CSI: Art Edition

Forensic scientist Nicholas Petraco, who analyzed ashes in our podcast "The Troubled Cremation of Stevie the Cat," is currently embroiled in a debate about a Jackson Pollock painting. From The New York Times:

On one side stands Francis V. O’Connor, a stately Old World-style connoisseur with a Vandyke beard and curled mustache, who believes erudition and a practiced eye are essential to judging authenticity. Mr. O’Connor, a co-editor of the definitive Pollock catalog and a member of the now-disbanded Pollock-Krasner Foundation authentication committee, said “Red, Black and Silver” does not look like a Pollock.

“I don’t think there’s a Pollock expert in world that would look at that painting and agree it was a Pollock,” Mr. O’Connor said at a symposium this month.

The Telltale Signs of Corporate Fraud

A new working paper (abstract; PDF) by Tanja Artiga Gonzalez, Markus Schmid, and David Yermack looks for the telltale signs of corporate fraud. The paper is called "Smokescreen: How Managers Behave When They Have Something To Hide":

We study financial reporting and corporate governance in 216 U.S. companies accused of price fixing by antitrust authorities.  We document a range of strategies used by these firms when reporting financial results, including frequent earnings smoothing, segment reclassification, and restatements.  In corporate governance, cartel firms favor outside directors who are likely to be inattentive monitors due to their status as foreign or "busy." When directors resign, they are often not replaced, and new auditors are rarely engaged.  Cartel managers exercise their stock options faster than managers of other firms.  While our results are based only upon firms engaged in price fixing, we expect that they should apply generally to all companies in which managers seek to conceal poor performance or personal wrongdoing.

The authors are wise to note that these findings aren't necessarily generalizable, and it is also worth wondering if this method could be applied prophylactically to identify fraud. Note: Yermack is the same man who brought us "Tailspotting: How Disclosure, Stock Prices and Volatility Change When CEOs Fly to Their Vacation Homes."

How to Get a Doctorate in Six Weeks

I assume this is only a coincidence but still, it's a good one.

Shortly after putting out the first half of our "Freakonomics Goes to College" podcast, which included a segment on the market for fake diplomas from counterfeiters and diploma mills, I got the following piece of spam. It appears to be from a Norwegian e-mail domain:

FREAK-est Links, Voter-Fraud Edition

1. Russian election fraud analysis now in English; no matter the language, Putin disagrees
2. Using a natural experiment to find voter fraud in Japan (abstract; PDF)
3. And, not quite voter fraud, but: politicians who cut budget deficits don't necessarily get booted out of office.

Was the Russian Election Fraudulent?

The Times today published a compelling report of first-hand observations of election fraud in Russia's recent parliamentary elections. There are mounting protests; Secretary of State Hillary Clinton voiced "serious concerns" about the election and called for a "full investigation of electoral fraud and manipulation."

But what if those first-hand observations were anomalous? What if the outcome for Vladimir Putin's United Russia Party, as disappointing as it was for him, truly represents the will of the Russian people?

Does Fingerprinting Food Stamp Recipients Save Money?

What do New York City and Arizona have in common? No, this is not a trick question; there is one thing: currently, they are the only jurisdictions in the country that require food stamp recipients to register their fingerprints in an electronic database. California and Texas recently lifted their fingerprinting requirements.

Not surprisingly, this has touched off a debate over social utility and costs in New York. Proponents say that the resulting fingerprint database saves the city millions of dollars a year in duplicate fraud. Last year, the Human Resources Administration said it found 1,900 cases of duplicate applications for 2010, with savings of nearly $5.3 million.

Detractors claim this estimate is unproven and that fingerprinting keeps a certain amount of needy people out of the system through intimidation.

The Bad Man's View: Home Robbery as Opportunity

One of the occupational hazards of teaching law is that I often take what Oliver Wendell Holmes called a “bad man’s view” of human motivation (my beloved spouse just told me this is the understatement of the century). Holmes, in his paradigm shifting “The Paths of the Law,” said :

If you want to know the law and nothing else, you must look at it as a bad man, who cares only for the material consequences which such knowledge enables him to predict, not as a good one, who finds his reasons for conduct, whether inside the law or outside of it, in the vaguer sanctions of conscience.

I find that this cynical tool for legal prediction – which parallels a presumption of narrow economic self-interest – often guides the way I interpret actions and events.

How Can We Stop Handicap Fraud?

A few years ago, a colleague of mine off-handedly mentioned that he "tried not to use" his spouse's disability placard to park in handicapped spaces when she wasn't in the car. Frankly, I was appalled. The implication was that he sometimes succumbed to the temptation to use the placard to park in a handicapped place.

Apparently, he isn't alone.

What Kind of Stories Are the Media Failing to Cover?

Dan Froomkin of the Nieman Watchdog Project interviews William K. Black about the media's underreporting of fraud cases.

Of Prom Dresses and Textbooks

A few years ago, a contracts student of mine left me almost speechless when he admitted in class that he had purchased a tie from J. Press with the intent of returning it after he wore it to deliver a mock oral argument to me (as a mock Connecticut Supreme Court Justice).