BarryLawBlog

According to a December 16 announcement by the U.S. Department of Education, Minnesota, along with eight other states, has been awarded $45 million in federal funding for early childhood education programs. This money was apportioned by the federal Race to the Top program, which provides funding for innovative and effective early childhood education programs. Specifically, Race to the Top funding acts as an incentive for states to improve in the following key areas: helping unsuccessful schools, improving and rewarding school staff, developing data systems to track student achievement and using assessments relevant to students’ future educational and career opportunities. This year, the program paid out $500 million in total (California, Delaware, Maryland, Massachusetts, North Carolina, Ohio, Rhode Island and Washington received the other $455 million). The recipients of the grants will receive their respective funding in installments lasting from 2012 through 2015.

The Race to the Top Early Learning Challenge is one of many federal programs aimed at closing the educational gap between wealthy and poor children by focusing on early childhood education. Programs targeting older students certainly have their place but children who do not have strong educational and behavioral foundations, which are developed in early childhood, are often unable to take full advantage of these later programs. Early childhood programs are thus believed to be not only effective in and of themselves but also instrumental in allowing disadvantaged children to thrive in later programs.

In MN, the Race to the Top grant has been earmarked for improving accountability, providing professional development programs for educators and for expanding the educational opportunities available to low-income children. The MN Department of Education plans to spend $20 million of the federal award in four economically challenged areas. Two of these areas, the Promise Neighborhood in St. Paul and the Northside Achievement Zone in Minneapolis, are part of the Twin Cities region, while the other two areas, the White Earth Reservation and Itasca County, lie in the northern part of Minn. These four regions were chosen based on both their poverty levels and their demonstrated improvements in early childhood programs.

Minnesota businessman Tom Petters has received a lot of press recently for his involvement in a Ponzi scheme that defrauded investors out of billions of dollars. Petters is now bankrupt, leaving his victims searching for alternative sources of compensation. Accordingly, many of his defrauded investors are now turning to clawback lawsuits.

A clawback lawsuit is a civil suit in which unknowing investors in a fraudulent scheme seek to recover monetary losses from those who profited from the fraud. This indirect recovery is used because, as the perpetrators of Ponzi schemes such as the one masterminded by Petters often go bankrupt, it is fruitless to try to recover money from them directly. To recover money in a clawback suit, the plaintiff must show that the defendants knew that the money they received came from fraudulent sources. Defendants may include the perpetrator’s employees, associates, investors and even charities so long as they were aware of the scheme.

Of particular note is the clawback suit brought by Barry Mukamal, the liquidating trustee for Palm Beach Funds in its Petters-related bankruptcy case, against U.S. Congresswoman Michele Bachmann, Bachmann for Congress and Bachmann Minnesota Victory Committee. Bachmann allegedly received money from Frank Vennes, Jr., who has been implicated in Petters’s Ponzi scheme. Vennes worked with the founders of Palm Beach Capital Management to raise money for Petters. Because Palm Beach Capital Management managed the investments of Palm Beach Funds, these investments ultimately went to Petters rather than returning profits to Palm Beach Funds. Vennes and his accomplices received millions of dollars in fees as a result of their illegal activities. Meanwhile, Vennes was contributing to Bachmann’s campaign.

To be successful in court, Mukamal will have to show that Bachmann or her campaign staff was aware of the fraudulent sources of Vennes’s campaign contributions, which totaled over $27,000. Whether enough evidence of such knowledge exists remains to be seen but Mukamal will likely point to the ongoing support observed between Bachmann and Vennes. Even if Mukamal can not ultimately prevail in the Bachmann case, Vennes will not be off the hook. A similar suit has been brought against Minnesota Teen Challenge, Inc. Vennes is a past board member of that organization. In addition, over two hundred clawback suits have been filed in Petters’s bankruptcy case.

With the growing use of cell phones these days, texting while driving is an increasingly common problem on the roads. Like many other states, Minnesota enacted a law banning driver texting in 2008. Since that time, the dangerous practice of texting while driving has increased in MN. In fact, the Minnesota State Patrol reported that the number of tickets given out for texting while driving in 2011 was almost double the number issued in 2010. Talking and emailing from cell phones are also on the rise.

The trend is similar on the national level. According to the National Highway Traffic Safety Administration, approximately half of drivers in their early twenties admit to texting or emailing from their cell phones while driving. The problem appears to be that many drivers do not grasp the severity of distraction that occurs when using a cell phone in the driver’s seat.

Studies suggest that talking on a cell phone or sending text messages while driving can be as dangerous as driving while intoxicated. For example, a study performed by the University of Utah showed that drivers who talked on cell phones, even hands-free ones, while driving had delayed reaction times with regard to applying the breaks and were thereby more likely to get into accidents. Similarly, a Virginia Tech study found that texting increased the risk of crashing by twenty-three percent. Intoxicated drivers, on the other hand, drove more aggressively. Specifically, they tailgated more than their sober counterparts did and hit the breaks more abruptly. While the specific types of driving impairments differed with respect to cell phones and alcohol, both sets of drivers exhibited similar levels of impairment with respect to their ability to drive safety.

Magnetic Resonance Imaging (MRI) studies have helped to explain how cell phone use substantially inhibits one’s ability to drive. MRI is a medical imaging technique that can be used to view softer structures in the body, including the brain. The results of MRI driving studies show that driving unimpeded by distraction results in increased activity of the brain’s spatial awareness region. In contrast, carrying on a conversation reduces that region’s activity by over a third. With a diminished awareness of where their cars are relative to other cars on the road, it is no surprise that drivers who talk, email or text on their cell phones while driving are significantly more prone to accidents.

At a time when many economic analysts are focusing on housing trends and employment data, the Minnesota Pollution Control Agency is finding signs of economic recovery in odd places: MN trashcans. According to the state agency, MN trash production is up four percent this year. Why is this good news?  Judging by historical data, the rate of Minn. refuse production tends to track the strength of the MN economy. For example, trash had been down for the previous two years when the economy was weaker than it is today. While garbage trends are not always predictive of economic trends (e.g. trash generation always spikes around the holidays), they are fairly consistent indicators of consumer activity.

There are a variety of reasons for this correlation. Firstly, when the economy is strong and people feel financially secure, they tend to buy more products. Most products come in packaging, which gets thrown away. Even products that come in recyclable containers, such as boxed goods, often have auxiliary pieces that get thrown away, such as the packing tape on the box and bubble wrap in the box.

Secondly, most people do not recycle their shopping bags even though there are plenty of stores that accept plastic bags for recycling. In fact, only five percent of plastic bags get recycled. Thus, when people buy more, they generate more waste simply by virtue of using more shopping bags.

Thirdly, business tends to generate a paper trail. Even services, which do not involve packaging in the way that goods do, usually produce waste such as receipts, bills, letters and envelopes. While this type of waste is generally recyclable, many people throw it away.

The down side to the increase in garbage is that failing to recycle costs the state money. For example, Mark Rust, who serves as the supervisor of the Minnesota Pollution Control Agency, commented that Minnesotans threw away over one million tons of recyclable items last year at a cost of over $200 million. These items would have provided almost $300 million in value if they had been recycled. Furthermore, recycling creates jobs and adds billions of dollars to the MN economy.