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Whistleblowers Pop Up As Japan Changes
International | 2007/11/12 01:50
When officer Toshiro Semba revealed his bosses in the police department were forging receipts to wine and dine on the public's money, they took his gun away.

He was decreed too emotionally unstable to carry a weapon _ a humiliation, he says, designed to corner him into quitting. For 500 days, he was ordered to sit alone in a tiny room at the Ehime Prefectural Police.

"I became a policeman because I wanted to help powerless people. But when I got in, I learned it was totally different," said Semba, 58.

He was passed over for promotions after he refused to fake receipts and is still a sergeant after 34 years. "I wear that title proudly _ like a medal," Semba said.

Whistleblowers like Semba have been especially solitary in Japan, where conformity and respect for hierarchy are venerated as tradition. They have suffered in silence, labeled as traitors.

That is gradually changing. As Japan modernizes, people increasingly see themselves as individuals and consumers, with a duty to speak up against wrongdoing.

Whistleblowers are behind the spate of recent scandals embroiling a pastry maker that forged manufacturing dates, a builder that cheated on fireproofing tests and a meat processor that sold a mixture of meats and chicken as pure ground beef.

Reports to the government of suspicious food manufacturing, nearly all from insiders, have skyrocketed from some 100 a month last year to 697 last month, food safety official Yosuke Abe said.

Semba won personal vindication in September when a court awarded him $8,800 in damages, ruling that his on-the-job treatment was retaliation for his 2004 exposure of police corruption. The police are appealing the ruling.

Semba couldn't hold back tears when his court ruling was read.

"I felt there's justice in this world," he said.

Although the award is small by U.S. standards, it is a major victory in Japan, where court-ordered damage compensation tends to be minimal and the value of whistleblowers is barely starting to be recognized.

The first law to protect whistleblowers passed only last year, but critics say it's inadequate. It requires whistleblowers to first tell their employer and wait before going public if they hope to get any protection.

Whistleblowers have been rare because Japanese companies, even major ones, are run like families, and individual workers don't see themselves as hired by contract as do American workers, says Koji Igata, business administration professor at Osaka University of Economics.

"Whistleblowers are seen as eccentrics who've turned on their parents," he said.

Japan modernized over the last half-century by fostering corporate loyalty in return for secure employment. So when a company runs into trouble, good workers are expected to defend it; exposing wrongdoing is viewed as betrayal.

Only in recent years, as Japanese companies hire lower-paid younger workers and drop job guarantees in response to global competition, has the idea of criticizing an employer started to catch on, said Igata, who studies U.S. corporate governance.

Japan is slowly starting to change as individuals start to see themselves more as consumers and investors, he said.

Calls to strengthen corporate ethics are on the rise, partly from grassroots movements but also from companies eager to catch up with the rest of the world in governance standards.

The increasing influx of part-time workers has also contributed to eroding the ties of loyalty that discouraged whistleblowers.

Akafuku, the pastry maker targeted as a result of a whistleblower, employed about 250 part-time workers, half of its work force. It was shut down after it was found to be reselling unsold pastries shipped back from stores as new ones.

Hiroaki Kushioka, who exposed price-rigging at his trucking company 30 years ago, was one of Japan's pioneer whistleblowers. He was confined for years to a closet-like office, denied promotion and pressured to quit. He often spent his time gardening or shoveling snow at work.

He sued for damages in 2002, and won a landmark victory in 2005. The attention his court case received has been critical in raising public awareness about social responsibility.

"Back in those days, we were seen as informants and rats," said Kushioka, who retired last year. "It may be happening way too late, but finally the idea of the public good is starting to take root in Japan."

The biggest corporate scandals of the last decade in Japan were brought to light by whistleblowers _ the systematic cover-up of defects at Mitsubishi Motors Corp., the illicit pocketing of government subsidies at Snow Brand Foods and the cover-up of nuclear power plant defects at Tokyo Electric Power Co.

The examples set by high-profile whistleblowers like Kushioka and Semba are providing courage for others to come forward.

But Japan still lags behind the West nations in recognizing their status.

American whistleblowers can become heroes with book deals and lecture tours. They can even collect a portion of what the federal government recovers if they expose overcharging by contractors.

The lonely tales of Japanese whistleblowers are a stunning testament to a culture that is docile on the surface but ruthless to those who dare to question authority.

Akiko Tamura, 63, a former public servant who tried to expose the misuse of donations eight years ago, recalls how hard it was to endure yelling from bosses and heckling from co-workers.

Akiko Tamura, 63, who eight years ago tried to expose the misuse of donations at a welfare section of the local government in southern Japan, recalls how hard it was to endure yelling from bosses and heckling from co-workers.

"I thought about killing myself so many times. I had to watch others get promoted. And I never thought I did anything wrong," she said.

Two years after retirement, Tamura still has nightmares. "I don't think I'll ever get over it," she said.

Semba, still a railway policeman, says he is donating his lawsuit money to an ombudsman charity because money was never the goal of his career-long battle.

But what made it all worth it was an elderly woman, who recognized him at a highway rest stop where he had stopped for a cup of coffee.

"She told me, 'You made sacrifices for us. I must thank you,'" he said. "She understood everything."



China Sentences 5 to Death in Xinjiang
International | 2007/11/11 10:15
China has sentenced to death five ethnic Muslims from the country's restive far western region who were accused of separatist activities, state media reported Sunday. Xinhua News Agency said of the five men who were sentenced to death, two had their sentences suspended for two years. That means the death sentence will be commuted to life in jail if the prisoner shows good behavior and remorse for two years.

A sixth man was sentenced to life in prison by the Intermediate Court in Kashgar on Friday. Xinhua said the six were convicted of charges ranging from illegally making explosives to leading a terrorist organization.

Chinese authorities say militants among the Uighurs — Turkic-speaking Muslims — are leading a violent Islamic separatist movement in Xinjiang and are seeking to set up an independent state in the Central Asia border province.

"In order to split the nation ... they carried out extreme religious activities and advocated holy war and established a terrorist training base," Xinhua said of the six.

Critics accuse Beijing of using claims of terrorism as an excuse to crack down on peaceful pro-independence sentiment and expressions of Uighur identity.

About 1.5 percent of China's 1.3 billion people are Muslim, according to the U.S. State Department's International Religious Freedom Report. But not all of them are Uighurs or live in Xinjiang.

A man who answered the phone at the Intermediate Court confirmed the sentences but said he had no other details. He refused to give his name. A call to the city government office rang unanswered.

Xinhua said the six men "recruited dozens of terrorists and sent them to 'Black Valley Training Camp' to undergo nearly two months of secret training." It did not say what the training camp was.

It also said the six men killed a police officer when they were arrested. It did not say when they were arrested.

China has cracked down hard on anyone it feels is challenging its authority in Xinjiang. In February, U.S. broadcaster Radio Free Asia reported that China had executed another Muslim, Ismail Semed, in the region on charges of trying to split the country.



Supreme Court Could Take Guns Case
Court Watch | 2007/11/10 10:24
Supreme Court justices have track records that make predicting their rulings on many topics more than a mere guess. Then there is the issue of the Second Amendment and guns, about which the court has said virtually nothing in nearly 70 years. That could change in the next few months.

The justices are facing a decision about whether to hear an appeal from city officials in Washington, D.C., wanting to keep the capital's 31-year ban on handguns. A lower court struck down the ban as a violation of the Second Amendment rights of gun ownership.

The prospect that the high court might define gun rights under the Constitution is making people on both sides of the issue nervous.

"I wouldn't be confident on either side," said Mark Tushnet, a Harvard Law School professor and author of a new book on the battle over guns in the United States.

The court could announce as early as Tuesday whether it will hear the case.

The main issue before the justices is whether the Second Amendment protects an individual's right to own guns or instead spells out the collective right of states to maintain militias. The former interpretation would permit fewer restrictions on gun ownership.

The Second Amendment reads: "A well regulated militia, being necessary to the security of a free state, the right of the people to keep and bear arms, shall not be infringed."

The federal appeals court for the District of Columbia was the first federal panel to strike down a gun-control law based on individual rights. The court ruled in favor of Dick Anthony Heller, an armed security guard whose application to keep a handgun at home was denied by the district.

Most other U.S. courts have said the Second Amendment does not contain a right to have a gun for purely private purposes.

Chicago has a similar handgun ban, but few other gun-control laws are as strict as the district's.

Four states — Hawaii, Illinois, Maryland and New York — are urging the Supreme Court to take the case because broad application of the appeals court ruling would threaten "all federal and state laws restricting access to firearms."

The district said its law, passed in 1976, was enacted by local elected officials who believed it was a sensible way to save lives. The law also requires residents to keep shotguns and rifles unloaded and disassembled or fitted with trigger locks.

The city's appeal asks the court to look only at the handgun ban because local law allows possession of other firearms.

Critics say the law has done little to curb violence, mainly because guns obtained legally from the district or through illegal means still are readily available.

Although the city's homicide rate has declined dramatically since peaking in the early 1990s, it ranks among the nation's highest, with 169 killings in 2006.

Heller said Washington remains a dangerous place to live. "People need not stand by and die," he said in court papers.

He said the Second Amendment gives him the right to keep working guns, including handguns, in his home for his own protection.

The last time the court examined the meaning of the Second Amendment was in a 1939 case in which two men claimed the amendment gave them the right to have sawed-off shotguns. A unanimous court ruled against them.

Gun control advocates say the 1939 decision in U.S. v. Miller settled the issue in favor of a collective right. Gun rights proponents say the decision has been misconstrued.

Chief Justice John Roberts has said the question has not been resolved by the Supreme Court. The 1939 decision "sidestepped" the issue of whether the Second Amendment right is individual or collective, Roberts said at his confirmation hearing in 2005.

"That's still very much an open issue," Roberts said.

Both the district government and Heller want the high court to take the case. The split among the appeals courts and the importance of the issue make it likely that the justices will do so, Tushnet said.



Rules for plaintiffs with Vioxx claims
Breaking Legal News | 2007/11/09 11:52

Former users of withdrawn painkiller Vioxx will be eligible for a piece of manufacturer Merck & Co.'s $4.85 billion nationwide settlement if they meet strict criteria meant to weed out people with bogus claims. They must:

-- Have had a claim filed by Thursday, the day before the deal was announced.

-- Already have medical documentation that they suffered a heart attack or an ischemic stroke; people who had mini-strokes or hemorrhagic strokes are not eligible.

-- Have proof they received at least 30 Vioxx pills.

-- Have received Vioxx pills recently enough to indicate they likely took the painkiller within two weeks of their injury.

-- Be legal U.S. residents alleging their injury occurred in the United States.

-- Promptly register their claims after being contacted by their current attorney.



SEC investigating Merrill subprime portfolio
Securities | 2007/11/08 08:40
Embattled investment bank Merrill Lynch & Co. said Wednesday that federal regulators were investigating matters related to its holdings of high-risk mortgage debt. The Securities and Exchange Commission began the investigation Oct. 24, the world's largest brokerage firm said in a regulatory filing. It did not provide details but said it was cooperating with the inquiry.

Recent news reports have said the SEC inquiry included deals that Merrill struck with hedge funds to allegedly cloak its vulnerability to so-called sub-prime mortgage debt. The SEC has not publicly commented.

News late last month of a $2.24-billion third-quarter loss -- the biggest in Merrill's 93-year history -- tied to the summer's credit crisis shook the firm and swept out Chief Executive Stan O'Neal last week.

New York-based Merrill also said a class-action lawsuit by shareholders and a shareholder-derivative suit were filed recently against the company and several executives claiming they failed to disclose pertinent information about collateralized debt obligations, or CDOs, complex instruments that combine slices of different kinds of risk.

It was Merrill's bet on CDOs, and sub-prime mortgages underpinning many of them, that proved to be O'Neal's downfall.


Tully law firm adds office in D.C.
Law Firm News | 2007/11/08 08:36



An Albany law firm will be adding offices in Washington, D.C. early next year, buoyed by a recent contract with the largest union of federal employees in the country.

Tully Rinckey & Associates PLLC plans to open a Washington office with three attorneys in the spring, while later adding a branch office in Utica, N.Y., firm partner Greg Rinckey said today. Before those sites open, the firm is scheduled to move its main office to 441 New Karner Road in Albany, a quarter-mile from its current site.

Rinckey said the firm hopes the Washington office will be "a springboard" for landing future contracts with federal agencies. Recently, the firm agreed to take on a backlog of 3,000 cases for the American Federation of Government Employees, Rinckey said. The union represents about 600,000 workers holding jobs with the federal government and the District of Columbia.

Steven Herrick, the firm's senior counsel, will move to Washington to head that office. Associate attorney Tracy Dam-Chieco will run the Utica office.



Supreme Court Takes Up Arbitration Case
Breaking Legal News | 2007/11/08 08:22
A seemingly divided Supreme Court on Wednesday debated whether the judiciary should play a role in arbitration cases, the process used by businesses to sort out tens of thousands of disputes as an alternative to going to court. In an environmental cleanup case, a lawyer for toy manufacturer Mattel Inc. told the justices that the role of the courts is a limited one and that an arbitrator's decision in the company's favor should stand.

An attorney for a property owner where Mattel once operated a factory in Beaverton, Ore., argued that the courts should step in and correct mistaken decisions by arbitrators.

Arbitration is often regarded by the business community as a cost-saving, timesaving substitute for lawsuits. But the risk is that the losing side cannot seek relief in the courts except in limited circumstances.

In the fight between Hall Street Associates L.L.C. v. Mattel, the two sides agreed in advance that a federal court could review an arbitrator's decision for possible errors of law. A federal judge overturned the arbitrator's decision, making the property owner the winner in the Mattel case.

Chief Justice John Roberts suggested expanded judicial review is appropriate in this instance, pointing to the fact that the two sides negotiated a contract with court review as one of its provisions.

Justices David Souter, Ruth Bader Ginsburg and Antonin Scalia suggested Mattel might be seeking more latitude than the law allows for parties to negotiate expanded judicial review in arbitration cases.

The American Arbitration Association says a cornerstone principle of federal law is that arbitrators' awards are final and binding.

If parties to a dispute are allowed to engage in expanded judicial review, arbitration will become a prelude to lawsuits instead of a substitute, the association said in court papers.

Many industries have an interest in the case, including the wireless communications industry which has filed papers in support of an expanded role for the courts.

The wireless industry says that in the absence of court review, parties may decide they are unwilling to "bet the company" on arbitration. The result would be a decline in the number of disputes sent to arbitration and an added workload for already-overburdened courts.

In the case before the justices, Hall Street Associates wants Mattel to pay for cleanup at a contaminated factory site that Mattel leased from Hall Street.

The toy company and the property owner agreed to submit the case to arbitration, signing an agreement allowing either side to seek court review of the decision.

The property that Mattel leased from Hall Street Associates contains high levels of the industrial solvent TCE used to degrease metal parts.

Mattel did not contaminate the grounds with the hazardous chemical and an arbitrator initially ruled the toy manufacturer did not have to pay for the cleanup.

The case then began a six-year odyssey through the federal court system.

A judge said the arbitrator's decision "defies logic." The arbitrator responded by reversing himself and awarding Hall Street $584,000.

This prompted another trip to the courts and ultimately an order by the 9th U.S. Circuit Court of Appeals in San Francisco to reinstate the original arbitration award in favor of Mattel.



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