Archives: 05/2013

Applying the Fourth Amendment to International Travelers

I regularly cross America’s borders, so I’m happy that a new court ruling will make it harder for border agents to search and seize travelers’ computers.

In 1886, the U.S. Supreme Court essentially exempted border searches from the Fourth Amendment.  Only in the most extreme cases, such as detaining or strip-searching a traveler, is “reasonable suspicion” of criminal conduct necessary.

Only once in decades of travel have I been forced to hand over my computer.  But thousands of other Americans have had to do so over the years, and it is much worse when the government takes the computer for a “forensic” review elsewhere. 

However, in April, the Ninth Circuit Court of Appeals ruled, in U.S. v. Cotterman, that while a simple search involving a quick review of a laptop likely is constitutional, a more detailed review “transformed [the search] into something far different.”  Thus, “reasonable suspicion” was required.

The dissenters complained about treating differently someone who hid digital child pornography on his computer and “hid” printed child pornography in his briefcase.  But as I pointed out in my new Forbes online column, there are important differences:

One is that international travelers know their belongings are subject to visual search.  A briefcase and printed materials also are inherently less secure against private snoops as well as government investigators than password-protected computer files.

Moreover, as the appellate majority observed, “The amount of private information carried by international travelers was traditionally circumscribed by the size of the traveler’s luggage or automobile.  That is no longer the case.  Electronic devices are capable of storing warehouses full of information.”  While it is easy to separate the business and personal as well as the innocent and incriminating among personal effects, it is not so easy to similarly divide computer files.  Concluded the judges:  “A person’s digital life ought not be hijacked simply by crossing a border.”

Very true.

Of course, Cotterman’s offenses were horrid.  But the court concluded that “Reasonable suspicion is a modest, workable standard that is already applied.”

Catching criminals is important.  However, it is a free society that we are protecting.  Traveling internationally should not require sacrificing one’s basic freedoms.

First They Came for My Coke, Then They Came for My Jack

Not satisfied with hounding smokers and purveyors of Big Gulp sodas – or even gun manufacturers – nanny-staters have reached way back into their historical toolkits to go after alcohol. That’s right, in this the 80th year since the repeal of Prohibition, a new coalition has arisen to take on the scourge of demon rum.

But these aren’t your great-granddaddy’s Baptists and bootleggers; instead we have a transnational alliance of “public health professionals” out to make the world a more sober place.  Not satisfied with the persuasiveness of their entreaties, however, they further want to muzzle alcohol producers and anyone else with a “stake” in the debate.  (Apparently limiting the freedom to drink isn’t enough for these people; the freedom of speech and to petition the government for redress of grievances are also suspect.)

Here’s Exhibit A, a “statement of concern” put out in February by a group of public health advocates calling themselves the Global Alcohol Policy Alliance.  In a nutshell, GAPA doesn’t like the fact that the beverage alcohol industry is involved in the debate on how to reduce alcohol abuse, not even the commitments that 13 of the largest alcohol producers made in support of the World Health Organization’s “Global Strategy to Reduce the Harmful Use of Alcohol.  The most revealing “reservation” the GAPA-niks have is item 3 on page 3:

Prior initiatives advanced by the alcohol industry as contributions to the WHO Global Strategy have major limitations from a public health perspective …

That sounds rather innocuous – an academic disagreement about alcohol policy – but let me put this in context.  The public health community consistently advocates “population-based” controls that simply seek to reduce total alcohol consumption, regardless of whether alcohol abuse declines.  There could be cirrhotic ne’er-do-wells dying in the streets, but as long as yuppies buy less Jack Daniel’s, all is fine.  The alcohol industry, or anyone that cares about actually fixing social problems rather than taking steps that at best just make politicians feel good – call it the inverse Baptists/bootleggers – prefers a targeted approach: keep booze away from kids, get alcoholics treatment, don’t drink bad moonshine that’ll make you go blind, etc.

About Farm Bill “Reform”

I have a new Free Trade Bulletin out today that pours all manner of scorn on the notion that the farm bills passed out of the House and Senate agriculture committees last week in any way represent decent reform. The FTB comes just in time for a farm-bill-themed Hill Briefing tomorrow. I cannot attend the briefing, unfortunately, but my colleague Chris Edwards will be there to give ‘em hell, as will our friends from the Environmental Working Group, Taxpayers for Common Sense, and the R Street Institute. Sterling fellows all. 

Congress still – despite record deficits, high commodity and farmland prices, and a growing sense that the country is headed in the wrong direction – refuses to have a fundamental debate about the appropriate role of the federal government in farm and rural affairs (my two cents: none). They’re too busy squabbling about how to divide the spoils between North/Midwest and South, and rural vs. urban interests. America deserves better.

Trade Agreements Can’t Do Everything

Last week, I expressed some skepticism about whether trade negotiations could help convince the EU not to be so cautious about approving genetically modified foods. Along the same lines, I came across the following Bloomberg article:

Wall Street Seeks to Change Dodd-Frank Rules Via Trade Deals

U.S. bankers and insurers are trying to use trade deals, which can trump existing legislation, to weaken parts of the Dodd-Frank Act designed to prevent a repeat of the 2008 financial crisis.

So the first thing to point out is that it’s not really accurate to say that trade deals “trump existing legislation.”  But yes, you could negotiate a trade deal that created an international legal obligation that would have some impact on domestic policy.

Let me put the nuances of the interntional law-domestic law relationship aside, though, and say something about the focus of trade agreements.  As noted in the GM foods post, I think trade agreements are most useful when they focus on protectionism.  So, if the goal with regard to financial regulation is to prevent discrimination against foreign providers of financial services, trade agreements could help with that.

By contrast, if the objective is to remove the burden of financial regulations more generally (and the article is a bit vague on the substance of what’s at issue), I’m not sure trade agreements are the place to go.  There seems to be a tendency in recent years to have trade agreements take on any issue that has even a tenuous relationship to trade.  In my view, if we go that route, we are unlikely to have any trade agreements at all.

Instead, for domestic regulatory issues, I would rely on the domestic policymaking process, and the arguments of people like my colleague Mark Calabria.  Problems with Dodd-Frank are not going to be solved in the backroom by trade negotiators.  They are only going to be solved by a vigorous public debate over what constitutes sensible policy.

Campaign Restrictions Lead to Due Process Violations, Even in Local Politics

Most times when I write about campaign finance laws, the context is a presidential race or Supreme Court case.  But these restrictions on political speech – the protection of which is the main purpose of the First Amendment – abound in local politics and state courts even without FEC intervention or presidential finger-wagging.

Here’s a case from California that literally just came across my transom:

Last year, John Mlnarik ran for Santa Clara City Council.  Mlnarik is the sole shareholder of a small business, a law firm with seven employees – a fact revealed in several mandatory campaign disclosures.  Because his money is partly tied up in his business, along with two personal loans to his campaign he also made a third loan (for about $6000) via his business.  He fully disclosed the loan and its source.

More than three months later, after the election, the City of Santa Clara issued a citation against Mlnarik for receiving an excessive loan “from a third-party source.”  Yet the City Code also states:  “For purposes of the contribution limits … [a]n individual and any corporation in which the individual owns a controlling interest, shall be treated as one person … . Nothing … shall prohibit a candidate from making unlimited contributions to his/her own cam­paign.”  And under state law incorporated into the City Code, an individual’s income includes his business’s income; an individual’s real property includes his business’s real property; and an individual’s investments include his business’s investments.

Given this logical overlay, and the fact that his sole ownership and the loan’s source were both fully disclosed, Mlnarik thought he was following the law.  After all, as the Supreme Court reiterated in 2008, “the use of personal funds … reduces the candidate’s dependence on outside contributions and thereby counteracts the coercive pressures and attendant risks of abuse to which … contribution limitations are directed.”  (Davis v. FEC, quoting Buckley v. Valeo).

The City, however, cited the following from its Code:  “[U]nless a term is specifically defined in this chapter, or the contrary is stated (or clearly appears from the context), the definitions set forth in [a portion of the State Government Code] shall govern the interpretation of the provisions of this chapter.”   The State Code, in turn, includes a 192-word definition of “candidate,” which – along with many other possible definitions – states that “ ‘Candidate’ means an individual who is listed on the ballot.”  Thus, while Mlnarik was free to make unlimited loans to his campaign, he supposedly violated the law by making a campaign loan via his wholly owned business, which itself wasn’t a “candidate.”

Mlnarik argued that the City law was unconstitutionally vague – after all, how is one to know whether a term’s contrary meaning “clearly appears from the context”?  (If it does, then the State law’s definition of “candidate” must not be used – and there would be no case against Mlnarik.)  As noted above, the “context” was a law that repeatedly makes an equivalence between a person and his or her business; moreover, the law has eight statutory purposes, three of which (Mlnarik argued) were actually advanced by allowing sole business-owners to contribute to their own campaigns via their business, while none of the eight purposes was thwarted.  If that’s not the contrary “clearly appearing,” what is?

Nevertheless, the City refused to drop the case, and the trial judge denied that the phrase “the term[’s] … contrary … clearly appears from the context” was unconstitutionally vague (in a quasi-criminal case!).  Mlnarik is now attempting to appeal further, but he has been warned that state law may not permit an additional appeal – even though his constitutional argument couldn’t be heard by the administrative hearing officer, and thus has been heard only once, and then only by one judge.

So not only is there an underlying First Amendment violation, but there are due process infringements squared or cubed.  And all this because a candidate for office “loaned himself” $6,000 and fully disclosed all aspects of the transaction.

You can’t make this stuff up!

Washington’s Range of Policy Options

Ezra Klein writes in the Washington Post that congressional Republicans have moved to the right on such issues as health care, stimulus spending, and a carbon tax, forcing Democrats to move to the center to find common ground. And thus:

If you imagine a policy spectrum that that goes from 1-10 in which 1 is the most liberal policy, 10 is the most conservative policy, and 5 is that middle zone that used to hold both moderate Democrats and Republicans, the basic shape of American politics today is that the Obama administration can and will get Democrats to agree to anything ranging from 1 to 7.5 and Republicans will reject anything that’s not an 8, 9, or 10. The result, as I’ve written before, is that President Obama’s record makes him look like a moderate Republicans from the late-90s.

His argument is that Mitt Romney and Newt Gingrich used to support “the basic architecture of the Affordable Care Act,” John McCain (R-AZ) supported a cap-and-trade bill, George W. Bush pushed a stimulus bill in 2008—but now Republicans don’t want to support any of those policies. So, he says, Democrats have moved to the right, away from what they really want, like single-payer health care, command-and-control environmental regulation, and no cuts to entitlements plus massive new spending. He says that leads to center-right policy.

But another way to look at it is this: on his scale of 1 to 10, where 1 represents bigger government and 10 represents smaller government, what’s happening? Is government getting bigger or smaller? Take health care: if 1 represents national health care and 10 represents a free market in health care, then surely with income tax preferences for health insurance, Medicare, the prescription drug benefit, and government paying for more than half of all health care, we were at least at 5 by 2009. Everybody from Michael Cannon to Joe Biden thinks Obamacare is a BFD on the road to total government control of medicine. So let’s say it put us at 3 or 4.

You can see the same pattern in the other issues Klein discusses. Carbon tax, cap and trade, stimulus spending—they all make government bigger than it is now. So when Republicans endorse any of those policies, they are playing on bigger-government territory. Now, Republicans say they’re not going to do that any more. So Klein’s complaint is not really that Republicans are insisting on “8, 9, or 10” policies; they’re just no longer proposing policies in the 3 and 4 range, hoping that Democrats will agree to make government only a little bigger, rather than way bigger. Sounds like maybe the debate is moving back toward the 50-yard line, instead of taking place entirely in Democratic territory.

Note: Klein talked only about economic issues, so I’ve done the same. There’s a clear trend in a liberal/libertarian direction on social issues such as marriage and marijuana. And Republicans who propose further restricting immigration or getting involved in yet another Mideast war are hardly advocates of small government. This analysis deals only with fiscal, regulatory, and entitlements issues.

The IRS Has Already Abused Its Powers under ObamaCare

Over at Bloomberg, National Review’s Ramesh Ponnuru writes about the Obama administration’s disregard for the rule of law, including the IRS’s $800 billion power grab:

The Patient Protection and Affordable Care Act, the sweeping health-care law that Obama signed in 2010, asks state governments to set up health exchanges, and authorizes the federal government to provide tax credits to people who use those exchanges to get insurance. But most states have refused to establish the online marketplaces, and both the tax credits and many of the law’s penalties can’t go into effect until the states act.

Obama’s IRS has decided it’s going to apply the tax credits and penalties in states that refuse, even without statutory authorization. During the recent scandal over the IRS’s harassment of conservative groups, many Republicans have warned that the IRS can’t be trusted with the new powers that the health law will give the agency. They are wrong about the verb tense: It has already abused those powers.

For more, read my article (with Jonathan Adler), “Taxation Without Representation: The Illegal IRS Rule to Expand Tax Credits Under the PPACA.”