Democratic Senators Barbara Boxer and John Kerry are expected to introduce today a bill that would propose to reduce U.S. CO2 emissions by 20% by the year 2020, according to the LA Times.

The Senate bill is supposed to represent the Senate's response to Waxman Markey, the house climate change bill that passed several months ago.

Some speculate that the Senate bill is intended to signal willingness on the part of the Obama administration to make concessions on key terms in order to get a bill passed.  Negotiations in Copenhagen begin in two months on a possible international treaty involving emissions reduction and the U.S. is unable to participate meaningfully in those negotiations without its own domestic emissions cap and trade system.

U.S. citizens and residents with income in foreign bank and investment accounts, foreign trusts, or controlled foreign corporations are required to notify the IRS of those accounts on Schedule B of their 1040.  In addition, by June 30 of each year, individuals must file the form TD F 90-22.1 (also known as the FBAR form) with the IRS. 

Depending on how the funds are held, certain other information returns might also be required (e.g. Forms 3520 series for foreign trusts and/or Forms 5471 and related schedules for foreign corporations).  Failure to report the income from the accounts or to disclose the accounts can result in civil and criminal fines and penalties.  

The current Amnesty Program (technically Voluntary Disclosure Program) was scheduled to expire September 23, 2009 but was recently extended by the IRS to October 15, 2009.  The Amnesty Program allows individuals to voluntarily disclosure the income and the accounts to the IRS and thereby avoid criminal prosecution.  Certain civil penalties still apply, however.   

To qualify for the reduced penalty under the Amnesty Program the taxpayer must not have received the funds in an illegal enterprise, and the disclosure must be “timely”. 

A disclosure is timely if it is received before the IRS:

a.   has initiated or informed the taxpayer that it intends to commence a civil examination or criminal investigation of the taxpayer;

b.   has received information from a third party informing the IRS of the taxpayer’s noncompliance;

c.   has initiated a civil examination or criminal investigation directly related to the specific liability of the taxpayer; or

d.   has acquired information directly related to the specific liability of the taxpayer from a criminal enforcement action (e.g., search warrant, grand jury subpoena).

           
The Amnesty Program requires that the taxpayer (1)  file all forms 1040X on the unreported income for 2003 through 2008;  (2) pay all tax and interest on the unreported income for those years;  (3) pay accuracy related penalties for those years;  (4) pay a 20% penalty  on the highest net asset value of the accounts(s); and (5) file all missing FBAR’s (TD F 90-22.1) from 2003-2008 as well as any other necessary information returns such as Forms 3520, 3520A, 5471, 5472, 926, 8865.

For more information, please download the white paper from the Business Law Updates page.

Just days after he punted on a long-standing promise to allies in Eastern Europe on missile defense, the Iranian regime has rewarded President Obama by announcing that they are now working on a second plant for the enrichment of nuclear fuel.

President Obama's serial apology approach to foreign policy is not going well.  In his campaign he said that no harm would come from sitting down with any of our adversaries in the world.  After taking office he hasn't paused in his search for the next audience to whom he can apologize for what he perceives as past failings of the U.S.

it's not working.

With each no apology and each new offer to begin a "dialogue" our adversaries respond with action that demonstrates that underscores their belief that the current U.S. administration is too weak to act.

According to a new survey commissioned by PriceWaterhouseCoopers the worst of the recession is over for law firm. 

The survey asked questions of 50 large law firms and got results indicating that transactional lawyers were starting to get busy again.

I'm optimistic about the economy but I would encourage my bretheren at the large law firms not to get too comfortable.  Many of those law firm reduced their ranks by as much as 1/3.  It's not surprise their's more work to be done now that there are fewer lawyers.

Clients are certainly not thinking that the recession is over.   They're continuing to look for cost savings and are quick to ask for lower hourly rates or fixed fee engagements.  The BigLaw model of leveraging young associates with high hourly rates is not likely to return very soon.

I am honored to announce that I've been appointed the Chair of the Renewable Energy Committee of the American Bar Association's Public Utility Section.

The Renewable Energy Committee will be composed of lawyers interested in the development and growth of the renewable energy industry. Committee members include both general counsels and private practitioners in the space. The Committee will write a summary of renewable energy legal developments twice each year and present their work at the Executive Council meeting of the Section. The two reports will be compiled into an annual report that is published and distributed to all of the Section's 4,000+ members.

Membership in the Committee is limited to members of the American Bar Association who are also members of the Public Utility Section.

To join the ABA, please visit the Public Utility Section page and clink on the link to "Enroll Today." If you are an ABA Member and would like to join the Public Utility Section, please click on the link to "Join Us."

Members of the Renewable Energy Committee will also have access to the Committee's LinkedIn Group for easy access to other Committee Members and Members-only research materials and forms.

If you are an attorney practicing in the renewable energy space I encourage you to join the Renewable Energy Committee so that you can take advantage of, and contribute to, these resources.

John Yoo, former Bush Administration lawyer and current law professor at U.C. Berkeley says that President Obama risks repeated the intelligence disasters of the Carter presidency by pushing forward with his prosecution of CIA officials. 

He writes:

"Last month, the president and Attorney General Eric Holder Jr. launched a destructive investigation into the CIA's detention and interrogation of al Qaeda leaders. Several detainees were directly involved with the planning and execution of the attacks on Sept. 11, 2001. They were captured at a time when our government feared a second wave of attacks."

"Our nation's leaders made the difficult decision to use coercive interrogation methods to learn as quickly as possible what these hardened al Qaeda operatives knew. As one of many government lawyers who worked on these counterterrorism programs, I know the terrible pressure of time and events in the months after 9/11."

"Knowledgeable officials expected that al Qaeda would try again -- soon -- and in a more devastating fashion. But fair-minded people should take heart that there has been no follow-up attack in the United States. Several plots have been foiled, and the terrorists are on the run. This was not the result of luck -- it is because of the hard work of members of the military and our intelligence agencies."

"Their reward is an open-ended investigation, and in some instances the disturbing reopening of cases closed by career prosecutors. Others have written about the financial ruin in store for agents and analysts whose focus will shift from the enemy to their legal bills. What has gone less well understood is what the investigation will do to the CIA as an institution at a time when it serves as the nation's eyes and ears and, sometimes, the sword and shield, during war against a shadowy, covert enemy."

As the Telegraph's Con Coughlin writes, "where is Hillary Clinton in the great missile defence surrender."  Obama's pitch during the campaign was always dovish: stop the war in Iraq and talk with any one who will listen.  Hillary was much more of a hawk.

So when President Obama executes one of the greatest foreign diplomacy flip-flops of our generation, unilaterally surrendering missile defense to a superpower rival and abrogating a promise made to an ally, where is the U.S. Secretary of State? 

In her published remarks over the past several days there she hasn't said a word. 

Could it be that Madam Secretary is privately as appalled as most American's are by the President's willingness to throw Putin a bone in the shape of Poland? 

Will the calculating former First Lady of Arkansas take a look at the President's poll numbers and begin to do some math on her own about the likelihood of the President getting a second nomination in 2012? 

Iran's president-cum-dictator, Mahmoud Ahmadinejad used Iran's annual Quods (Israel) Day to declare that the holocaust was a "myth" and a "lie" that was used as a "pretext" to create the Israeli state.  He said that Israel would "not last long". 

In case anyone had any misunderstandings as to what that meant, the U.N. International Atomic Energy Agency said that Iran was well on its way to making a nuclear weapon.

But wait, certainly Iran would never attack Israel so long as the U.S. was available to stand behind its security guarantees.  Just ask our long-time allies the Poles who are now accusing the U.S. of having "sold" them to Russia but dropping the long-promised missile defense program planned by the U.S.

Forgive me so much sarcasm so early in the morning, but President Obama's craven unilateral disarmament in eastern Europe has made the world situation more dangerous several times over.  For the past several years the Iranian nuclear program has been building towards an inevitable confrontation between Israel and Iran.  The U.S. had acted as Israel's sponsor, jaw-boning Iran into dropping its nuclear ambitions and triangulating with sanctions and threats of sanctions.

By showing the world that he will drop a promise to an ally (Poland) in the hopes of a concession from a rival (Russia) President Obama has displayed extraordinary weakness and makes it clear to other potential adversaries (Iran) that they need fear nothing from him.

Withdrawing fron the Iranian/Israeli confrontation over Iranian nukes does not make the region more peaceful.  On the contrary, given Iran's repeated proclamations that it will "wipe Israel off the map" Israel now has little choice but to act unilaterally.  That makes the world a much more dangerous place.

An article in the online version of the ABA Journal claims that mega firm O'Melveny & Myers is planning to become a leader in fixed fee legal services while dramatically reducing its leverage (i.e. the ratio of associates to partners) to as low as 2:1.

The news comes out as a supposedly confidential memo at the firm was leaked to the ABA Journal.  (One hopes that the firm will execute on its pricing plan with greater precision than its confidentiality plan). 

They're going to have an uphill battle.  Fixed fee quotes are difficult to manage as law firms generally do not draft detailed statements of work in their engagement letters.  The inherent uncertainty in legal matters means that it is inevitable that new client requirements will arise, leaving the client to believe that the new work is "within the scope" of the fixed fee arrangement while the law firm argues that it is not. 

But more fundamentally, the economics of fixed fee legal services is simply incompatible with the economics that partners at O'Melveny have enjoyed for the past decade or more.  2008 revenues at the firm were roughly $908 million and profits per partner were $1.5 million.  You can only achieve those kinds of numbers with tremendous leverage (or tremendously high fees). 

Let's imagine that you're an O'Melveny partner and you've got exactly two associates.  Assume they're each paid $180k per year (which amounts to roughly $234k each when you include benefits).  You've also got to support a secretary and your share of the rent, so your cost base has got to be in the range of $500,000.  In other words, as an equity owner of the firm, you don't take home a dime until you've cleared at least half a million.

If each of your two associates bill 2,000 hours at $400 per hour, that's $800k (assuming 100% realization on the billings - which never happens).  In other words, complete engagement of both your associates and complete collection of all their billable hours (at a rate of $400 per hour) covers your cost with a profit of roughly $300,000.  Where is the other $1.2 million going to come from? 

You could bill 2,000 of your own hours (and that's alot of hours for a partner, leaving precious little time for business development, let alone a family) at $600 per hour and then collect 100% of that amount. 

You can see where this is going.  O'Melveny might transform itself into a different kind of law firm, but its partners are going to make alot less.  The laws of economics being what they are, my bet would be on the proposition that O'Melveny abandons its fixed fee approach as soon as the economy turns around.  Whether its clients will let it is another question.

The controversy surrounding an undercover video shot of ACORN employees encouraging tax evasion and other wrongdoing is beginning to gather steam, raising the prospect that further scrutiny will embarass the President who used to be associated with the organization.

As John Fund explains in today's Wall Street Journal:

Acorn's allies in Congress have long stopped every move to rein it in. Rep. Steve King (R., Iowa), for example, has tried six times to get House floor votes restricting Acorn's access to federal funds but has been blocked by Speaker Nancy Pelosi's hand-picked Rules Committee members. Some Democrats have grumbled. Michigan's John Conyers, chair of the Judiciary Committee, urged a hearing be held on Acorn abuses in March, but later told the Washington Times "the powers that be decided against it."

There is a chance the latest scandals will convince Democrats that Acorn is too toxic a political partner. And President Barack Obama, who once ran a voter-registration program for an Acorn partner (Project Vote) and then worked for Acorn as a lawyer on key cases, has every incentive to distance himself further from the organization.

Former Acorn board members tell me the group has always been confident it will be protected. After the Nevada voter-registration fraud indictment last May, Bonnie Greathouse, Acorn's chief organizer in the state, told the Las Vegas Review-Journal that "we've had bad publicity before" and survived. "People always come forward to our defense. We're just community organizers, just like the president used to be."

What is the middle east's only democracy to do when a neighboring state has vowed to wipe it "off the map" but continues to develop nuclear weapons and the world's only superpower looks the other way?  Israel has no choice but to develop plans for a preemptive strike on Iranian nuclear facilities, according to Bret Stephens in today's Wall Street Journal.

President Obama took alot of heat during the presidential campaign on his plan to sit down with Iran's leaders without preconditions.  It looks like this is a campaign promise he is keeping. 

The Atlanta legal community is mourning the loss of Elliott Goldstein, one of its brightest stars and most recognized counsellors. The Fulton County Daily Report (subscription required) is carrying Goldstein's obituary today. 

"He was an amazing person and in some ways one of the fathers of American corporate law," said Armin G. Brecher, a partner and former chairman of the Powell Goldstein firm that last year became part of Bryan Cave.

Brecher noted that Goldstein chaired the American Bar Association corporate law section for two different terms, 20 years apart, when it wrote and then rewrote the model code of business litigation. Goldstein also served on the New York Stock Exchange legal advisory committee.

Although he tried litigation early in his career, Goldstein's passion was for American corporate law. Even before he went to law school, he envisioned creating a corporate practice in the firm his father, Max Goldstein, helped start.

"He understood how business worked, and so he brought a great balance to the law," said Tom McNeill, a partner in the Atlanta office of Bryan Cave. "He brought an ability to craft a business solution to a legal problem. ... He was as interested in the business side of the problem as the legal side. Clients knew that and, frankly, they often relied on him for business advice as well as legal advice."

Goldstein also started the Powell Goldsteins Washington office during the mid-1970s while the former Georgia governor, Jimmy Carter, was president. Some of Goldstein's partners left to join the White House staff and returned to the firm after the election of President Ronald Reagan. Michael H. Chanin, a partner in Washington, served as deputy assistant to Carter. Stuart E. Eizenstat served as the Carter's chief domestic policy adviser, then returned to the firm. Goldstein was 60 when he moved to Washington to build the firm's D.C. practice. "It's just amazing. At a time when most men were thinking about retirement, Elliott Goldstein took on a new challenge," said Robert M. Travis, a partner in the firm and former chairman of the litigation section. "He thought our law firm needed a window on the world. He had a national view."

I can remember meeting Elliott when I started my practice at Powell Goldstein in 1991.  He was a charming and gracious senior partner, asking young associates into his office to offer his assistance.  He helped me with some American Bar Association committee work back in that time frame and had a deep resevoir of history and contacts within the legal community.

His leadership was not limited to the legal world, however, as he was awarded two bronze stars for his service as a field artillery officer in the U.S. Army during the Battle of the Bulge. 

Few of us will see as much or accomplish as much as Elliott Goldstein and fewer still will earn the respect he did of his clients and colleagues.  He will be missed.

A weekly compilation of renewable energy news and information from around the Web.

The co-founder of Sun Microsystems, Vinod Khosal, has raised a $1.1 billion venture fund to pursue deals in early and mid-stage renewable energy and clean tech enterprises. 

The NY Times claims that it is the biggest first-time fund in a decade and the announcement is a shot-in-the-arm to this sector just as the economy is beginning to recover.

In the first half of the year, investments in green tech plunged to $513 million from $2 billion in the first six months of 2008, according to a survey by PricewaterhouseCoopers.

Fund founder Vinod Khosla said, "There's an opportunity basically where technology innovation changes economics. In our business you can't get in and out when the markets are bad. In some sense, when most people aren't investing, it's a good time to invest."

Khosla has deep roots in funding tech companies. He is a co-founder of Sun Microsystems Inc. and a former partner at Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers.

For his latest round, he won investments from the California Public Employees' Retirement System, the nation's largest pension fund, which put $200 million into the bigger fund and $60 million into the high-risk fund. About two-thirds of the investments will be devoted to green tech, with the remainder invested in more traditional technology firms