G A T A
Howe Lawsuit Survives Hearing On Dismissal Motions
"The case of Howe vs. Bank for International Settlements et al."
-- I like to call it Howe vs. All the Money in the World -- was roughed up a little today but survived its first day of hearing in federal court in Boston.
"During 2 1/2 hours of oral argument, U.S. District Judge Reginald C. Lindsay dismissed two counts of the lawsuit involving securities fraud charges against defendant J.P. Morgan/Chase, and ruled that the plaintiff's method of serving lawsuit notice papers against the BIS -- by mail in English instead of by personal service in German - was insufficient.
"But the two dismissed securities fraud counts were secondary to the lawsuit's substance, and the problem with the lawsuit notice probably can be fixed by a pricey translator if the lawsuit is allowed to proceed.
"The judge took the remainder of the case back to his chambers for drafting a written decision on the plaintiffs' motions to dismiss the rest of the lawsuit. That could take weeks or months.
"The case was called at 2:30 p.m. in a beautiful and huge courtroom in the opulent new U.S. courthouse just across Fort Point Channel from gleaming downtown Boston. About 30 people sat in the audience section at the back of the courtroom, some of them GATA supporters, including a few who had come quite a long way to watch.
"Plaintiff Howe sat alone at the counsel's table on the audience's left. At the counsel's table on the right sat his opponents, nine lawyers representing the BIS, Goldman Sachs, Deutsche Bank, J.P. Morgan/Chase, Citigroup, the U.S. Treasury Department, the Federal Reserve Board, and the New York Federal Reserve Bank. Behind them in the gallery were still a few more defendants' lawyers. The defendants' lawyers seemed to be smirking over their having had to come all this way just to confront a mere pro-se litigant, but they seemed to be smirking less when it was over.
"About two-thirds of the hearing consisted of Judge Lindsay's questioning Howe about the case and its likely weaknesses. The judge was exceptionally well-informed about both the legal technicalities and the broader issues behind them. While he sought to move the hearing along, he also was pretty indulgent in letting Howe explain things.
"The hearing wasn't really about whether the gold market is manipulated. It was about whether there is any basis in law for the suit. Thus it turns on legal issues and technicalities that will interest few of the partisans of gold and free markets -- issues like the very limited circumstances under which the government and government officials may be sued for official acts. But a few observations from this partisan may be of interest:
-- "The judge had trouble seeing in the lawsuit's claims possible
evidence that the bullion banks had conspired with each other
rather than with the federal government, other than what was
called "parallel conduct" -- their doing the same things in
the market at the same times. I thought Howe answered this
well by noting that the bullion bank defendants had issued the
overwhelming majority of gold and interest rate derivatives
and essentially were themselves the markets for those
instruments.
-- "The judge seemed almost obtuse in not understanding Howe's
claim that there was fraud in the BIS' forcibly redeeming the
shares of its private shareholders at less than fair value
when there had never been any indication to the private
that their shares could be taken this way.
-- "One of the lawyers for the government asserted the
government's right, under the laws establishing the Federal
Reserve Board and the U.S. Treasury Department's Exchange
Stabilization Fund, to trade in gold in a way affecting gold's
price. That is, he almost seemed to be claiming, on behalf of
the government, the right to do exactly what the lawsuit
complains of, without actually admitting that this was
happening. (Whether he is right is exactly the legal issue the
suit seeks to settle.) Howe was excellent in rebutting this
claim. He argued that prior to 1974 Congress had fixed the
gold price, but since then has left gold's price to the
market. Thus, Howe said, any government trading in gold cannot
constitutionally aim to fix the price, and certainly not
surreptitiously. (I thought Howe got by far the better of this
exchange, at least establishing a point worth litigating.
Unfortunately I was sitting on the wrong side of the
courtroom. We'll just have to wait to find out what the judge
thinks.)
-- "Howe was just as effective in describing the unfairness of the
BIS' liquidating its private shareholders without recourse and
without arbitration. While the judge at first had wanted to
skip argument on the arbitration issue, considering it
examined adequately in the legal briefs, Howe managed to get
his approval to make one point and then another and another,
and the effect was very strong politically -- it gave the
impression of ordinary small investors getting screwed by
arrogant and powerful people. This happened to be the last
issue discussed, so Howe finished strong, the other side weak.
"When it was over, the courtroom cleared out quickly, and Howe was
left alone at the counsel table packing his books and papers into his
briefcases. Forgive the editorializing, but I couldn't help but think
of the scene at the end of the trial in that wonderful movie, "To Kill
a Mockingbird," when Gregory Peck, playing the quietly heroic defense
lawyer, Atticus Finch, does the same thing, seemingly alone -- and yet
he is not alone, but rather watched by the oppressed people in the
gallery with awe, admiration, and respect for standing up against the
most hateful and vicious power. What I saw today was really not so
different.
"I won't guess what will happen with this case; anything can.
Maybe the essence of what has happened today is that we could have
lost the whole case but didn't. (I spent some time later with Howe and
his business associate, Bob Landis, and, analyzing the day clinically,
almost as a sport, they seemed ready to be hopeful.)
"We still may lose the case on the technicalities in a few weeks
and should be prepared for that.
"But two things:
-- "Enough of the cursed cynicism that the courts are as rigged
as the markets, that there is no fighting the power. We know
some things about market rigging but there is no evidence that
anything in court today was rigged. We got a day in court if
not quite yet OUR day in court. And for all its faults this
remains a country where one brave man pleading his own case
can summon the representatives of all the money in the world
and put the bastards in danger of having to answer for
themselves.
-- "The lawsuit is an important front in our struggle for free
markets and honest dealing but it is not the only front, and,
win or lose here, our strategy and plan will be, in
Churchill's words, KBO: Keep buggering on. Thanks to GATA
Chairman Bill Murphy and Howe and those who have come to
their assistance, we have discovered that the scheme against
gold is only part of a bigger scheme involving interest rates
and currencies to deprive the financial markets of any
standards of value and to expropriate the world for the
benefit of certain Wall Street interests and to make the world
the slave of the U.S. dollar.
"This deeply shames Americans who understand it. That is why they
will continue to oppose it as best they can regardless of what happens
in court. It is an anti-imperialist cause and thus a great cause. And,
as Churchill said, 'When great causes are on the move in the world, we
find that we are spirits, not animals, and that something is going on
in space and time, and beyond space and time, which, whether we like
it or not, spells duty.'"
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
*****************************
CONTACT: Gold Anti-Trust Action Committee
Bill Murphy, 214/522-3411
Fax: 214/522-4432
Email - LePatron@LeMetropoleCafe.com
November 7, 2001
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