Developer John Kline’s bankruptcy attorney, Jerrold Wanek, should be ordered off the case because he hired a former lawyer in the U.S. trustee’s office, according to a motion filed today in the U.S. Bankruptcy Court for the Southern District of Iowa in Des Moines. The lawyer, Robert Gainer, notified the bankruptcy trustee’s office July 16 that he was resigning to go to work for Wanek beginning Aug. 1. Prior to leaving the office, Gainer had researched instances in which bankruptcy debtors cited their right against self-incrimination in refusing to list assets and liabilities in a bankruptcy filing. Kline has cited the constitutional privilege in withholding detailed financial information, using instead his wife to act as a surrogate in filing the information. U.S. Trustee Habbo Fokkena said in today’s filing that Gainer has privileged information regarding the Kline case, including whether he is the target of a possible U.S. Justice Department investigation. According to the filing, Wanek has refused to step down from the case and has assured the U.S. Trustee’s office that Gainer will not participate in the Kline bankruptcy case.

The Dow Jones Economic Sentiment Indicator (ESI) reached 35.5 in August, the highest level in a year and the sixth consecutive monthly increase. The ESI’s continued improvement lends guarded support to the growing view that the U.S. economy may be moving out of recession and into a period of recovery. The ESI attempts to predict the health of the economy by analyzing stories in 15 major daily U.S. newspapers. It uses a numerical scale from 0 to 100 to express the balance of sentiment in articles about the economy.

A measure of U.S. business activity rose more than forecast in August, adding to signs that the economy may be entering a recovery, Bloomberg reported. The Institute for Supply Management-Chicago Inc. said today its business barometer increased to 50, the highest level since September, from 43.4 in July. Readings below 50 signal a contraction. Automakers are likely to be at the center of a rebound in manufacturing over coming months as assembly lines speed up after the government’s “cash-for-clunkers” plan left dealer lots bare. Increasing demand from overseas and a record reduction in inventories mean a pickup in factory orders and production may last for much of the rest of the year. “The manufacturing sector is sparking back to life,” Avery Shenfeld, chief economist at Canadian Imperial Bank of Commerce in Toronto, told Bloomberg. “It’s not just cash-for-clunkers; auto plants were already scheduled to be coming back online and that creates additional demand for steel and parts.” Economists surveyed by Bloomberg News forecast the index would rise to 48, according to the median of 53 projections. Estimates ranged from 46 to 52.5.

New York Federal Reserve Bank President William Dudley said the central bank has the tools to prevent inflation from accelerating and doesn’t need to begin trimming its balance sheet, Bloomberg reported. His comments put him at odds with two other district bank presidents, who want to pull back on aid. The central bank, seeking to stimulate the economy and unclog credit markets, has created emergency lending programs and doubled the size of its assets during the past year to more than $2 trillion. “Obviously, as financial conditions improve, as the economy does somewhat better, which seems to be the trajectory they’re on, it’s a legitimate point to consider what you want to do in terms of your purchase programs,” Dudley said in an interview on CNBC television. “It’s a little bit premature to be so confident that you want to pull all these things back right now because the economy still isn’t growing very fast and we do have a very high unemployment rate.”

State Sen. Jack Hatch will be the speaker and Ted Williams of the Williams Group will moderate a discussion about health care during the Central Iowa Breakfast, Business & More meeting from 7 to 9 a.m. Sept. 10 at the Holiday Inn Downtown’s Top of the Tower, 1050 Sixth Ave. Cost is $15. Reservations can be made by sending an e-mail to kathleenb2009@hotmail.com or by calling Dawnelle Conley at 284-4913.