How Boehner can save his speakership, JPMorgan’s lawyers, and the TV economics of the World Series
Conventional wisdom is that House Speaker John Boehner has been afraid to defy the Ted Cruz-inspired House members who have insisted on closing the government and holding the debt ceiling hostage unless President Obama agrees to delay or defund Obamacare. The assumption is that Boehner fears that the most zealous Republicans in his caucus would turn on him and remove him as speaker. With that in mind, there’s one story I’ve been waiting for and still haven’t seen: Why haven’t the Democrats offered to protect Boehner if he runs into trouble by allowing the full House to vote to reopen the government and extend the debt ceiling?
If you think the speaker of the House is chosen only by the majority Republicans, you’re wrong. Under the Constitution, the speaker is elected by a majority of all the members of the House. Traditionally, the majority party will caucus and choose one of their own as the speaker, for whom all, or most, of the majority party will then vote, assuring that he or she gets a majority of the full House and becomes speaker. (The minority party all votes for their favorite, who of course loses, but becomes the Minority Leader, a post chosen by the party, not the full House.)
But it doesn’t have to be that way. So here’s a scenario Politico, the Washington Post, the New York Times, Roll Call or other news organizations that swarm Capitol Hill ought to explore: To get Boehner to take a more moderate stance, House Minority Leader Nancy Pelosi, with President Obama’s encouragement, could offer Boehner enough Democratic votes to keep him in power through the 2014 Congressional elections, even if members of his own caucus rebel and introduce a motion that he be removed.
Under the House’s rules, if a member proposes the removal of the speaker, it would require a majority vote to pass. So even if more than half of the Republicans wanted to remove Boehner, the Democrats could provide the votes to keep him — which would not be much of a sacrifice for them because they don’t have the votes to put one of their own in the speakership and the alternative would be, by definition, a Republican more to the far right’s liking than Boehner.
Imagine what a sea change this admittedly unlikely development would bring. The leadership of the House would suddenly be less extreme and, in fact, based on a bipartisan coalition.
It would be great if some enterprising reporter could get Pelosi and others to talk about this — asking them why it hasn’t happened, and whether it could.
2. Auditing JPMorgan’s lawyers:
Last week, I saw that JPMorgan Chase had recorded its first quarterly loss under chief executive officer Jamie Dimon because it had reserved a whopping $9.2 billion for legal expenses due to its ongoing regulatory and litigation battles. So, I was all set to suggest a story examining how it could be that legal expenses — even for a giant bank fighting so many battles — are so high. $9.2 billion is about the same as the total gross revenues recorded by the world’s four highest-grossing law firms for all of last year, according to The American Lawyer magazine.
But then on Saturday morning I saw this front page story in the New York Times, headlined, “JPMorgan’s Loss is Corporate Law Firms’ Gain.” So I figured the Times, which assigned not one but two reporters from its DealBook section to the story, had beaten me to the punch.
However, for all its length and reporting firepower, the story has none of the detail — and answers none of the questions — it should. There’s a description of some of the firms doing work for the bank, but there isn’t even an estimate, much less an account, of how much of what the Times referred to as “legal expenses” are actually going to pay lawyers, as opposed to fines and settlements or reserves being taken now for future fines and settlements.
So, someone with a bit more energy ought to take a crack at these mind-blowing numbers, especially given that the bank revealed in the same statement that it has now reserved a cushion totaling $23 billion for “litigation expenses” going forward.
If just 10 percent of that is for lawyers, JPM could be the world’s most lucrative private client ever, making this a huge legal business story.
With much of the rest of the corporate legal market sputtering, has the bank tried to use its leverage to negotiate discounts with the major firms it is using?
Sure, this is all high-stakes stuff justifying hiring the best lawyers around. But there are multiple firms capable of giving Dimon and his team premium representation. Are any offering discounts to edge out the others? Are Dimon and his board pushing for some restraint on costs, or is the bank so besieged with multi-billion dollar claims that worrying about saving a few hundred million here or there is beside the point?
Who’s making these buying decisions at the bank, and does that person have a reputation for bargaining hard with lawyers?
Have any firms offered contingent fees based on how well they stave off the regulators or plaintiffs lawyers? Which single lawyer is billing JPMorgan the highest hourly rate?
Yes, this is hard information to get, but it’s not impossible. It just takes more work than the Times devoted to its overview.
3. Is Rupert Murdoch rooting against a Detroit-St. Louis World Series?
As Detroit and Boston in the American League and St. Louis and Los Angeles in the National League compete this week to get into the World Series, I wish someone would take data from prior ratings and ad sales pricing to tell us how much Rupert Murdoch and 21st Century Fox stand to gain or lose depending on the outcomes. Fox, which will broadcast the series, has to be rooting for Boston and L.A. to beat their smaller-market rivals (who also arguably have less enthusiastic fan bases nationally). But how much does the difference really matter in dollars and cents?
Nailing that story would yield a fun read, as well as an effective primer on the economics of sports broadcasting.
PHOTO: U.S. House Speaker John Boehner (R-OH) arrives at the U.S. Capitol in Washington, October 12, 2013. REUTERS/Jonathan Ernst