duopoly soon attracted academic studies. Their underlying assumption was that the duopoly would be stable for the foreseeable future.

But the studies were wrong. The share price of Eastman Kodak tumbled from $60 in 2000 to below the $4 mark by 2011.

What happened? Like many duopolies, Kodak and Fujifilm treated their customers like captives, forcing them to pay for pictures they didn't want and steering them toward ever-pricier analog products. This worked as long as consumers had nowhere else to turn. But digital technology, as we know, changed all that, giving customers not just a Kodak/Fuji-free workaround, but the power to make, delete, alter and otherwise control their own creative product.

Or consider the American craft-beer revolution, which people who went to college in the 1980s or before can testify is almost impossible to believe. As in politics, a duopoly—Anheuser-Busch InBev and MillerCoors—soaks up the vast majority (around 80%) of market share. But now the legacy giants are steadily leaking market share and buzz, while upstart craft-beer makers are cashing in on the only sector of the industry showing consistent growth.

Netscape or Internet Explorer, Crest or Colgate, stuffing or potatoes: When given real choice, especially the choice to go elsewhere, consumers will drop even the most beloved of brands for options that enhance their experience and increase their autonomy. We have all witnessed and participated in this revolutionary transfer of loyalty away from those who tell us what we should buy or think and toward those who give us tools to think and act for ourselves. No corner of the economy, of cultural life, or even of our personal lives hasn't felt the gale-force winds of this change.

Except government.

Think of any customer experience that has made you wince or kick the cat. What jumps to mind? Waiting in multiple lines at the Department of Motor Vehicles. Observing the bureaucratic sloth and lowest-common-denominator performance of public schools, especially in big cities. Getting ritually humiliated going through airport security. Trying desperately to understand your doctor bills. Navigating the permit process at city hall.

Whatever examples you come up with, chances are good that the culprit is either a direct government monopoly (as in the providers of K–12 education) or a heavily regulated industry or utility where the government is the largest player (as in health care).

Unlike government, Kodak doesn't have a guaranteed revenue stream. If consumers abandon its products, sales will be zero, and the company will disappear. The history of private-sector market dominance is filled with such seemingly sudden disappearing acts: Big-box music retailers and bookstores were supposed to bestride the land like colossi at the turn of our new century, but Virgin megastores have all but disappeared, and Borders has just gone bankrupt.

A more efficient system is on the doorstep of our most stubborn, foot-dragging sector: government.

There is a positive correlation between an organization's former dominance and its present-day inability to cope with change. As the technology business consultant Nilofer Merchant has aptly put it, "The Web turns old industries on their head. Industries that have had monopolies or highly profitable duopolies are the ones most likely to be completely gutted when a more powerful, more efficient system comes along."

Fortunately, a more efficient system is finally on the doorstep of America's most stubborn, foot-dragging, reactionary sector—government at the local, state and especially federal levels—and its officially authorized, customer-hating agents, the Democrats and Republicans.

As the number of independents rises, voters who are free from party affiliations are more inclined to view political claims with due skepticism. By refusing to confer legitimacy on the two accepted forms of political organization and discourse, they hint strongly that another form is gathering to take their place.

Something potentially revolutionary is afoot in our politics. The Bush-Obama era of bailout economics and perennially deferred pain has produced a political backlash. When blue-state California was allowed in May 2009 to pass judgment on a multipart budget-fix referendum that had received nearly unanimous support from the state's politicians and interest groups, the measures lost by an average of 30 percentage points, despite opponents having been vastly outspent.

Eight months later, unknown Republican Scott Brown won Teddy Kennedy's old Senate seat in overwhelmingly Democratic Massachusetts. Congressmen mostly canceled their traditional August town hall meetings in 2010 after getting too many earfuls in 2009.

For the first time in recent memory, participants in the political process, many of them newly engaged, are openly imagining and pushing for a world other than the one they currently live in. Voters are seizing control over the means of production, meeting up with strange new subgroups, and having a blast in the process. The future—even the present—belongs not to the central re-election committee but to the decentralized single-issue swarm. Wherever both parties have colluded in erecting a roadblock to the desires of American voters, there are citizen groups creating angry and effective coalitions to confront the status quo.

The decentralized and effectively leaderless Tea Party is the most potent example of this permanent non-governing minority. The movement has focused like a laser beam on what all but a few Washington politicians won't dare to touch: actually cutting spending and debt. Whether the group will be able to maintain its emphasis on stanching the nation's flow of red ink while avoiding divisive social issues is an open question. But there's no denying that the Tea Party's biggest impact has come by backing challengers to entrenched Republican candidates.

A similar phenomenon is visible in rising opposition to the drug war. Last fall, people from the far right, the far left and everywhere in between banded together in California to push an outright marijuana-legalization law. The initiative, derided as crazy by California's political class, pulled an impressive 46.5% of the vote.

And in the school-choice movement, politicians such as New Jersey's Republican Gov. Chris Christie and Newark's Democratic Mayor Corey Booker may agree on nothing else but ending the public school monopoly on K-12 education.

Such new configurations do not mean that the Democrats and Republicans will disappear anytime soon. Unlike Kodak and Fujifilm, they have a guaranteed revenue stream, and they get to write their own rules for survival. But the demonstrated ability of disgruntled voters to create whole new ways of doing things has made our political duopolists less secure and complacent.

At a time when governments at every level have run out of money, the smart politicians will figure out how to unbundle policy options and speed up the sort of innovation that has made most areas of our lives better than they were 40 years ago.

And the dumb politicians? They'll go the way of Kodak.

—Adapted from "The Declaration of Independents: How Libertarian Politics Can Fix What's Wrong with America" by Nick Gillespie and Matt Welch, to be published by PublicAffairs on June 28. Copyright © by Nick Gillespie and Matt Welch.