Topic: Law and Civil Liberties

Downside of Disclosure

The Washington Post reports today about the emergence of the Democratic Alliance, a group vetting organizations for wealthy, liberal contributors. The group has an interesting rule:

The alliance has required organizations that receive its endorsement to sign agreements shielding the identity of donors…The group requires nondisclosure agreements because many donors prefer anonymity…Some donors expressed concern about being attacked on the Web or elsewhere for their political stance; others did not want to be targeted by fundraisers.

Of course, the United States has a long tradition of anonymous speech and political activity, including The Federalist Papers. The donors to the Democratic Alliance continue in that tradition. Their desire for anonymity proves that mandatory disclosure of money in politics imposes costs on participation.

Those same costs affect donors to political campaigns who do not have a right to anonymous speech. In fact, a donor who gives to a challenger threatening an incumbent member of Congress faces a greater risk than that confronted by the donors to the Democracy Alliance.

Given their experience with the downside of disclosure, perhaps the donors to the Democratic Alliance (or the organizations they fund) will lead the way toward liberalizing or eliminating mandatory disclosure of campaign contributions.

Overkill

balko_whitepaper_300x394.jpgToday, my paper on SWAT teams and paramilitary tactics is finally released. It’s been the thrust of my research for nearly a year, now. It offers a history of SWAT teams, legal background, analysis and criticism of their increasingly frequent use and abuse, and an appendix of case studies that documents more than 150 botched raids.

You can download it for free [pdf]. If you want a slick, bound copy, you can order one for $10, and you’ll also get a copy of Gene Healy and Tim Lynch’s paper on the constitutional record of George W. Bush.

We’re also launching an interactive map to accompany the paper. The map plots every botched raid I’ve found in my research, with a description of what happened and a list of sources. You can sort the map by type of incident. So, for example, if you want to see only those raids where an innocent person was killed, it would look like this. If you want to see raids where a nonviolent offender was killed (a recreational gambler or potsmoker, for example), it would look like this. If you want to see all of the “wrong door” raids where no one was killed, it would look like this.

The map is also searchable by year, state, and type of incident.

Cato’s news release on the paper is here.

Why 527s May Survive for the Long Term

The drive to eliminate 527 groups appears to have failed for this year. That is good news for free speech. But maybe the story is even better. Maybe Congress won’t eliminate 527s next year or the year after. Let me explain.

First, a little history. 527s rose to prominence in the 2004 presidential campaign. The Democrats used 527s to raise several hundred million dollars to help the Kerry campaign. The Republicans by and large did not use 527s. Party leaders wanted to keep control of the GOP campaign. For reasons of partisanship and control, Republican leaders wanted Congress to “close the 527 loophole.”

They have failed to do that. Democrats were willing to filibuster to block the legislation, and seven Republican senators were unwilling to support the effort to end 527s.

However, things could change. To succeed in the Senate, the 527 ban will need more unified Republican support plus a few stray Democrats (say, about 10 of them) voting contrary to the wishes of their party’s leaders. The latter could happen. An endangered incumbent of either party values his re-election more than party discipline. Twenty percent of the GOP in the House voted for McCain-Feingold, the wishes of their leaders notwithstanding.

If the Democrats use 527s to attack Republican incumbents, the GOP might be more unified on this issue. If the GOP in turn uses 527s to effectively threaten vulnerable Democratic senators, those incumbents might consider voting with the GOP to “close the 527 loophole.” (It’s free speech, not a loophole, but you get my point).

But the GOP leadership does not want to use 527s. They highly value retaining control over campaigns. As long as that remains true, vulnerable Democrats will not be threatened by 527s and will not provide the necessary votes to override a filibuster in the Senate.

In sum, 527s will probably survive so long as Karl Rove runs the Republican show.

There’s No Fixing the FBI’s Computers

While Congress and the Department of Justice consider mandating that ISPs retain data about all of our communications, the FBI, it seems, can’t keep its own IT systems up to date. Putting aside the irony to focus on practical matters, what will bring the FBI up to snuff? I told the reporter in the article linked just above that nothing will.

The problem is institutional; when an organization’s membership doesn’t enjoy feast or famine based on the success of the organization, very little can bring it into focus and create success. … Congressional and public oversight is a weak, weak substitute for competitive pressure.

But the FBI’s computer systems have to be fixed, don’t they? They do. And to get there, you might have to shrink the FBI and law enforcement generally — especially federal law enforcement.

Because of the nature of bureaucracies, I don’t think there is an effective management solution to the FBI’s problems with IT. The better answer occurs at a higher level of abstraction:

Too many risks and threats are being treated as public problems to be dealt with through law enforcement when they should be treated as private problems to be dealt with through security.

To illustrate: Imagine that the nation’s garages had been designed without garage doors. People finding that their lawn mowers and garden tools were being stolen could call the cops (public/law enforcement) or design and install garage doors (private/security). Much going on in Internet security and online anti-fraud these days equates to people without garage doors calling the cops. There should be more personal and corporate responsibility, less government and law enforcement.

Another example: Starting more than 30 years ago, the U.S. government started taking responsibility for airline security (public/law enforcement) rather than leaving it with airlines (private/security). In fact, President Nixon announced expansion of the air marshals program on September 11, 1970, 31 years to the day before 9/11.

Mixed responsibility allowed both the public and private sectors to avoid ownership of the risk that a flight would be commandeered and used as a weapon. After 9/11, the government took further control over airline security and absolved airlines of the liability that might have accrued to them in the courts. (I don’t think they should have been liable for the full consequences of 9/11 or would have been found liable in well-functioning courts, except perhaps for the lives of their passengers.)

The lesson that private owners of critical infrastructure across the country learned is: Failure to secure themselves will bring them protection from liability, subsidies, and government-provided security services. In other words, they have been shown that leaving their garage doors open and calling the cops is better for them than taking responsibility. (In insurance economics, this is called “moral hazard.”)

“How do you fix the FBI’s computers?” You don’t. And you won’t. That’s the best answer I know.

Does it come off as too ideological to argue that the FBI should be smaller? Consider that the management problems at the FBI are merely part of a different ideological choice: having a large federal law enforcement apparatus. It doesn’t have to be this way, and the management problems are a product of the fact that it is.

Does it come off “soft on crime” to argue that federal law enforcement should be reduced? The opposite tack — “tough on crime” — means accepting incompetent law enforcement, which is the best friend crime ever had.

Charged with Second-Degree Innovating

Here’s a clever idea:

They’ve been described as Minnesota’s Tupperware parties for wine tasters.

For the past two years, a consultant with the Traveling Vineyard, a Massachusetts company operating in nearly 30 states, would come to your home. Along with friends, you’d sample a pinot or chardonnay, and then fill out a form if you wanted to buy some.

And here’s how the regulators are going to kill it:

On Tuesday, state authorities raided a landmark Minneapolis liquor store, Surdyk’s, seizing about 40 cases of wine in an effort to shut down the Traveling Vineyard. Surdyk’s ships prepackaged and prepaid orders from the company to its customers.

The state alcohol enforcement division says the Traveling Vineyard can’t legally sell wine without a license.

[…]

Texas, Washington and Massachusetts will be taking some form of regulatory action against Geerlings & Wade, which owns the Traveling Vineyard, to change or stop how it does business in those states because it is violating licensing laws, according to a search warrant filed Tuesday.

Minnesota would be the first state to attempt to present a criminal case against the company. Misdemeanor and gross misdemeanor charges are expected to be filed by the Minneapolis city attorney’s office today, Kjelsberg said.

“We aren’t aware of any other business in the state that operates like the Traveling Vineyard,” she said. “They are taking sales away from legitimate retailers.”

[…]

“I hope this will be the end of the company, but that remains to be seen,” she said.

The alcohol industry deserves a heap of scorn for its position on these types of issues. I regularly get industry publications where an article defending “personal responsibility” runs next to an article defending the three-tiered wholesaler system because, the argument goes, alcohol is special and deserves that extra layer of regulation. Consumers can’t be trusted to buy direct from wholesalers, Internet proprietors, or companies like the Traveling Vineyard, alcohol executives say. It’s just too cheap! We’ll drink too much.

In truth, of course, the retailers just like the fact that most states have laws in place that protect them from competing business models. The three-tiered system is a racket that protects antiquated business models from wholesalers like Costco and Sam’s Club, and from innovators like Traveling Vineyard.

Have We Learned Nothing from “SchoolHouse Rock”?

“I’m just a bill, yes I’m only a bill, and I’m sittin’ here on Capitol Hill…”

Back when dinosaurs roamed the earth and cartoons were confined to Saturday morning broadcast programming, kids learned about the separation of powers (among other things) from the ”SchoolHouse Rock” toons.

Apparently some future New Jersey lawyers weren’t tuned in.

The recent lawsuit about which Cato’s Neal McCluskey has been writing asks the court to create a school voucher program in New Jersey as a remedy to the state’s deficient public school system. Right ends, wrong means. Courts are for legal interpretation; legislation is for legislatures.

There’s little doubt that New Jersey is failing to live up to its constitutional promise to provide a “thorough and efficient” education. Should the court so rule, it will be up to the legislature to fix the problem, and introducing a universally accessible free education marketplace is certainly the best solution they could implement.

But it’s their job to implement it, not the court’s.

Fraudulent Identity Fraud Statistics

Slate has a great piece up on the use and misuse of statistics by reporters.

The magic number for journalists covering the identity theft beat has been $48 billion—the estimated annual losses suffered by identity theft victims—which carries the Federal Trade Commission’s imprimatur. … Fred H. Cate, a law professor and director of Indiana University’s Center for Applied Cybersecurity Research, notes that if the estimate were accurate, it would wipe out up to half of the banking industry’s $103 billion profits in 2005. “If those numbers were true, we’d have a banking crisis on our hands,” he says.

When I worked on the Hill, I came to recognize a similar dynamic at play: There were things everyone believed and no one questioned. I called them “political facts” because the source of the fact was consensus rather than any measurement or observation. Repetition of political facts in Members’ speeches and floor statements just made them all the more true.

A political fact relating to identity fraud is that it is a stranger crime, often a product of data breaches, that is conducted mainly over the Internet. It sometimes is, but in my book, Identity Crisis, I point out the results of an actual study showing that:

[M]ore than a third of individuals who had been impersonated in a true identity fraud knew … who the perpetrator was. And in more than half of those cases, the perpetrator was a family member or other relative. Other prominent perpetrators of identity frauds are people in companies or financial institutions with access to personal information, as well as friends, neighbors, or in-home employees of impersonation victims. So much for the Internet being the cause of identity fraud, though it certainly plays a role in some cases.

Alas, … my source was a Federal Trade Commission study.