Topic: Law and Civil Liberties

Carping about TARP

In its story yesterday about Obama pushing for release of the second half of the TARP boodle, the New York Times reported that

Lawmakers are angry about many aspects of the  bailout, which they intended for the government purchase of troubled assets, particularly mortgage-backed securities, but instead has been used  to recapitalize banks and even prop up failing Detroit automakers.

Initially, I had a lot of sympathy for this critique.  I had a little burst of outrage myself right before Christmas when I read the following quote from White House spokesman Tony Fratto, explaining why the White House was going to use the TARP authority to bail out GM and Chrysler–despite Congress’s having just voted down the auto bailout:

“Congress lost its opportunity to be a partner because they couldn’t get their job done,” Fratto said. “This is not the way we wanted to deal with this issue. We wanted to deal with it in partnership. What Congress said is … ‘We can’t get it done, so it’s up to the White House to get it done.’ “

So by not giving the president the power to bail out the automakers, Congress has “lost its opportunity to be a partner,” and the president’s going to do it anyway?  By what authority?  The TARP statute gives the Secretary of the Treasury the power to buy “troubled assets” from “financial institutions.”  Yet in the past three months TARP’s morphed from a plan to buy toxic mortgage-backed securities, to one that involves buying shares in banks (like Wells Fargo ) that aren’t themselves troubled, to a program giving loans to car companies, which surely can’t qualify as “financial institutions.”

More Bush administration lawlessness, I thought.  We already knew they didn’t care about the Constitution.  Now they’re showing they can’t be restrained by plain statutory language. 

And then I looked at the statute.  And it turns out the definitions of “troubled asset” and “financial institution” are so gobsmackingly, irresponsibly broad, that the administration has at least a colorable argument that it can legally reshape the bailout in the ways it has. ”Troubled assets” include:

any… financial instrument that the Secretary, after consultation with the Chairman of the Board of Governors of the Federal Reserve System, determines the purchase of which is necessary to promote financial market stability 

And “financial institution”:

means any institution, including, but not limited to, any bank, savings association, credit union, security broker or dealer, or insurance company, established and regulated under the laws of the United States or any State, territory, or possession of the United States [emphasis added]

That’s why, as the University of Chicago’s Randy Picker argues, you can probably “fit cars under the TARP.” (For a contrary argument, see here ).

Given how far the administration has pushed loose legislative language in the past, can Congress credibly claim to be surprised here?  Lawmakers may, as the Times reports, be “angry” about the scope of the bailout, but when they write language that broad, their outrage is more than a day late and $700 billion short.

Questions for Mrs. Clinton

Hillary Clinton is expected to have a smooth confirmation hearing today. Bizarre. If we had more citizen-legislators instead of professional politicians, some of the following questions would be asked at today’s hearing:

Did you request, or see, any of the hundreds of FBI files that were improperly acquired by the Clinton White House? Who hired Craig Livingstone anyway?

Why did you fire Billy Dale?

What is your view of the war power? Can (Should) the President attack another country without a declaration of war from the Congress?

What is your view of the Tenth Amendment? Is there any subject beyond the purview of a federal law or spending program?

Exactly what did you and your Husband take from the White House when you left?

Did you or your husband make any arrangements to get money to Susan McDougal since Bill left the White House? Do you know why she was pardoned?

Do you plan to hire Sandy Berger?

To revisit Clintonian policies and practices, go here and here.

Obama Meets Calderón

When president-elect Barack Obama meets Mexico’s Felipe Calderón today, he will be presented with a problem that went largely ignored during the last campaign season: the dramatic increase in drug violence in México. Last year, more than 6,000 people were murdered as a result of clashes between drug-trafficking gangs and the Mexican police and army. The violence is starting to spill across the border into the United States.

Instead of insisting on the prohibitionist strategy that Washington has pursued for decades in the region, President Obama should discuss with Calderón and other Latin American leaders alternatives that aim to reduce the pervasiveness of drug-related violence and corruption in drug production and drug transit countries. Only drug legalization will ultimately end the destabilizing effects of prohibition in this important U.S. neighbor.

Supreme Court Makes It a Little Interesting

The common refrain this Supreme Court term is that, after several years of blockbuster cases—race-based school assignment, partial-birth abortion, the rights of Guantánamo detainees, the D.C. gun ban, etc., etc.—this year the Court is giving the front pages a break. Indeed, as we celebrated the advent of 2009, the only cases guaranteed to make it into the Cato Supreme Court Review were a drug regulation case (Wyeth v. Levine) and one involving the detention of a civilian in the United States as an enemy combatant (Al-Marri v. Pucciarelli). Almost all the cases garnering media and scholarly attention would have been after-thoughts in previous years.

On Friday, however, as it rounded out its docket for the term (no more than a handful more will be added to the list of cases to be argued and decided before the Court recesses in June), the Court gave us four fascinating cases to chew on:

Northwest Austin Municipal Utility District Number One (“NAMUDNO”) v. Mukasey

This is a challenge to the requirement of section 5 of the Voting Rights Act that certain state and local governments, mostly but not entirely in the South, obtain “preclearance” before making any changes affecting voting. A small (3,500 residents) utility district in Austin, Texas, argues that it has never been accused of voting discrimination or other irregularities and should not have to seek federal permission to, for example, move the location of a polling place or coordinate voting for its board with other county or state elections. You may recall that the latest extension of the VRA, in 2006, did not pass without some controversy. Indeed, in our federal system, should certain jurisdictions still be under the Justice Department’s thumb over 40 years after the demise of Jim Crow (and to this extent of micromanagement)?

Ricci v. DeStefano

A group of firefighters (19 white, 1 Hispanic) allege that New Haven city officials racially discriminated against them when they refused to certify the results of two race-neutral promotional exams that yielded racially disproportionate results (i.e., a much higher percentage of whites and Hispanics qualified for promotion than did blacks). As offensive as the facts of the case are, the way that the Second Circuit—a panel including oft-mentioned Supreme Court contender Sonia Sotomayor—summarily dismissed the petitioners’ appeal is even more disconcerting. When the full court voted 7-6 not to rehear the case en banc, Judge José Cabranes (a Clinton appointee) excoriated his colleagues, concluding that “[t]his perfunctory disposition rests uneasily with the weighty issues presented by this appeal.” I won’t get into the weeds of legal analysis here, but Ed Whelan has two excellent posts discussing the Second Circuit shenanigans over at NRO and Stuart Taylor last month wrote a typically hard-hitting piece on it for the National Journal. But again, however the Supreme Court decides this one, it has already provided a potent line of attack on Judge Sotomayor when the next vacancy arises on the high court.

Republic of Iraq v. Beaty

This case asks the simple question of whether U.S courts have jurisdiction over claims regarding misdeeds committed by the Saddam Hussein regime—or whether today’s Iraqi government can assert sovereign immunity. This simple question actually involves the interplay of a host of legislative and executive action that the Court will have to wade through. Beaty joins the Eurodif (international trade, about which I wrote here) and Elahi (treaty enforcement) cases as this year’s leading contributions to the Court’s international law jurisprudence.

Horne v. Flores

Taking up a complicated conflict between the No Child Left Behind Act and earlier legislation, this is the term’s leading education case. The main issue is whether a state, in this case Arizona, which complies with NCLB on English language instruction can still be violating the funding requirements for such instruction imposed by the Equal Education Opportunity Act of 1974. The Ninth Circuit declined to modify an eight-year-old injunction requiring Arizona to spend millions on this instruction and imposing millions in fines. It’s a highly technical case but one with significant ramifications for a key part of President Bush’s domestic policy legacy.

Despite these four grants, however, it is still safe to say that Court shied away from many, many cases that should interest readers of this blog—not least the patent/abuse of state sovereign immunity case called BPMC v. California, which I had earlier urged the Court to accept for review.  I will be commenting further at least on NAMUDNO and Ricci when the Court hears argument and decides them.

The Measure of Our Own Liberties

As you may have heard, the Supreme Court recently granted certiorari to Ali Saleh Mohamed Kahlah al-Marri. The unclassified version of the evidence against him is available in the Rapp Declaration. It reads like a movie plot; I recommend it to you.  

Background

After the 9/11 attacks, the FBI arrested al-Marri, an exchange student at Bradley University in Peoria, Illinois. The government indicted him for using false identification, bank fraud, giving false statements to the FBI, and possession of counterfeit credit card numbers. The government alleges that al-Marri met with Osama Bin Laden, was working with senior Al Qaeda organizers, has a more-than-casual interest in poisons, and was told by his handlers to be in America before September 11th or to forget about executing his mission here. 

Before al-Marri began trial, the government removed him to military custody and asked that the charges against him be dismissed with prejudice (meaning that they cannot be re-filed upon his release). He has since remained in a naval brig in South Carolina. He holds the distinction of being the only domestically detained enemy combatant in U.S. custody.  

The Fourth Circuit heard his habeas claim, releasing a fractured opinion. The panel found, 5-4 on each issue, that (1) the government can detain al-Marri as an enemy combatant; and that (2) al-Marri is owed more process to contest his status as an enemy combatant. 

Wrong on the Law

What happens to al-Marri is important because, according to Bush administration attorneys, the treatment he gets is what any American citizen would get if detained by the government as an enemy combatant. Congress did not give the president domestic carte blanche in the Authorization for Use of Military Force (AUMF) passed after 9/11. Detention of al-Marri as an enemy combatant is directly contrary to Senate rejection of proposed domestic military powers and Patriot Act provisions providing for temporary detention of “terrorist aliens.” 

The Supreme Court should reject this watering down of our essential civil liberties. Judge Motz of the Fourth Circuit does the math for us at page 45 of the Fourth Circuit’s opinion. Four justices (Stevens, Souter, Breyer, and Ginsburg) found in Rumsfeld v. Padilla that the AUMF “does not authorize … the protracted, incommunicado detention of American citizens arrested in the United States.” Justice Scalia filed a dissenting opinion in Hamdi v. Rumsfeld, holding that absent a suspension of the writ of habeas corpus, citizens cannot be held domestically as enemy combatants and must be tried in civilian courts. 

Wrong on Policy

The course we have taken with al-Marri is as wrong on policy as it is on the law. Rather than give suspected Al Qaeda operatives the opportunity to play the martyr and wage propaganda warfare against us, we should be putting them in their proper place. Nobody’s heard from or cared about would-be shoe bomber Richard Reid since his conviction. He received the life sentence he deserved and we all went on with our lives. As Judge William Young said at Reid’s sentencing, “we all know that the way we treat you, Mr. Reid, is the measure of our own liberties.”

The future of counterterrorism policy will be discussed at Cato’s upcoming conference, Shaping the Obama Administration’s Counterterrorism Strategy. Click here for more information.

BART Shooting

There was a police shooting on New Year’s Day by a transit officer.  The shooting, which seems totally unjustified, was filmed by several people with cell phones and the video is now prompting angry protests in Oakland.  The officer worked for the Bay Area Rapid Transit (BART) system.  He resigned Wednesday.

In the past, the police usually received the benefit of the doubt in cases of conflicting testimony.  Now that cell phone cameras are common and rolling, more people are going to be skeptical of police accounts and reach their own conclusions. There is also going to be more accountability when police commit crimes or enagage in other misconduct – and that is a very good thing.

Related Cato work here.