Tag: rule of law

“Gangster Government” at Work

With the Obama administration preferring to rely on politics rather than the law to “fix” the auto industry, bondholders have discovered that the new politics of this administration is quite a bit more brutal than the old politics practiced by the Bush administration.

Henry Payne and Richard Burr write of “gangster government” using not just demagogic public attacks on greedy bondholders but apparent threats of regulatory sanction to get its way in bankruptcy court.  They explain:

The holdout debtholders sought the refuge of the courts, where decades of bankruptcy law promised that secured lenders would receive just compensation for their investment. But then Obama called in his fixers.

In his April 30 news conference, Obama singled out Chrysler’s self-described “non TARP lenders” as “speculators” who sought to imperil Chrysler’s future for their own benefit. “I do not stand with them,” Obama thundered. “I stand with Chrysler’s employees and their families and communities… . (not) those who held out when everybody else is making sacrifices.” Michigan Democratic allies like Sen. Debbie Stabenow and Rep. John Dingell piled on, calling the lenders “vultures.”

Then, on Detroit radio host Frank Beckmann’s show May 1, a lawyer for the lenders, Tom Lauria, chillingly revealed how “one of my clients was directly threatened by the White House and in essence compelled to withdraw its opposition to the deal under threat that the full force of the White House press corps would destroy its reputation if it continued to fight.”

Lauria later confirmed the threats came from Rattner and that the target was Perella Weinberg, which had suddenly withdrawn its opposition after the president’s April 30 press conference.

The White House denied the threats, but Business Insider subsequently reported that “sources familiar with the matter say that other firms felt they were threatened as well. None of the sources would agree to speak except on the condition of anonymity, citing fear of political repercussions.”

“The sources, who represent creditors to Chrysler,” continued the Insider story, “say they were taken aback by the hardball tactics that the Obama administration employed to cajole them into acquiescing to plans to restructure Chrysler. One person described the administration as the most shocking ‘end justifies the means’ group they have ever encountered… . Both were voters for Obama in the last election.”

The idea of the White House–with the IRS and SEC at its disposal–threatening investment firms should have sent off alarm bells in America’s newsrooms. Inexcusably, the media establishment largely ignored the hardball tactics. This is the same media that has doggedly reported on President Bush’s U.S. attorney firings and the post-9/11 interrogations of terrorist suspects.

I have no opinion on who should get what as part of Chrysler’s bankruptcy – other than that the taxpayers shouldn’t be paying for America’s version of lemon socialism so common around the world.  But crude political interference by the political authorities in Washington in a bankruptcy case erode the rule of law and administration of justice.  If Obama and company believe that the end justifies the end when it comes to handing the auto companies over to favored interests, who among us is safe from similar action by this or another administration in the future?

Who Will Replace Justice Souter?

You could call it the end of an error.  David Souter, the “stealth justice” who George H. W. Bush nominated mainly to avoid a confirmation battle and who so disappointed conservatives, is finally free to leave a city he never took to and return to his native New Hampshire. 

Little more can be said about Justice Souter. He has always been inscrutable, at first leaning right, shifting toward the middle in the landmark 1992 cases of Planned Parenthood v. Casey (abortion) and Lee v. Weisman (prayer at high school graduation), and ending up at the left end of the Court alongside Justices Stevens, Ginsburg, and Breyer – all the while employing an unpredictable jurisprudential method.  And he has always been reclusive, refusing reporters’ and scholars’ interview requests and being the biggest opponent of video cameras inside the Court.  Perhaps most memorably, Souter gained notoriety after his vote in Kelo v. New London (allowing the taking of a private home for the benefit of a developer) spurred property rights activists to petition for the use of eminent domain to turn his farm into the “Lost Liberty Hotel.”

Speculation now turns to possible replacements, and what President Obama will do with his first chance to fill a seat on the high court.  Will he risk a big political battle on this issue so early in his term, or will he appoint someone more confirmable but less pleasing to his base? 

He is under great pressure to appoint a woman, and the three leading female candidates are new Solicitor General Elena Kagan, Second Circuit Judge Sonia Sotomayor, and Seventh Circuit Judge Diane Wood.  Kagan would be an almost-certain pick a year from now, but having been just confirmed to be the so-called Tenth Justice, she might be seen as too green for elevation.  Sotomayor — because she is Hispanic and despite a mixed judicial record — was the odds-on favorite until the Court took up the employment discrimination case of Ricci v. DeStefano (argued just last week), an appeal of a bizarre opinion Sotomayor joined that denied the claims of firefighters who had been passed over for promotion because of their race.  That leaves Wood, a renowned authority on antitrust, international trade, and federal civil procedure, whose age (58) suggests that this is likely the last vacancy for which she will be considered.  Wood offers a seriousness of purpose and no ideological ax to grind, and is thus the best nominee supporters of constitutionalism and the rule of law can hope for at this time.  (Full disclosure: I took two classes from Judge Wood in law school.)

Does Transparency Inspire Terrorism?

The debate over the Obama administration’s release of the torture memos took an important turn during the past week, as reflected in discussions on the Sunday morning shows.

The economy was the lead story on Fox News Sunday, but in the second segment Chris Wallace led his questioning of Senator Kit Bond (R-MO) as follows:

The Pentagon now says that it’s going to release hundreds of photos of alleged abuse of detainees by U.S. personnel - this, after, of course, the release of the interrogation memos. Senator Bond, how serious is the threat of a backlash in the Middle East and the recruitment of more terrorists, possibly endangering U.S. soldiers in that part of the world?

Revelation! The idea that abusive practices on the part of the United States would draw people to the side of its enemies.

In the media, most of the debate up to now has centered on the tactical question of whether torture works, and to some degree the moral dimension. (Here’s David Rittgers on the former and Chris Preble on the latter.)

There’s an ineluctable conclusion from understanding that torture drives recruitment which endangers our soldiers: It is strategic error to engage in abusive practices. Abuse on the part of the United States adds heads to the hydra.

But wait. Wallace’s question may imply that it is release of the photos - not commission of the underlying offenses - that risks causing a backlash. This cannot be.

Given the governments they’ve long experienced, people in the Muslim and Arab worlds will generally assume the worst from what they know - and assume that even more than what they know is being hidden. Transparency about U.S. abuses cuts against that narrative and confuses the story that the United States is an abuser akin to the governments Arabs and Muslims have known.

Abusive practices create backlash against the United States. Transparency about abuses after the fact will dispel backlash and muddy the terrorist narrative about the United States and its role in the Middle East.

As the question turns to prosecution of wrongdoing by U.S. officials, such as lawyers who warped the law beyond recognition to justify torture, transparent application of the rule of law in this area would further disrupt a terrorist narrative about the United States.

Counterterrorism, Torture, and the Law

Over at The Wall Street Journal, Cong. Peter Hoekstra calls for an investigation into “what the Obama administration may be doing to endanger the security our nation has enjoyed because of interrogations and other antiterrorism measures implemented since Sept. 12, 2001.” Hoekstra implies, or at least clearly believes, that Obama’s renunciation of torture has made the country less safe. Rest assured, when the next attack occurs (and there will be another attack), Hoekstra and other supporters of torture will claim vindication, even though they won’t be able to point to direct evidence that torture would have averted the attack. It is equally impossible to prove a negative – why something does not occur – as it is to prove that an action not taken in the past would have prevented something in the present.

Similarly, former Vice President Cheney claims that the use of techniques such as waterboarding, sleep deprivation, stress positions, and cramped confinement enabled the U.S. government to stop future terrorist attacks, and he has asked the Obama administration to declassify the documents that supposedly prove it. Cheney has previously said that President Obama’s renunciation of torture increases the likelihood that future attacks will be successful.

Of course, Cheney has not asked for the declassification of all information obtained by torture. He presumably doesn’t want the American people to know the countless false positives, the fake leads, the purely bogus information offered up by those being tortured in a vain attempt to halt – or merely postpone – their severe discomfort. (Gene Healy documents a few of these in his recent column.)

Nor can Cheney or Hoekstra prove that the few kernels of useful information obtained under torture could only have been acquired under torture, and not by other techniques, techniques that were consistent with our laws, and that we employed in past conflicts. They can’t prove such claims, because they aren’t true.

In the end, however, this is not a question of whether torture works. Appeals to reason fail when people perceive a danger beyond what reason informs. After all, no reasonable person could logically conclude that terrorism poses an existential threat to the Republic, and yet that false belief continues to shape our conduct. We choose not to consider what has worked in the past because we perceive the past to be irrelevant.

That our actions are driven not by logic but by our fears – visceral, instinctual fears – is understandable. Vengeful actions, while not logical, can be justified in certain circumstances. Would the relatives of those killed in Oklahoma City have been justified in publicly stoning Timothy McVeigh? We could have given a rock – or better yet a piece of rubble from the Alfred P. Murah building – to one family member of each of those killed. The parents of the children killed in the day care center might have been handed particularly large chunks of concrete. Or perhaps the families of the 87 people killed in the Happy Land social club should have been allowed to burn alive Julio Gonzalez, the unemployed Cuban refugee who set the fire? And if we handed a machete to Mariane Pearl – or to Adam Daniel, the son Daniel Pearl never knew – and watched them chop off Khalid Sheikh Mohammed’s head, no one would shed a tear. We might even call it justice.

That we do not resort to such tactics is one of the things that separate us from animals.

In the animal kingdom, might makes right. If the lion can catch the antelope, no higher authority can stop it from devouring his prey. No moral code teaches the lion that he should eat grass instead.

A conscience is not the only thing that separates us from the animals. When our moral compass fails us, when we are blinded by rage and a thirst for justice, law brings us back, or merely holds us back, from doing what our basest human instincts tell us is right and proper.

Since 9/11, many people have framed these laws as a mark of our weakness. Our enemies are not bound by any code, so why should we be? Lincoln suspended habeus corpus believing it necessary to save the Union. FDR approved the internment of Japanese-Americans on similar grounds. It doesn’t matter that neither measure was actually instrumental to saving the Republic from destruction; indeed, the evidence shows that they had no such effect. All that matters is that these men acted in good faith.

Thus is the torture debate at the center of our evolving concepts of executive power, with one side saying that the president is not above the law, and the other side saying that a president (and, actually, not just the president, but anyone in the executive branch) is immune from such laws when he or she believes them to be an impediment to his ability to carry out his duties. It isn’t exactly Frost/Nixon, “when the president does it, that means that it is not illegal,” but it’s close enough.

It is not as high as some people might think, but still forty percent of Americans believe that torture is appropriate in certain circumstances, even though it is clearly against the law. Most of these same people presumably don’t believe that other laws – murder, rape, incest, and human slavery, for example – can be circumvented by presidential fiat. But terrorism is different, so the thinking goes, and fighting it requires us to discard troublesome laws.

The reality is exactly the opposite. Because a central object of terrorism is to induce advanced societies to come loose from their ideological moorings, we must strive even harder to adhere to them. Because terrorists attempt to trick or goad a government founded on certain principles to depart, if only for a moment, from those same principles, our leaders must resist the urge to do so.

On these terms, we haven’t been doing a very good job. We have been circumventing our fundamental principles for seven years, and many Americans think that we should – nay that we must – continue doing it…indefinitely.

It is a sad and sickening spectacle. If we continue down this path – if we cannot call torture for what it is, if we cannot restore an ironclad respect for the rule of law, if we cannot claw back some semblance of separation of powers, with a Congress willing to oppose White House power grabs instead of simply enabling them – then the terrorists will have won.

TLJ: Holder Advocates Some Constitutional Principles

I’m a long-time reader and fan of TechLawJournal. Dogged reporter David Carney produces an amazing amount of content about technology-related goings-on in Washington, D.C. and the courts. Subscription information is here.

I also appreciate his editorial style, which often betrays a dose of concern for civil liberties and healthy skepticism about power. A wonderful example follows, reprinted with permission:

Holder Advocates Some Constitutional Principles
Attorney General Eric Holder gave a lengthy speech at the United States Military Academy in West Point, New York in which he discussed the role of law in “our current struggle against international terrorism”.

It was a plea for adherence to Constitutional principles. However, it was as significant for what he said – about detention of people in places like Guantanamo Bay – as for what he did not say – about interception of communications and seizure of data.

He spoke with specificity about Guantanamo Bay, detainees, and the history of American treatment of detained soldiers and citizens.

But, he said nothing that suggested an intent to reverse, or halt, the deterioration of Constitutional protection of privacy and liberty interests in the context of new communications and information technologies.

Eric HolderHolder (at right) said, “And so it is today, at the beginning of a new presidency, as we face a world filled with danger, that we must once again chart a course rooted in the rule of law and grounded in both the powers and the limitations it prescribes.”

He said that “we will not sacrifice our values or trample on our Constitution under the false premise that it is the only way to protect our national security. Discarding the very values that have made us the greatest nation on earth will not make us stronger – it will make us weaker and tear at the very fibers of who we are. There simply is no tension between an effective fight against those who have sworn to do us harm, and a respect for the most honored civil liberties that have made us who we are.”

This statement could equally apply to government surveillance activities. But, he did not say so. Perhaps Holder intends to speak in a similar speech about surveillance at a later date. Or perhaps, he does not, and his concern for Constitution rights is selective and does not extend to surveillance.

He did make one statement that may pertain to electronic surveillance and data. He said that “many national security decisions must by necessity be made in a manner that protects our ability to gather intelligence, investigate threats and execute wars”.

He did not reference the state secrets privilege, or the government’s assertion of it in legal proceedings involving warrantless wiretaps.

On April 3, 2009, the Department of Justice (DOJ) filed a motion to dismiss and memorandum in support [36 pages in PDF] in Jewell v. NSA, a case against the NSA, DOJ, Holder and officials, arising out of the NSA’s warrantless wiretap program.

The DOJ asserts the state secrets privilege, sovereign immunity, and other arguments, to evade litigation of this case on the merits.

The Electronic Freedom Foundation (EFF) stated in a release that “These are essentially the same arguments made by the Bush administration”.

This case is Carolyn Jewell, Tash Hepting, et al. v. National Security Agency, et al., U.S. District Court for the Northern District of California, San Francisco Division, D.C. No. C:08-cv-4373-VRW.

Ed Black, head of the Computer and Communications Industry Association (CCIA), stated in a release issued in response to Holder’s speech that “It’s disturbing that instead of helping investigate the extent of spying by the Bush administration, the new administration is not just defending those policies, but taking them a step further. In its April court brief (Jewel v. NSA), the Obama DOJ argued that the government is completely immune from litigation for illegal spying and even that it can never be sued for violating federal privacy laws with surveillance techniques. Those arguments sound more like ‘1984’ than 2009.”

Black continued that “President Obama appreciates more than most people how the Internet can be used as a tool to allow greater participation in a democracy. That same tool could also be the greatest innovation for surveillance and repression in the wrong regime. Defending practices like this sets a dangerous precedent down the road and makes it easier for a government to expand the programs from surveilling terrorists to surveilling political opponents.”

“The Obama administration had the courage to change policy on the treatment of terrorism suspects and how they were treated and sometimes tortured”, said Black. “But the abuse of the privacy rights of millions of U.S. citizens is a greater long term threat to the rule of law and the Constitutional rights of all Americans. The failure to allow the full investigation of the surveillance abuse by both the government and major collaborating industry giants would be a tragic betrayal by an administration so many were looking to for greater honesty, openness, and respect for all citizens’ constitutional rights.”

A (Baby) Step in the Right Direction on Gambling

Semi-good news for lovers of civil liberties and the rule of law. PartyGaming, a UK -based internet gambling company, has reached a deal with the Department of Justice. In exchange for a $105m “fee”, prosecution proceedings against PartyGaming will be dropped.

Why am I only partially excited by this development? Although I think that dropping the case is a positive move, PartyGaming withdrew from the U.S. market when the Unlawful Internet Gambling Enforcement Act was passed, so the case against the company (and therefore its punishment) is, in this non-lawyers opinion at least, dubious. The Wall Street Journal alludes to the retroactive nature of the DoJs case here:

After almost two years of discussions, the U.S. Attorney’s Officer for the Southern District of New York has agreed not to prosecute PartyGaming or any of its subsidiaries for providing internet gambling services to customers in the U.S. prior to the U.S. government banning the online gambling industry in October, 2006.” [italics mine]

Aside from their assault on civil liberties, U.S. laws on internet gambling go against the spirit and the letter of WTO law, and undermine the international trading system that has on balance served the United States well (see more here and an FT piece on the announcement here).

Week in Review: Bailout Bonuses, Marijuana and Eminent Domain Abuse

House Approves 90 Percent ‘Bonus Tax’

Sparked by outrage over the bonus checks paid out to AIG executives, the House approved a measure Thursday that would impose a 90 percent tax on employee bonuses for companies that receive more than $5 billion in federal bailout funds.

Chris Edwards, Cato’s director of tax policy studies, says the outrage over AIG is misplaced:

While Congress has been busy with this particular inquisition, the Federal Reserve is moving ahead with a new plan to shower the economy with a massive $1.2 trillion cash infusion — an amount 7,200 times greater than the $165 million of AIG retention bonuses.

So members of Congress should be grabbing their pitchforks and heading down to the Fed building, not lynching AIG financial managers, most of whom were not the ones behind the company’s failures.

Cato executive vice president David Boaz says this type of selective taxation is a form of tyranny:

The rule of law requires that like people be treated alike and that people know what the law is so that they can plan their lives in accord with the law. In this case, a law is being passed to impose taxes on a particular, politically unpopular group. That is a tyrannical abuse of Congress’s powers.

On a related note,  Cato senior fellow Richard W. Rahn defended the use of tax havens in a recent Wall Street Journal op-ed, saying the practice will only become more prevalent as taxes increase in the United States:

U.S. companies are being forced to move elsewhere to remain internationally competitive because we have one of the world’s highest corporate tax rates. And many economists, including Nobel Laureate Robert Lucas, have argued that the single best thing we can do to improve economic performance and job creation is to eliminate multiple taxes on capital gains, interest and dividends. Income is already taxed once, before it is invested, whether here or abroad; taxing it a second time as a capital gain only discourages investment and growth.

Obama to Stop Raids on State Marijuana Distributors

Attorney General Eric Holder announced this week that the president would end federal raids on medical marijuana dispensaries that were common under the Bush administration.

It’s about time, says Tim Lynch, director of Cato’s Project on Criminal Justice:

The Bush administration’s scorched-earth approach to the enforcement of federal marijuana laws was a grotesque misallocation of law enforcement resources. The U.S. government has a limited number of law enforcement personnel, and when a unit is assigned to conduct surveillance on a California hospice, that unit is necessarily neglecting leads in other cases that possibly involve more violent criminal elements.

The Cato Institute hosted a forum Tuesday in which panelists debated the politics and science of medical marijuana. In a Cato daily podcast, Dr. Donald Abrams explains the promise of marijuana as medicine.

Cato Links

• A new video tells the troubling story of Susette Kelo, whose legal battle with the city of New London, Conn., brought about one of the most controversial Supreme Court rulings in many years. The court ruled that Kelo’s home and the homes of her neighbors could be taken by the government and given over to a private developer based on the mere prospect that the new use for her property could generate more tax revenue or jobs. As it happens, the space where Kelo’s house and others once stood is still an empty dustbowl generating zero economic impact for the town.

• Daniel J. Ikenson, associate director of Cato’s Center for Trade Policy Studies, explains why the recent news about increasing protectionism will be short-lived.

• Writing in the Huffington Post, Cato foreign plicy analyst Malou Innocent says Americans should ignore Dick Cheney’s recent attempt to burnish the Bush administration’s tarnished legacy.

• Reserve your spot at Cato University 2009: “Economic Crisis, War, and the Rise of the State.”