The Wall Street Journal (link requires paid subscription) has a front-page story that I expect will be ignored by the mainstream business press (bolds are mine):

Federal prosecutors are investigating one of the nation’s most aggressive class-action law firms, Milberg Weiss Bershad & Schulman, for alleged fraud, conspiracy and kickbacks in scores of securities lawsuits, and could seek criminal charges against the firm itself and its principals.

The three-year investigation focuses on allegations that the New York-based firm routinely made secret, illegal payments to plaintiffs who appeared on securities class-action lawsuits brought by the firm, according to court documents and lawyers close to the case. A grand jury in Los Angeles convened last October has been hearing evidence of alleged illegal payments in dozens of suits filed against oil, biotechnology, drug and chemical companies during the past 20 years, the lawyers close to the case said.

Prosecutors offered a glimpse of the broad investigation in an indictment filed in federal court in Los Angeles on Thursday against a single plaintiff, Seymour M. Lazar, a retired Palm Springs, Calif., entertainment lawyer who is 78 years old.

The charges don’t name Milberg Weiss, but Milberg Weiss officials confirm that it is the firm cited in the indictment. The firm has been told that senior partners alleged to have authorized payments to the plaintiff and the firm itself could face indictment, the lawyers close to the case said.

Milberg Weiss has brought hundreds of class-action cases over 30 years and won tens of billions of dollars in settlements and judgments against businesses. Some corporate and Wall Street executives say the firm exemplifies abuses in class-action litigation that burdens the courts. In Washington, Milberg Weiss has often been cited in Republican-led efforts to curb class-action suits and in congressional debate that led to 1995 legislation to limit securities litigation.

Class-action lawyers said they feared that an indictment of Milberg Weiss could have far-reaching impact and hamper efforts to recover damages for shareholders and consumers. Michael Hausfeld, a prominent Washington plaintiffs’ lawyer, said such a case “could taint private civil enforcement of securities law” and deflect attention from “the egregious corporate misconduct at issue in these suits.”

Last week’s indictment charged Mr. Lazar with fraud, conspiracy, money laundering and obstruction. It alleges that a New York law firm paid “millions of dollars in secret and illegal kickbacks” to Mr. Lazar.

The indictment alleges that Mr. Lazar or a member of his family appeared as a plaintiff in more than 50 Milberg Weiss securities cases during a period running from 1981 to 2004. Mr. Lazar and family members together received more than $2.4 million in secret payments from the law firm, the government charges. During this period, Milberg Weiss earned at least $44 million in legal fees from cases in which Mr. Lazar or a family member was a plaintiff, according to the indictment.

Investigators allege that Mr. Lazar was illegally promised a share in the legal fees that would result from the cases in which he was a plaintiff, according to the indictment. Named plaintiffs in class-action cases can’t have a special interest or concealed inducements beyond others in the class.

The indictment confirms what many public company executives and their legal counsel have believed or known for years: that individuals, in return for under-the-table compensation, have bought minor equity positions in companies for the express purpose of helping a law firm they are cozy with sue if the stock price drops on bad news. I personally know someone who I suspect was doing this for a time; his target was Michael Milken.

Mr. Hausfeld’s crocodile tears about the supposed greater good and corporate evildoers notwithstanding, the actions described are illegal, and support an organized racket that distorts the securities markets, discourages companies from going public, encourages public companies to go private, and in the long run stifles innovation and economic growth.

If Mr. Lazar is guilty, please reserve him a space next to Mr. Rigas of Adelphia, and for an equivalent amount of time. As to Milberg Weiss, if the government can put Arthur Andersen out of business for Enron, the least it can do is disbar and imprison the offending partners for brazenly illegal payments in these mostly frivolous “strike suits.” These suits’ cumulative dollar amounts not only dwarf those involved in Enron, but in most cases are situations where the companies sued did no wrong, and simply paid money to make the problem go away and to avoid years of costly attorney and executive time.
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UPDATE: Forbes.com has stories on the investigation and indictments (plural). I don’t see any others.

As a relative WordPress novice, I can only imagine the difficulties involved in developing and maintaining a blogging platform, so I try to stay out of the bits and bytes.

But Wizbang got me interested about 10 days ago in the evolution of blogging software when he noted how Markos Moulitsas Zuniga, proprietor of The Daily Kos (affectionately known to friend and foe alike as “Kos”) is handling software development.

In October 2003, Kos began using the open-source version of a blogging and publishing program known as Scoop. Since then, he has been enhancing the program. Most curiously to say the least, he has chosen to share those enhancements only with certain left-leaning blogs:

You can’t get the version of Scoop in use at DailyKos - One of the cool features (reader recommended diaries) isn’t in the Scoop available from scoop.kuro5hin.org. In fact as the development page indicated, there’s been very little public activity on the Scoop development site, while sites led by DailyKos have been implementing all sorts of new Scoop features. Why is that, you might ask? It’s because Scoop has become, in effect, a bought and paid for tool of the elite liberal bloggers. Scoop development is occurring, funded by Kos and others, and the by-product of that work isn’t available to you the lowly blogger. There’s nothing wrong with Kos and crew keeping the good stuff for themselves while the open source Scoop stagnates…

Whoa. Stop, right, there, Wiz. I sense an inconsistency in KosWorld.

A Wizbang commenter at the same post confirms and references my suspicions about Kos’s in-the lefty-house development efforts (bold is mine):

Scoop is licensed under the GPL v2.

What Kos is doing with it is within the letter of the GPLv2 but is in violation of the spirit.

Stallman is working on GPLv3 and if this statement from wikipedia–”We’ll put in something to deal with this case of public use on a server the public connects to”–bears out (statement is in italicized section of page under “History”–Ed.), then Kos’s use of Scoop (which can remain licensed under GPLv2) will be in violation of the letter of the GPLv3.

Open source developers would consider Kos’s actions to be sleazy hoarding.

“Fine,” you might say (and Wiz might agree), “what’s wrong with Kos and his cohorts doing the capitalist thing, improving a generic product and using it in a competitively advantageous way to set his blog and other lefty blogs apart from the others? Going further, what would be wrong if he or they ultimately (it’s hard to know at this point) decide to license the improved blogging software to others for profit?”

The problem is that Kos, and perhaps his cohorts, appear to believe in “open source for thee, but not for me.”

Look at how excited Kos was (”The Rise of Open Source”) on February 11 about the growth of the open-source Firefox web browser, and how it leads him to wax rhapsodically about the beauties of an open-source world (posted in full, bold is mine):

I’ve been watching with fascination as Microsoft’s share of the browser market erodes at warp speed to better alternative browsers.

On 12/03/04, Internet Explorer had 67 percent of browsers. Earlier in 2004, IE enjoyed over 85 percent of the market.

As of this post’s writing, IE is down to 55 percent of Daily Kos readers. That number can fluctuate quite a bit over a typical day, so at times IE will drop below 50 percent.

The biggest culprit is the open source Firefox, which has garnered about 25 percent share of the dKos readership in a matter of mere months, with no advertising campaign. That’s pretty cool, and yet more evidence that open source is the way of the future.

What does this have to do with politics? Not much. But as the Propagannon types have shown, dozens (hundreds) of people waging open source journalism can sometimes be more effective than understaffed newsrooms filled with overworked reporters trying to meet deadline.

When I’m asked about blogging’s legacy, I talk about open source. Open source politics, open source activism, open source journalism — the aggregation of thousands on behalf of a common cause. Bloggers and their opinions might be mildly interesting, but the ability to pool our efforts on issues that capture the collective imagination is what really gets me excited.

So it appears reasonable to conclude that Kos believes the following:

• Open source browsers, operating systems, and software–way of the future, good (stated by Kos in a generalized way clearly meant to apply to all software development).
• Open source politics, activism, and journalism–way of the future, good.
• Open source blogging software–”Nope. It’s ours, all ours.”

These positions appear to be at best inconsistent, and at worst hysterically hypocritical.

I’d be open to receiving a coherent defense or explanation from Kos (I have requested a response to this post from him) or someone who believes he or she can stand in for him before removing the question mark from the post title. E-mail me here.
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UPDATE: The footer at the Daily Kos site reads:

“© 2005. Steal what you want. Powered by Scoop.”

Cute. This would appear to be an open invitation to hack and steal “open source” Kos’s upgraded Scoop, doncha think?
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UPDATE 2, July 1, 1 AM: Three unanswered e-mails sent within Kos’s site (which means I registered and everything [eek]). The question mark has been removed. More to come on this subject from another more technical person who is addressing this.
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UPDATE 3, August 20: A person in a position to know tells me in two separate e-mails (the two different paragraphs):

Markos recently reached out to all the other large volume Scoop sites …. in an effort to rally some momentum around the platform before the big traffic rush next year in the primaries. Other than a few introductory emails, I don’t have anything yet. But the intent seems to be to share what’s been improved upon.

We’ll see if words are followed by action. So far, they have not. I’m perfectly happy to call him on the mat if he misbehaves.