Law schools are under attack. Depending upon the source, between 20-50% of corporate counsel won’t pay for junior associate work at big firms. Practicing lawyers, academics, law students and members of the general public have weighed in publicly and vehemently about the perceived failure of America’s law schools to prepare students for the real world.

Admittedly, before I joined academia a few months ago, I held some of the same views about lack of preparedness. Having worked with law students and new graduates as outside and in house counsel, I was often unimpressed with the level of skills of these well-meaning, very bright new graduates. I didn’t expect them to know the details of every law, but I did want them to know how to research effectively, write clearly, and be able to influence the clients and me.  The first two requirements aren’t too much to expect, and schools have greatly improved here.  But many young attorneys still leave school without the ability to balance different points of view, articulate a position in plain English, and influence others.

To be fair, unlike MBAs, most law students don’t have a lot of work experience, and generally, very little experience in a legal environment before they graduate.  Assuming they know the substantive area of the law, they don’t have any context as to what may be relevant to their clients. 

How can law schools help?

First, regardless of the area in which a student believes s/he wants to specialize, schools should require them to take business associations, tax, and a basic finance or accounting course.  No lawyer can be effective without understanding business, whether s/he wants to focus on mom and pop clients, estate planning, family law, nonprofit, government or corporate law. More important, students have no idea where they will end up after graduation or ten years later.  Trying to learn finance when they already have a job wastes the graduate’s and the employer’s time.

Of course, many law schools already require tax and business organizations courses, but how many of those schools also show students an actual proxy statement or simulate a shareholder’s meeting to provide some real world flavor? Do students really understand what it means to be a fiducuiary?

Second and on a related point, in the core courses, students may not need to draft interrogatories in a basic civil procedure course, but they should at least read a complaint and a motion for summary judgment, and perhaps spend some time making the arguments to their brethren in the classroom on a current case on a docket. No one can learn effectively by simply reading appellate cases. Why not have  students redraft contract clauses? When I co-taught professional responsibility this semester, students simulated client conversations, examined do-it-yourself legal service websites for violations of state law, and wrote client letters so that the work came alive.

When possible, schools should also re-evaluate their core requirements to see if they can add more clinicals (which are admittedly expensive) or labs for negotiation, client consultation or transactional drafting (like my employer UMKC offers). I’m not convinced that law school needs to last for three years, but I am convinced that more of the time needs to be spent marrying the doctrinal and theoretical work to practical skills into the current curriculum.

Third, schools can look to their communities. In addition to using adjuncts to bring practical experience to the classroom, schools, the public and private sector should develop partnerships where students can intern more frequently and easily for school credit in the area of their choice, including nonprofit work, local government, criminal law, in house work and of course, firm work of all sizes.  Current Department of Labor rules unnecessarily complicate internship processes and those rules should change.

This broader range of opportunities will provide students with practical experience, a more realistic idea of the market, and will also help address access to justice issues affecting underserved communities, for example by allowing supervised students to draft by-laws for a 501(c)(3). I’ll leave the discussion of high student loans, misleading career statistics from law schools and the oversupply of lawyers to others who have spoken on these hot topics issues recently.

Fourth, law schools should integrate the cataclysmic changes that the legal profession is undergoing into as many classes as they can. Law professors actually need to learn this as well.  How are we preparing students for the commoditization of legal services through the rise of technology, the calls for de-regulation, outsourcing, and the emerging competition from global firms who can integrate legal and other professional services in ways that the US won’t currently allow?

Finally and most important, what are we teaching students about managing and appreciating risk? While this may not be relevant in every class, it can certainly be part of the discussions in many. Perhaps students will learn more from using a combination of reading law school cases and using the business school case method.

If students don’t understand how to recognize, measure, monitor and mitigate risk, how will they advise their clients? If they plan to work in house, as I did, they serve an additional gatekeeper role and increasingly face SEC investigations and jail terms.  As more general counsels start hiring people directly from law schools, junior lawyers will face these complexities even earlier in their careers. Even if they counsel external clients, understanding risk appetite is essential in an increasingly complex, litigious and regulated world.

When I teach my course on corporate governance, compliance and social responsibility next spring, my students will look at SEC comment letters, critically scrutinize corporate social responsibility reports, read blogs, draft board minutes, dissect legislation, compare international developments and role play as regulators, legislators, board members, labor organizations, NGOs and executives to understand all perspectives and practice influencing each other. Learning what Sarbanes-Oxley or Dodd-Frank says without understanding what it means in practice is useless.

The good news is that more schools are starting to look at those kinds of issues. The Carnegie Model of legal education “supports courses and curricula that integrate three sets of values or ‘apprenticeships’: knowledge, practice and professionalism.” Educating Tomorrow’s Lawyers is a growing consortium of law schools which recommends “an integrated, three-part curriculum: (1) the teaching of legal doctrine and analysis, which provides the basis for professional growth; (2) introduction to the several facets of practice included under the rubric of lawyering, leading to acting with responsibility for clients; and (3) exploration and assumption of the identity, values and dispositions consonant with the fundamental purposes of the legal profession.”  The University of Miami’s innovative LawWithoutWalls program brings students, academics, entrepreneurs and practitioners from around the world together to examine the fundamental shifts in legal practice and education and develop viable solutions.

The problems facing the legal profession are huge, but not insurmountable. The question is whether more law schools and professors are able to leave their comfort zones, law students are able to think more globally and long term, and the popular press and public are willing to credit those who are already moving in the right direction.  I’m no expert, but as a former consumer of these legal services, I’m ready to do my part.

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As mentioned during my inaugural post, I spent the last nineteen years in the private sector, most recently as deputy GC and compliance officer for a multinational Fortune 500 company that manages supply chains for other companies.  As compliance officer, I with others spent time in various countries conducting training and risk assessments, interviewing employees in warehouses, assessing our agents and looking for opportunities for bribery, which would subject our company to liability under the Foreign Corrupt Practices Act, the UK Bribery Act and the admittedly under-enforced local laws.

At the same time, I became passionately interested in the struggles in the Democratic Republic of Congo (“DRC”), a country the size of Western Europe and the fifth richest nation in the world in terms of minerals. For those following the news, you may know that the country is set to announce the winner of its hotly contested election either today or tomorrow and there is such fear of violence after the announcement that many of the wealthy are already fleeing the capital.

Notwithstanding its vast wealth, the UN recently designated this former personal colony of Belgium’s King Leopold II, the least developed country and the rape capital of the world. I first learned of these issues via a 60 Minutes piece in which Anderson Cooper described the atrocities perpetrated by Rwandan genocidaires and Ugandan and Congolese rebel forces that control many of the mines containing the minerals necessary to produce cell phones, computers, cameras, electronics and component parts.   Cooper graphically described the use of mass rape as a weapon of war, and noted that 5-6 million people have died during the various wars in the Congo, making it the deadliest conflict since World War II.  I co-founded a foundation to raise money to provide surgeries for rape survivors and to train midwives to reduce the rate of maternal and infant mortality (www.footprints-foundation-org). A number of Hollywood celebrities have joined the large group of activists working to improve conditions in the Congo, most notably the odd couple of actor Ben Afflek and Cindy McCain (John’s wife, who has worked on Congo issues since 1994). Both testified knowledgably and passionately on behalf of their foundation the Eastern Congo Initiative during a Congressional hearing on the Congo last March.

My seemingly unconnected and disparate background as a corporate compliance officer and nonprofit board member became relevant when I learned about Dodd-Frank’s conflict minerals disclosure provision, which has not yet been implemented due to intense lobbying by industry groups and nongovernmental organizations.  The provision requires U.S. issuers to disclose their use of “conflict minerals” (tin, tungsten, tantalum and gold) and describe the measures taken to conduct audits and due diligence of their supply chains with a statement as the “DRC-conflict free” nature of their minerals (this also includes the nine countries surrounding the DRC). The provision also charges the State Department with developing a Conflict Minerals Map and strategy to “address the linkages between human rights abuses, armed groups, mining of conflict minerals and commercial products.” The Comptroller and Secretary of Commerce must provide a list of all known conflict mineral processing facilities worldwide and report on the quality of the private sector audits. 

When proposing the original Congo Conflicts Minerals Act of 2009 which led to Section 1502 of Dodd-Frank, Senator Sam Brownback (R-KS) explained, "metals derived from inhumanely mined minerals go into electronic products used by millions of Americans. In the Democratic Republic of Congo, many people - especially women and children - are victimized by armed groups who are trying to make a profit from mining 'conflict minerals.' The legislation introduced today brings accountability and transparency to the supply chain of minerals used in the manufacturing of many electronic devices. I hope the legislation will help save lives." 

Dubbed a “name and shame” law by a congressional staffer, the SEC provision has no criminal penalties for issuers who use conflict minerals.  Instead, the provision merely seeks disclosure so that the company that uses conflict minerals can face the reputational pressures from an educated public. The public, presumably, will choose to boycott products or divest from companies deemed complicit in the conflicts minerals trade with the attendant rape, kidnapping and child slavery.  Films called “Blood on the Mobile” have gone viral online. Phone apps such as Free World and Free2work --“transparency shopping aids” -- allow you to see the “slavery footprint” of certain products and send a note directly from your smartphone to the company.

In short, the activist community is doing an excellent job shining a spotlight on the estimated 6,000 affected issuers and their hundreds of thousands of suppliers.  Apple and Motorola are obviously subject to the law, but Kraft, which uses tin in its packaging of cookies will have to work with its hundreds of suppliers to ensure compliance. The California Transparency in Supply Chains Act goes into effect in January, and many U.S. universities have announced that they will divest their funds from companies that are not DRC-conflict free.

The SEC will issue its regulations any day now and the State Department has introduced a public-private partnership to work on the issue. An OECD pilot is also underway, although some believe that it will not succeed either because it does not go far enough or because it goes too far.  The legislation will likely be one of the next targets for litigation by the US Chamber of Commerce and other industry groups using the same theories that undermined Dodd-Frank’s proxy-access provisions. A further hurdle for the legislation- a recent independent study from Tulane University found that the SEC had vastly underestimated the proposed costs of compliance. 

Although many of the Republican presidential contenders have promised to dismantle Dodd-Frank, it’s likely that if conflict minerals legislation survives court scrutiny, it will be here to stay.  It would be interesting to hear what Newt Gingrich, who wrote his PhD thesis on the Congo would have to say about that.

I initially felt conflicted about this well-intentioned law because of the unimaginable suffering going on in the Congo, but I was skeptical about the viability and the logistics of actually complying with it. Having conducted audits myself in the past, you never really know if you’re hearing the whole story or seeing everything that you’re supposed to see. None of the countries I visited in my former life had such allegations of corruption, public officials who go for months without getting paid, or known perpetrators of the Rwandan genocide and other rebel groups involved directly or indirectly in the supply chain.

My foundation work in Congo and Rwanda in September, my dialogue with local Congolese including rape survivors and NGOs, US business leaders, and activists on both sides of the debate and my former experience conducting audits confirmed my skepticism, although many want the law enacted immediately. While I don’t doubt the good intentions of the law and the urgency of stopping the rape, child slavery and forced labor, in my next post, I will discuss why I believe that the legislation will likely have serious unintended consequences, may hurt the very people its designed to help, and what Congress and the SEC should have done differently.

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I'm a bit late to this, but this speech by World Bank head Robert Zoellick, a lawyer, ripping into the applicability of economic research to development is pretty interesting.  He's even unsure that randomized controlled trials, the current gold standard, is scalable enough to be useful.  Why is the head of the World Bank denouncing economics?

I am not an economist. Enough said, you may argue. Why meddle? Why open such a Pandora’s Box? For the simple reason that policymakers look to economics, and policymakers in developing countries look to development economics even more. It matters.

Anyway, he wants to make the data collected by the bank, and the tools developed by it, much more open source, which would appeal, presumably, to open source zealots like Yochai Benkler and Matt Bodie.  And he even says that, given that every fast developing country has pushed industrial policy pretty far, that maybe we ought to look again at that bugaboo of free market enthusiasts.  Dani Rodrik is impressed.

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Conglomerate Master Chris Brummer is as close as anyone to international financial law; he sends along the following observations:

Good news from the IMF.  The Executive Board of the International Monetary Fund has approved making financial stability assessments under the Financial Sector Assessment Program a regular and mandatory part of the Fund’s surveillance for members with systemically important financial sectors. By making the FSAP mandatory, the IMF will now examine (on a five year basis) compliance of important financial systems with a variety of international codes and best practices promulgated by international standard setting bodies like the Basel Committee on Banking Supervision, the International Organization of Securities Commissions (IOSCO) and the International Association of Insurance Supervisors.

Although these reforms do not go as far as I have pressed, they do go a long way to speaking to problems under the program that I have addressed before, namely the voluntary nature of the program and the limited scope of financial regulatory surveillance, especially with regards to larger wealthier countries that do not depend on the IMF for emergency financing.   In the future, additional reforms, however, should be considered, including scoring countries with regards to their compliance with international best practices, optimizing the format in which assessments are made (the documents are pretty turgid, to say the least), and robustly publishing the results of assessments for investors and other stakeholders.  But all in all, nice work by the staff, which will more than likely make the “soft law” of international finance considerably “harder” and more consequential.

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The United States Court of Appeals for the Second Circuit just issued its opinion in Kiobel v. Royal Dutch Petroleum, a case involving claims under the Alien Tort Statute for human rights abuses in Nigeria. More specifically, the plaintiffs allege that Royal Dutch and Shell aided and abetted "Nigerian military forces [that] shot and killed Ogoni residents and attacked Ogoni villages — beating, raping, and arresting residents and destroying or looting property." The companies allegedly provided transportation, staging areas, food, and compensation to the Nigerian soldiers. The issue in the case is fundamental: "Does the jurisdiction granted by the [Alien Tort Statute] extend to civil actions brought against corporations under the law of nations?"

The court's answer: No.

The court's rationale: the subject-matter jurisdiction of the Alien Tort Statute is defined by customary international law, and "from the beginning ... the principle of individual liability for violations of international law has been limited to natural persons — not 'juridical' persons such as corporations — because the moral responsibility for a crime so heinous and unbounded as to rise to the level of an 'international crime' has rested solely with the individual men and women who have perpetrated it."

While both the majority and the concurrence in Kiobel recognize a norm of aiding and abetting liability under the Alien Tort Statute, the majority relies heavily on the notion that "no international tribunal has ever held a corporation liable for a violation of the law of nations." Judge Leval observes in a concurring opinion that no tribunal has ever held that a corporation could not be liable for a violation of the law of nations. 

The majority counters this argument in Parts II and III of the Discussion, arguing that customary international law is not established by the logical extension of existing norms, but only by actual practices. As for actual practices, the court leans heavily on the absence of cases imposing criminal liability on corporations as evidence that "corporate liability has [not] attained universal acceptance as a rule of customary international law." While the concurrence questions this approach, the majority offers substantial support for its analysis. 

In the end, the concurrence offers an impassioned argument for corporate liability and wins convincingly in the battle of quotability, but the majority's opinion is more firmly grounded in analysis of authority. Julian Ku observes, "there appears to be no serious argument left that customary international law can impose duties on private corporations."

I suspect that the majority opinion will not put an end to serious argument, but you can judge for yourself.

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Marketplace ran a story on Friday about Walmart's banking operations in Mexico. Glom friend Anna Gelpern has written about the Walmart bank, and she was interviewed for the Marketplace story. I blogged about Walmart's prospects as a U.S. bank here, inspired by my now-colleague Mehrsa Baradaran. The U.S. Walmart bank that Mehrsa and I were imagining bears only a slight resemblance to the Mexican version, which "does not offer car loans or mortgages, but ... offer[s] a credit card so customers can buy Wal-Mart merchandise." By the way, the annual interest rate on the credit card is 60 percent. Still, Anna is sanguine about the development for Mexico, where most of the population does not use a bank:

Whatever the pros and cons of a Wal-Mart bank might be in the United States, they look quite different in an environment where, despite recent growth, there is little credit, no competition, and a fresh history of political, economic, and legal instability. Wal-Mart is among the few actors capable of dislodging the dysfunctional status quo.

Banco Walmart "presents a transnational regulatory dilemma," Anna tells us, and that is the subject of her paper. But Walmart is quickly getting on the map for bank regulators. Earlier this summer, the company opened banking operations in Canada, and Sam's Club has started making small business loans. It looks to me like Walmart is developing institutional competence in banking that will serve it well when it moves on a bigger scale into the U.S.

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I'm back from Canada, which uses law in the service of industrial policy, at least more than does the United States, which it otherwise resembles, and so is an interesting comparative data point.

• Canada used trade policy to industrialize, principally through its auto pact with the United States, and now through its subsidization of Canadair and Bombardier, the export-oriented regional jet and train makers.  The United States, of course, doesn't do this so much.
• Canada regulates its financial sector hard, which means that the sector came through the financial crisis pretty well - but its banks are small, and its sector sleepy.  Was it worth it?
• And, of course, while the US has a chaotic immigration policy, and similar countries like Australia basically don't permit it, Canada embraces controlled immigration.

Is there something to be said for the dirigiste approach?  Canada doesn't look as prosperous as the United States, and specializing in heavy industry while cutting back on finance (and lawyering, for that matter) seems a bit old school.  Still, managed growth and picking winners makes it a pretty unique western country.  Anyway, for the financial market stuff that is probably most interesting to the readers of this blog, Eric Pan and Cristie Ford are good sources.

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Global Corporate Citizenship  ("GCC") emerged in management and business scholarship in the 1990s.  GCC posits that corporations have rights and obligations in society similar to citizens.  It addresses the ethical responsibilities of companies operating in a global market and the values that should guide corporations' engagement with society.   In effect, GCC requires that corporations engage with both financial and societal stakeholders as well as acting as stakeholders themselves. 

GCC is closely related to corporate citizenship (without the “global”).  Corporate citizenship is a business strategy, a voluntary model for business practice that is believed to incorporate core values while simultaneously supporting the pursuit of financial goals.  According to the Boston College Center for Corporate Citizenship, there are four key principles of corporate citizenship: (1) minimize harm, (2) maximize benefit, (3) accountability and responsiveness to key stakeholders, and (4) support strong financial results. 

Theories of GCC infuse the discussion of the role of corporations in society with questions of ethics, morality, and societal values, which are substantially lacking in the scholarly lineage that followed Berle’s line of argument.  (See my earlier Conglomerate post on Corporate Purpose.)  It is inherently interdisciplinary and draws from several fields such as management studies, political philosophy, international relations, sociology, and legal studies.  GCC already plays an important role in the actual business practices of transnational corporations ("TNCs"), goals and agendas of international institutions, and theoretical advancements in academic fields such as management, business, and economics.  

The underlying values of GCC are recognized by an increasing number of corporations and business leaders and many TNCs have incorporated GCC into their business goals and policies.  For example, in 2003 CEOs of numerous TNCs published a joint statement with the World Economic Forum ("WEF").  This statement set out a framework for the implementation of GCC principles in the business context.  Since that time, the integration of GCC into the policies of TNCs has moved beyond the group of companies and CEOs associated with the joint statement.  For example, TNCs have begun including GCC in the portfolios of their in-house counsel and corporations are becoming increasingly engaged in promoting GCC.  

In addition to its integration into business policy and practice, GCC is also becoming institutionalized at the international level and an increasing number of non-governmental organizations are supporting GCC.  For example, GCC is being promoted by international institutions such as the United Nations Global Compact ("Global Compact") and the WEF.   The Global Compact is a public-private initiative that seeks to promote ten principals that focus on human rights, labor standards, the environment, and anti-corruption.  The WEF is a Swiss non-profit foundation that focuses on the equality of values and rules in shaping corporate governance and ensuring that economic progress and social development go hand-in-hand.  Both organizations support the creation of a framework that incorporates values and morals into corporate governance and operations while taking the interests of both financial and societal stakeholders simultaneously into consideration – key elements of GCC.

A body of scholarship on GCC has developed in some academic fields, for example, management and business theory.   In 1997, good GCC was defined as "meeting, within reason, the expectations of all its societal stakeholders to maximize the company's positive impact and minimize the negative impact on its social and physical environment, while providing a competitive return to its financial stakeholders" in a publication funded by the Hitachi Foundation.  Over the past decade GCC has continued to be discussed in the management and business literature.  In the management literature, GCC is used at times as an umbrella to include a range of corporate social responsibility and corporate social accountability initiatives.  The stakeholder model rather than a shareholder model for corporate responsibility has played and continues to play an important role in the management literature.  Recent articles argue that corporations are citizen-stakeholders in the global society and, therefore, they should play a more direct role in the advancement of society.

However, although the question of shareholder versus stakeholder models continues to be debated by legal scholars, GCC theory has received only minimal resonance in the U.S. legal discourse.  GCC has been mentioned briefly in several international law articles in connection with descriptions or discussions of the Global Compact and the Millennium Development Goals.  While some legal articles mention GCC in discussions of Corporate Social Responsibility and human rights, others go further and contemplate the definition a good global corporate citizen or propose regulating accountability for GCC.  A few legal articles briefly mention GCC in discussing how NGOs can strengthen their international roles and the role of NGOs in building global democracy.   Still others briefly mention the role that policymakers have in promoting GCC and how the tax advice of law firms and accounting firms may undermine GCC.  Despite brief acknowledgement of GCC in a handful of legal articles since 2000, there has not yet been an attempt to develop a theoretical framework for GCC in the legal context.

I believe that GCC offers a useful theoretical framework with which to integrate and analyze the interests of both financial and societal stakeholders in this age of globalization and my current scholarship focuses on exploring ways that GCC can inform legal theory and corporate, international, and human rights law.   Voluntary measures are an important way to create and realize behavior that is influenced by societal morals and values.  However, reliance on voluntary initiatives is insufficient to assure the protection of key human rights and societal values.  Although the body of scholarship that has developed in the business and management fields is a promising starting point, I believe that developing a legal theory of GCC offers another perspective from which to approach and, hopefully, make a useful contribution to discussions about how to regulate and govern corporations.   

*The main body of this post is excerpted from my article entitled Toward Global Corporate Citizenship: Reframing Foreign Direct Investment Law, 18 Mich. St. J. Int'l L. 1 (2009), which is available on SSRN here.

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I've had almost enough of end-of-the-year and end-of-the-decade lists.  (Is this a peculiarly American phenomenon?  An attempt to produce some amount of cultural cohesion in a nation of 300 million?)

But not enough to refrain from speculating on what will be the major stories in business law and the legal academy in the next decade.  In my guest posts a while ago, I wrote about how the economic pressures on law firms and legal education will intensify.  Here are two other trends to watch:

1.  Graying boomers continue to rock the boat:  The leading edge of the baby boom will turn 64 this year (and back of the envelope calculations suggest these boomers will be 74 in ten more years).  Like in every previous decade, the boomers will continue to be heard.  Some pundits suggested that the retirement of boomers will create massive demand for new workers (including lawyers and professors) to fill the gap.  Not so fast.  Demand for many services may also shift.  And don't expect boomer to retire on cue.  Anticipate tension in all sorts of places of work as generations grapple with the issue of when the torch will be passed.

In terms of law practice, it would not be at all surprising if employment discrimination, trusts and estates, and elder law see growth spurts.

In terms of social issues, thanks in part to immigration and to Americans having more kids, the U.S. won't deal with the same degree of economic and social challenges that Japan and Europe face.  But there will still be huge issues.

For example, expect the costs and ethics of elder care to become a national issue that dwarfs the current health care debate.  Financial markets may gyrate as boomers reallocate or cash out of investments.  Expect consumer finance to focus on new financial products aimed at the elderly, of which reverse mortgages are just the harbinger.  (In short, my colleague Nathalie Martin will have a full plate this decade.)

2.  We will all be comparativists soon:  Law professors have been stressing the need to incorporate international and transnational issues in the law school curriculum, including in business law, for quite a while.  But I doubt public international law will be as important as giving students some comparative law skills to enable them to work with clients and lawyers across jurisdictions.  Over my time in practice, I think I looked at a treaty only once, but spent quite a bit of time working with lawyers in other jurisdictions.  It was one of the more difficult and fascinating aspects of practice.

Overarching treaties will be less important in corporate and financial law scholarship too compared to the type of bilateral and multilateral cooperation among national regulators that scholars like Chris Brummer and our own Professor Zaring have written about.  To understand whether this cooperation works, we need to know quite a bit about foreign legal systems.

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Next summer I will be teaching a course called "Corporations: U.S. and Transnational Perspectives" in Georgetown Law School's London Summer Program. Since 2001 I have been teaching fairly regularly in summer abroad programs, and I am excited for the opportunity to spend four weeks in London. If you are a student checking out summer programs, here is the flyer for this one.

If you are a young professor thinking about spending a summer abroad, the main reason to refrain is that these programs tend not to leave a lot of time for research. You will teach two hours a day, five days a week. When you aren't teaching, you need to spend time preparing for the next day's class, and that also means that this is not equivalent to a European vacation. 

So why do I do it? The initial incentive was my interest in comparative corporate law and EU studies. Although most of my scholarship and teaching focus on U.S. law, I have done some comparative writing and teaching, and I am interested in doing more. Summer programs usually provide a nice opportunity to study law in a comparative dimension, and they often involve networking opportunities with non-U.S. professors.

A secondary benefit is that family members always accompany me on these trips. Sometimes the whole family goes, sometimes just one or two children. Although the modest stipend that accompanies these gigs is never enough to cover all of our expenses, I am grateful that my children have been able to experience many countries in Europe, as well as Australia and China. (By the way, I have a son who is keen to visit Greece, so if you know of any opportunities there ...) 

Third, even though my days will not be free of labor, many afternoons and evenings, as well as most weekends, are filled with tours, shows, restaurants, etc. We tend to stay close to home base on these adventures, so rather than trying to see all of England, we will spend most of our time right in London. Frankly, I find that experiencing a city in short intervals like this is much more enjoyable than trying to cram in all of the top sights in a few days.

Finally, if I did not love living in the U.S. so much, I would gladly live in Europe, and these summer excursions provide a taste of that life most summers. We always rent a private apartment, condo, or home, and we enjoy shopping at the local markets, riding the public transportation, or relaxing in parks or cafes.

 Just writing all of that makes me anxious for London!

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Well, of course, the United States is not happy, especially if you are Iran, long an opponent.  So one thing that happens is diplomatic - there's an effort to isolate you, to prevent you from obtaining nuclear technology, and always the threat of the use of force. 

But there's also something a bit more administrative and corporate that happens to you.  There is a financial war waged against those you did business with, and the United States has embraced this method as much as any other since 9/11 - I'm generally a critic of the process, but that's for reasons completely unrelated to whether we should be happy about what Iran is up to.

Stuart Levey, the extremely smart lawyer who began government service in the Bush administration, remains in the Obama administration today, and is now one of three undersecretaries in the Treasury Department (that's the notch below the deputy, who is the guy below Geithner) testified to Congress yesterday about what he has been doing about Iran.  Many banks have had to alter their business plans because of Levey, et al., at a minimum as far as reporting to the government.  Other financiers have been encouraged to end their relationships with the country and its subordinates, with, it appears, great success.  Possibly a memorable moment for the repurposing of finance towards American goals.  At any rate, here's the mechanics, in his words:

Beginning in 2006, we developed and implemented a strategy to target Iran's illicit conduct.  We took formal action against many of the specific banks, government entities, companies, and people involved in Iran's support for terrorism and its proliferation activities.  We did so using two powerful Executive Orders, E.O. 13382 and E.O. 13224, that allow us to designate proliferators of weapons of mass destruction, terrorists, and their supporters, freezing any assets they have under U.S. jurisdiction and preventing U.S. persons, wherever located, from doing business with them.  We have designated more than 100 entities and individuals supporting Iran's nuclear and missile enterprises, including the key organizations within Iran, scores of their front companies, Iran's major banks that finance their conduct, and Iran's major shipping line, the Islamic Republic of Iran Shipping Lines, that handles illicit shipments for these dangerous enterprises.  We have also acted against the Islamic Revolutionary Guard Corps, or the IRGC, and several of its companies for proliferation, as well as the IRGC's Qods Force for its role in supporting terrorist organizations.

So that's how the freeze orders work, and how the government pursues international disincentives - apart from trying to persuade the Russians and the Chinese to protest as vigorously as does the United States on these nuclear matters.

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In my first post about Andy Spalding's article, Unwitting Sanctions: Understanding Anti-Bribery Legislation as Economic Sanctions against Emerging Markets, I was unduly restrained in my praise. "Interesting" does not come close to capturing this piece, which is quite provocative in its reconceptualization of the Foreign Corrupt Practices Act. The FCPA Blog did  a much better job of capturing the piece, calling it "a real mind-bender."

Today the W$J is featuring Andy in a story about the FCPA:

Andy Spalding, a Fulbright scholar in India and former securities-fraud lawyer in Washington who is studying the impact of the FCPA in emerging markets, says enforcement of the act might be deterring corporations from investing in developing countries where corruption is rampant and bribes are commonly sought.

If U.S. corporations stop investing in emerging markets, then other nations that anticorruption advocates say aren't as committed to fighting bribery will step up their investments, he says.

As you would expect, not everyone agrees:

That last part is the kicker. Sure, if "all exporting nations" enforce a bribery prohibition, then we are good to go. But what about, say, China? I think Andy has the better of the argument here, casting the FCPA as an inadvertent trade sanction that places the U.S. at a competitive disadvantage. I am hoping for a follow up in which Andy explains what we can do about this mess.

If you haven't already read the piece, take a look and see what you think.

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Andy Spalding is spending the next year as a Fulbright Scholar at the University of Mumbai in India, where he will be studying corruption in international business. His first offering is a reconceptualization of the Foreign Corrupt Practices Act, the Watergate-era anti-bribery statute that many of us touch upon in Business Organizations. In Unwitting Sanctions: Understanding Anti-Bribery Legislation as Economic Sanctions against Emerging Markets, Andy argues that the statute should be viewed as a trade sanction, and that perspective leads to some interesting insights. Here is the abstract:

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I'm thinking through my approach to globalization and getting ready to host the Junior Interntional Law Scholars Association annual conference, today, in the location above, and in conjunction with two great co-hosts.  Jacob Cogan has the details here.

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As I wind down my stint on the Glom with many thanks to my generous hosts and indulgent audience, I am floored at how far I have strayed from the plan.  Two months ago, this was going to be an orderly rollout of brainwaves on somewhat scholarly topics and works in progress.  Two weeks ago, this was going to be an interesting way to practice our countercyclical trade.  But events intervened with way too many notes for my meagher processing capacity.  Paper piles grew, laptop froze, phone, TV and radio talked over one another.  I hereby abandon any attempt at coherence with the following loose parting thoughts:

• Following up on David's post, here is today's word from Anne-Marie Slaughter on regulatory networks in the aftermath of the crisis.  Slaughter highlights the role of the Basel Committee.  At the G-7 press conference this evening, Paulson pointed to the Financial Stability Forum for future regulatory coordination.  Note their April and October reports on "Enhancing Market and Institutional Resilience".
• With deposit guarantees and bank nationalizations proliferating, the question of who is responsible for deposits with foreign bank branches is sure to resurface in many ways and many places.  Iceland's banks in the U.K. are controversy du jour, but it will not stop there.  This old spat between Citi and Wells Fargo over WF's deposits in Citi's Manila branch looks poignant in light of current events:  Citibank, N.A. v. Wells Fargo Asia Ltd. (Citibank I) 495 U.S.660 (1990) and Wells Fargo Asia Ltd. v. Citibank (Citibank II) 936 F.2d 723 (1991).
• As to the executive compensation controversy, EU finance ministers have announced principles of their own here (see pp. 13-14; the whole document is a worthwhile window on the EU crisis response).  It may look general verging on platitudinous, but French Economy Minister Lagarde suggested this morning that at least some national authorities plan rather substantial measures.
• Those interested in circuit breakers may want to take note of broken circuits in Iceland, Indonesia, Romania, Russia and Ukraine this week.  Shutting down stock markets has not done much for confidence so far, but of course who knows how much worse it could have been without, whether this translates to larger markets, etc.  Proving negatives is tricky.
• Bloomberg has a readout of the Lehman CDS auction here.  It will be fascinating to see how the CDS stock affects what happens in bankruptcy.
• There are people who make a living interpreting G-7 communiques (here is today's).  I know not to go there, but refer you to Felix Salmon for the day's accomplishments.  David Wessell called it "theater" on Washington Week -- not a compliment in this environment.  Let us see what the G-20 do tomorrow.
• Morris Goldstein has a lucid take on regulation in the aftermath.  See his recent talk here; video here.
• Further to the mark-to-market controversy, regulatory accounting adventures are crisis perennials. U.S. v. Winstar 518 U.S. 839 (1996) is famous.  My favorite example is this 1989 letter from the SEC to the U.S. Treasury, which allowed banks to reduce developing country debt by 30-50% without booking losses. Download sec.Mulford Letter.pdf (reprinted from Hay & Paul, Regulation and Taxation of Commercial Banks during the International Debt Crisis).

Many thanks and all the best.

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