I have no idea if Donald T. Sterling discriminated against minorities in renting apartments he owns in Koreatown. The Justice Department said he did, and a couple of weeks ago it got him to pay $2.73 million – a record – to settle allegations. Sterling’s lawyer said he didn’t, adding the prosecutors “could not identify a single individual” who was wronged. (Since Sterling has had similar allegations made against him in the past, it does make you wonder, though.)
But we’ll never know. The issues won’t get aired out in court because the matter was settled in a nice, quiet back-room deal.
I hate that. We have a perverse system in which prosecutors’ targets – often conspicuous business figures like Sterling – have zero financial incentive to fight any allegation against them. If they lose, they lose big. If they win, they lose a huge amount of money for legal bills and a couple of otherwise productive years. This is your classic lose-lose situation, and it’s why insurance companies typically force business people to settle, which is what happened in Sterling’s case, his lawyer reportedly said.
This situation has bred a fair amount of cynicism in the business community. Business people tend to look on attorneys general and prosecutors as career-burnishing little Eliot Spitzers who file marginal charges against business figures so they can hold up a scalp at a press conference.
There could be a simple solution: The loser pays all court costs and legal fees.
That would provide a little incentive to the prosecutors’ targets – if they’re really innocent – to fight it out and not settle. And the prosecutors, knowing that, would be incentivized to pursue truly solid cases.
And it may give the rest of us a little incentive to stop thinking of the system as perverse.
• • •
I don’t live in Malibu, but I drive through it most days. And I’m telling you, there are times and certain places where it positively reeks.
Of course, the official line in Malibu is that water runoff is the main culprit, not leakage from septic tanks. But my nose tells me it’s sewage I’m smelling. I grant you that my nose is no scientific instrument, but I tend to believe the various surfers, environmentalists and water board folks who contend that sewage has been seeping into the ocean for years.
That’s why Malibu is being forced to install a sanitary sewer system in and near the Civic Center area, or what passes for downtown Malibu. The benefits are obvious: cleaner water, cleaner beaches, a cleaner reputation. Residents and even passers-by like me would be grateful for the chance to roll down our windows and take in some fresh ocean air instead of rolling up our windows to seal out the stench.
But I sympathize with the residents and business owners who presumably would have to pay crushing amounts for any new sewerage. According to reported estimates, businesses will have to pay thousands of dollars, maybe up to $17,000 a month each. (For more, see the article on Page 1.)
Excuse me for being skeptical, but don’t you think those huge amounts are just scare numbers? I’ve got to think that once the engineers are sent back to rework any plan, and sent back a second or a third time to wring out more costs, the numbers will tumble. Once financial people are tasked with figuring how to bring down the monthly payments, the figures will drop further.
The story of whether the Civic Center area will have to get a sanitary sewer system is finished (unless appeals are successful). The story going forward will be how much less it all will cost.
At least, let’s hope so. Those costs are crushing.
Charles Crumpley is editor of the Business Journal. He can be reached at firstname.lastname@example.org.
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