2/22. The Securities and Exchange Commission (SEC) announced that it settled with the four remaining individual defendants in SEC v. KPMG, et al.

The SEC filed its original complaint in the U.S. District Court (SDNY) on January 29, 2003, alleging securities fraud in connection with the defendants' auditing of Xerox's accounting from 1997 through 2000. See also, story titled "SEC Files Complaint Against KPMG and Partners Re Xerox Audits" in TLJ Daily E-Mail Alert No. 594, January 30, 2003.

The SEC stated in one release that "Three partners agreed to permanent injunctions, payment of record civil penalties and suspensions from practice before the Commission with rights to reapply in from one to three years. The fourth partner agreed to be censured by the Commission."

The SEC added that "The defendants whose settlements were announced today are Ronald Safran, the KPMG engagement partner on the Xerox audit for 1998 and 1999; Michael Conway, the senior engagement partner on the Xerox audit for 2000; Anthony Dolanski, the engagement partner on the Xerox audit for 1997; and Thomas Yoho, the SEC concurring review partner for KPMG on the Xerox engagement from 1997-2000. Safran, Conway and Dolanski each consented to the entry of final judgments against them by the U.S. District Court for the Southern District of New York. Yoho agreed to the entry of a Commission order imposing a censure pursuant to Rule 102(e) of the SEC's Rules of Practice. Each defendant entered into his settlement without admitting or denying the SEC's allegations or findings."

See also, second SEC release. This case is SEC v. KPMG, LLC, et al., U.S. District Court (SDNY), D.C. No. 03 CV 0671 (DLC), Judge Denise Cote presiding.

The SEC also filed separate lawsuits against Xerox and former Xerox officers. See, story titled "SEC Sues Xerox for Financial Fraud" in TLJ Daily E-Mail Alert No. 409, April 12, 2002, and story titled "SEC Files Civil Fraud Complaint Against Former Xerox Officers" in TLJ Daily E-Mail Alert No. 676, June 9, 2003.

2/21. The Electronic Privacy Information Center (EPIC) sent a letter to the ethics committees of the state bar associations urging them to take action to ensure that licensed attorneys do not engage in, or pay others to engage in, pretexting to acquire consumers' confidential phone records or other private information.

The EPIC wrote that "In the course of investigating pretexting, it has become increasingly clear that attorneys are major consumers of pretexting services."

The EPIC letter requests "that appropriate action be taken to ensure that attorneys in your state are not employing investigators or other companies to engage in pretexting or other fraud. We believe that pretexting is incompatible with ABA Model Rules 1.2, 3.4, 4.1, 4.4, and 8.4."

The letter adds that "issuing an advisory opinion or highlighting this issue in communications to members of the Bar may be appropriate action to addressing use of pretexting".

The EPIC letter was signed by Chris Hoofnagle.

	Photo by Declan McCullagh

Hoofnagle (at right) also filed the petition for a rulemaking with the Federal Communications Commission (FCC) that caused the FCC to adopt, on February 10, 2006, its Notice of Proposed Rulemaking (NPRM) regarding the practice of pretexting to obtain consumers' confidential phone records.

This NPRM is FCC 06-10 in Docket No. 96-115 and RM-11277. See, text [34 pages in PDF] of the FCC's NPRM. See also, story titled "FCC Adopts NPRM Regarding Privacy of Consumer Phone Records" in TLJ Daily E-Mail Alert No. 1,308, February 13, 2006, and story titled "FCC Rulemaking Proceeding on CPNI May Extend to Internet Protocol Services" in TLJ Daily E-Mail Alert No. 1,310, February 15, 2006.

The EPIC letter does not enumerate attorneys or law firms that purchase confidential phone records, or other confidential information, that has been acquired through the practice of pretexting. However, the EPIC has previously identified web based businesses that sell the confidential information.

The House Commerce Committee, in its letters of February 15, 2006, to thirteen web based data brokers, requested that they disclose their top twenty customers, by annual revenue, for every year since 2000. If the HCC obtains and makes public the responses that it receives to these or other requests, subpoenas, or testimony, then this would provide the EPIC and others with the names of attorneys and law firms against whom they could file ethics complaints with the various state bar associations.

See also, story titled "House Commerce Committee Seeks Information from Phone Data Brokers" in TLJ Daily E-Mail Alert No. 1,312, February 17, 2006.

In addition, some of the pending legislative proposals would not only ban pretexting to obtain confidential phone records, but would also ban purchasing this data, knowing how it was obtained.

For example, HR 4709, the "Law Enforcement and Phone Privacy Protection Act of 2006", which is the House Judiciary Committee (HJC) bill, provides that "any person who purchases confidential phone records information of a covered entity, knowing such information was obtained fraudulently or without prior authorization from the customer to whom such confidential records information relates, shall be fined under this title, imprisoned not more than 5 years, or both".

The violation of a federal criminal statute itself can serve as the basis for attorney disbarment or other discipline.

See also, story titled "Rep. Smith Introduces Bill to Criminalize Pretexting to Obtain Consumer Phone or VOIP Records" in TLJ Daily E-Mail Alert No. 1,308, February 13, 2006.

2/22. Robert Portman, head of the Office of the U.S. Trade Representative (USTR), and Peter Mandelson, the EU Trade Commissioner, held a joint news conference in Washington DC. See, transcript [9 pages in PDF].

Portman stated, among other things, that "in services the United States has consistently advocated the biggest possible package of service openings including in such key areas as financial services, telecommunications, computer related services, and express delivery".

He also said that "On a variety of issues outside of Doha we have common and ongoing interests and the potential for collaboration with the European Union. Examples include protection of intellectual property, regulatory cooperation, and other bilateral issues."

Mandelson (at right) was asked, "Did you talk about China with Mr Portman? Will EU take any action with the United States against China on China issues such as IPR and auto parts?"

He responded that "We did touch on China. Partly because we have some shared concerns about some market access issues in China and WTO compliance issues which affect both our business communities and so we discussed those. We also touched on the wider issue of IPR enforcement. Not just in relation to China but as a wider issue which is a very great concern to us indeed. I would put it amongst the top two or three priorities in our work together. We discussed it last year at the US-EU Summit where President Bush put it very firmly in the center of our radar screen and we’ve continued work on that. We’ve had a number of follow-up meetings. We are collaborating and we will strengthen and intensify our cooperation on these issues."

He added that "We also remain pretty committed to the integration of China in the world's trading system. We welcome China and embrace China as part of the world trading system. But as part of that system China has responsibilities of its own to discharge. It can contribute to that process of integration into the global economy better than anyone. We are prepared to assist with that but we must do so in a way that respects WTO rules and international law, and certainly respects other people’s property, intellectual property rights."

Portman then added, "Let me just say I want to wholeheartedly agree with what Commissioner Mandelson just said."

Also, on February 21, 2006, Pierre Amilhat, an EU Trade Director, gave a speech to the NATO Parliamentary Assembly titled "The European View of the Transatlantic Trade Relationship and an Update of the Doha Agenda".

He stated that "the EU and US are both talking to each other increasingly about third country compliance with WTO rules. As I have already mentioned, we are together tackling the issue of IPR enforcement in third countries. We are also looking at individual cases where both our industries feel that market access opportunities are being denied to them and where coordinated moves from both the EU and US may get things moving."

2/17. Pascal Lamy, the Director General of the World Trade Organization (WTO), gave a speech in Washington DC on February 17, 2006, titled "The Doha Development Agenda: Sweet Dreams or Slip Slidin' Away?"

He asked rhetorically, "Are we on the verge of a collapse of the multilateral trading system as many academics have written recently? are we witnessing the end of and era and taking a sharp bend into bilateralism? Are we moving closer to a ``cheap round´´? Or are we just witnessing the normal positioning that takes place prior to the last lap in the race?"

He then offered his predictions and analysis. First, he said that a cheap round "is not an option". He elaborated that "Even if we were just to keep what we have on the table today we would have gone beyond what was done in the Uruguay Round 10 years ago, well beyond, in fact. In agriculture alone the elimination of export subsidies and the reductions in domestic subsidies already on the table go much further than any previous round. The technology to cut tariffs on industrial or agricultural products would yield results higher than in previous rounds and the commitments on trade facilitation have the potential to boost trade more than any previous administrative commitments. And these are just a few examples of what is on the table already. And I am not saying that we should settle for this. We should aim higher and maintain the ambition that took us where we are today.

Second, he said that "even if the round would not yield everything we want, the WTO is much more than the Round; it comprises a vast body of laws and regulations which we will have to continue to apply. And it has a
dispute settlement which will continue to ensure that the rules of the game are respected." He added that "the WTO
will continue to act as custodian of the multilateral trade laws."

Third, he said that "very few of the so-called free trade agreements are really about freeing trade or creating new trading opportunities. And I still have to see a bilateral agreement that disciplines agricultural or fishery subsidies. Nor is business very encouraged by the proliferation of spaghetti bowls of rules of origin, certificates or standards."

2/22. The U.S. Court of Appeals (2ndCir) issued its revised opinion [32 pages in PDF] in Heerwagen v. Clear Channel, an action alleging violation of antitrust laws in connection with Clear Channel's practices in the national ticket market for live rock concerts. The revised opinion affirms that District Court's denial of class certification. The Court of Appeals issued its original opinion on January 10, 2006. This case is Malinda Heerwagen v. Clear Channel Communications, et al., U.S. Court of Appeals for the 2nd Circuit, App. Ct. No. 04-0699-cv, an appeal from the U.S. District Court for the Southern District of New York.

2/21. The U.S. Court of Appeals (7thCir) issued its opinion [15 pages in PDF] in Mattenson v. Baxter Healthcare, an action alleging violation of the Age Discrimination in Employment Act (ADEA). What may be notable about this case is that the plaintiff was an in house patent attorney for Baxter Healthcare. The attorney prevailed in the District Court, winning about one million dollars in damages. The employer appealed, and the attorney cross appealed, seeking a larger award of damages. The Court of Appeals reversed and remanded with directions that the District Court retry the case. This case and opinion may provide some guidance to companies that are contemplating firing their in house patent counsel two weeks before their retirement benefits vest. This case is Charles Mattenson v. Baxter Healthcare Corporation, U.S. Court of Appeals for the 7th Circuit, App. Ct. Nos.04-4270 and 04-4331, appeals from the U.S. District Court for the Northern District of Illinois, Eastern Division, D.C. No. 02 C 3283, Judge John Darrah presiding. Judge Richard Posner wrote the opinion of the Court of Appeals.

2/22. The Government Accountability Office (GAO) released a report [44 pages in PDF] titled "Business Systems Modernization: Internal Revenue Service's Fiscal Year 2006 Expenditure Plan". This report addresses, among other topics, the Internal Revenue Service's (IRS) new taxpayer information database, the IRS's new web portal and electronic services for tax practitioners, and the IRS's new electronic filing system.

2/16. The Federal Trade Commission (FTC) released a report [31 pages in PDF] titled "Reforms to the Merger Review Process". FTC Chairman Deborah Majoras stated in a release that "Over the past decade, the growth in the number of electronic documents and the greater use of economic tools to analyze mergers have increased the costs involved in second requests ... The reforms that we are implementing today should improve the effectiveness and efficiency of the FTC’s review of mergers and reduce the burdens of the second request process, to the benefit of the parties and consumers."

2/15. The House Homeland Security Committee held a hearing titled "The State of Interoperable Communications: Perspectives from the Field". See, prepared testimony [PDF] of Casey Perry (National Troopers Coalition), prepared testimony [PDF] of Tim Bradley (National Volunteer Fire Council), prepared testimony [PDF] of Diane Linderman (American Public Works Association), prepared testimony [PDF] of William Moroney (United Telecom Council), and prepared testimony [PDF] of William Pinsky (American Hospital Association).

The House will not meet on Monday, February 20, through Friday, February 24. It will next meet on Tuesday, February 28. See, Republican Whip Notice.

The Senate will not meet on Monday, February 20, through Friday, February 24. See, 2006 Senate calendar.

8:00 AM - 2:00 PM. The Board of Directors of the National Cable & Telecommunications Association (NCTA) will meet. For more information, contact: Barbara York or Kawania Wooten at 202 775-3669. Location: St. Regis Hotel.

1:00 PM. Representatives of registrars and businesses who are interested in the Internet Corporation for Assigned Names and Numbers (ICANN) agreement with VeriSign will hold a conference call and media availability to discuss the agreement and internet governance issues. To participate, call 1 803-477-2001. The participant code is: 302-981. For more information, contact Marilyn Cade at mscade at cox at net.

6:00 - 8:00 PM. The DC Bar Association will host an event at which Kenneth Wainstein, U.S.Attorney for the District of Columbia, will speak. The price to attend ranges from $0-$15. For more information, call 202 626-3463. See, notice. Location: Hogan & Hartson, 555 13th St., NW.

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its notice of proposed rulemaking (NPRM) regarding the rules for expanding the scope of the Emergency Alert System (EAS) to cover certain digital services. The FCC adopted a report and order (R&O) and further NPRM on November 3, 2005. The R&O expanded the categories of service providers that are subject to the FCC's EAS mandates to include providers of digital broadcast and cable TV, digital audio broadcasting, satellite radio, and direct broadcast satellite (DBS) services. The NPRM asks for comments how the FCC should plan this "next-generation alert and warning system". See, story titled "FCC Requires DBS, Satellite Radio, Digital Broadcasters, and Others to Carry AES Communications" in TLJ Daily E-Mail Alert No. 1,247, November 4, 2005. The R&O and NPRM is FCC 05-191 in EB Docket No. 04-296. It was released on November 10, 2005. See, notice in the November 25, 2005, Vol. 70, No. 226, at Pages 71072 - 71077.

11:45 AM - 2:00 PM. The American Enterprise Institute (AEI) will host a program titled "The Google Copyright Controversy: Implications of Digitizing the World's Libraries". The speakers will be Robert Hahn (AEI-Brookings Joint Center), Douglas Lichtman (University of Chicago), and Hal Varian (University of California at Berkeley). See, notice. Location: AEI, 12th floor, 1150 17th St., NW.

The Senate will return from its Presidents' Day recess. See, 2006 Senate calendar.

POSTPONED. 12:30 PM. New York Governor George Pataki will give a speech. See, notice. Location: Ballroom, National Press Club, 529 14th St. NW, 13th floor.

The House will return from its President's Day District Work Period at 2:00 PM. See, Republican Whip Notice.

8:30 AM - 4:45 PM. Day one of a two day conference hosted by the National Telecommunications and Information Administration (NTIA) titled "Improving Spectrum Management through Economic or Other Incentives". See, notice. Deputy Secretary of Commerce Anthony Sampson will give opening remarks. Location: National Academy of Sciences, Lecture Room, 2101 Constitution Ave., NW. The entrance at 2100 C St.

9:30 - 11:30 AM. The American Enterprise Institute (AEI) will host a panel discussion titled "Former SEC Division Directors Give Their Views on Regulatory Reform". The speakers will be Barry Barbash, Kathryn McGrath, Paul Roye, and Marianne Smythe. See, notice. Location: AEI, 12th floor, 1150 17th St., NW.

9:30 AM. The Senate Judiciary Committee (SJC) will hold another hearing "to examine issues relating to wartime executive power and the NSA's surveillance authority". Press contact: Blain Rethmeier (Specter) at 202 224-5225 or Tracy Schmaler (Leahy) at 202 224-2154. Location: Room 226, Dirksen Building.

10:00 AM. The Senate Commerce Committee (SCC) will hold a hearing titled "USF Contributions". See, notice. Press contact: Melanie Alvord (Stevens) at 202 224-8456, Aaron Saunders (Stevens) at 202 224-3991, or Andy Davis (Inouye) at 202 224-4546. The hearing will be webcast by the SCC. Location: Room 562, Dirksen Building.

12:00 NOON - 1:15 PM. The DC Bar Association will host a panel discussion titled "Patent Law Update: Impact Of Recent Federal Circuit Decisions On Crafting Patent Applications". The speaker will be Dale Lazar (DLA Piper Rudnick Gray Cary). The price to attend ranges from $10-$30. For more information, call 202 626-3463. See, notice. Location: D.C. Bar Conference Center, 1250 H Street NW, B-1 Level.

1:00 - 6:30 PM. The Federal Communications Bar Association's (FCBA) will host a continuing legal education (CLE) seminar titled "Communications Law 101". Location: Wiley Rein & Fielding, 1776 K St., NW.

2:30 PM. The Senate Commerce Committee (SCC) will hold a hearing titled "USF Distribution". See, notice. Press contact: Melanie Alvord (Stevens) at 202 224-8456, Aaron Saunders (Stevens) at 202 224-3991, or Andy Davis (Inouye) at 202 224-4546. The hearing will be webcast by the SCC. Location: Room 562, Dirksen Building.

5:00 PM. Deadline to submit comments to the National Institute of Standards and Technology's (NIST) Computer Security Division regarding its Draft Special Publication 800-73-1, titled "Interfaces for Personal Identity Verification". See also, summary [3 pages in PDF] titled "Proposed Changes to SP 800-73".

6:30 - 8:30 PM. The Federal Communications Bar Association's (FCBA) Young Lawyers Committee will host an event titled "Happy Hour".  For more information, contact Jason Friedrich at jason dot friedrich at dbr dot com or Natalie Roisman at natalie dot roisman at fcc dot gov. Location: Restaurant Kolumbia, 1801 K Street, NW.

8:30 AM - 5:00 PM. Day two of a two day conference hosted by the National Telecommunications and Information Administration (NTIA) titled "Improving Spectrum Management through Economic or Other Incentives". See, notice. Location: National Academy of Sciences, Lecture Room, 2101 Constitution Ave., NW. The entrance at 2100 C St.

8:30 AM - 1:00 PM. The Information Technology Association of America (ITAA) will host an event titled "Enterprise VoIP: From Communication to Collaboration". For more information, contact Eerik Kreek at ekreek at itaa dot org. See, notice. Location: Ritz Carlton Pentagon City, Arlington, VA.

10:30 AM. The Senate Appropriations Committee's Subcommittee on the Legislative Branch will hold a hearing on the FY 2007 budget for the Library of Congress (LOC), Government Accountability Office (GAO), and other entities. Location: Room 138, Dirksen Building.

2:00 PM. The House Appropriations Committee's Subcommittee on Science, the Departments of State, Justice, and Commerce, and Related Agencies will hold a hearing on the FY 2007 budget for the Federal Communications Commission (FCC). Location: Room H-309, Capitol Building.

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to the notice of proposed rulemaking (NPRM) portion of its Report and Order (R&O) and NPRM of August 5, 2005 regarding regulation of information services. The R&O classified wireline broadband internet access services as information services. The NPRM proposes to impose new regulatory burdens on information services. This item is FCC 05-150 in WC Docket No. 05-271, CC Docket No. 02-33, CC Docket No. 01-337, CC Docket Nos. 95-20 and 98-10, and WC Docket No. 04-242. See, story titled "FCC Classifies DSL as Information Service" in TLJ Daily E-Mail Alert No. 1,190, August 8, 2005. The FCC released the text [133 pages in PDF] of this item on September 23, 2005. See, notice in the Federal Register, October 17, 2005, Vol. 70, No. 199, at Pages 60259 - 60271.

10:00 AM. The House Appropriations Committee's Subcommittee on Science, the Departments of State, Justice, and Commerce, and Related Agencies will hold a hearing on the FY 2007 budget for the National Science Foundation (NSF). Location: Room H-309, Capitol Building.

10:00 AM. The House Appropriations Committee's Subcommittee on Labor, Health and Human Services, Education, and Related Agencies will hold a hearing on the FY 2007 budget for President Bush's American Competitiveness Agenda. Location: Room 2358, Rayburn Building.

MOVED TO MARCH 14. 10:00 AM. The Senate Commerce Committee (SCC) will hold a hearing titled "Wireless Issues / Spectrum Reform". See, notice. Press contact: Melanie Alvord (Stevens) at 202 224-8456, Aaron Saunders (Stevens) at 202 224-3991, or Andy Davis (Inouye) at 202 224-4546. The hearing will be webcast by the SCC. Location: Room 562, Dirksen Building.

10:00 AM. The Senate Commerce Committee (SCC) will hold a hearing titled "Voice over Internet Protocol". See, notice. Press contact: Melanie Alvord (Stevens) at 202 224-8456, Aaron Saunders (Stevens) at 202 224-3991, or Andy Davis (Inouye) at 202 224-4546. The hearing will be webcast by the SCC. Location: Room 562, Dirksen Building.

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