Tag: finance regulation

The Primary Purpose of McCain-Feingold Revealed

Kenneth Vogel offers an unexpected insight into the nature of campaign finance regulation:

“[Wisconsin Senator Russell] Feingold faces an uphill battle against a novice opponent, who, perhaps ironically, has been the beneficiary of hundreds of thousands of dollars in ads attacking Feingold that would have been prohibited had McCain-Feingold remained intact.”

In other words, if Feingold’s campaign finance law had not proven to be contrary to the U.S. Constitution, he might well not be facing “an uphill battle” to serve a fourth term in Washington. The political speech that is causing Feingold problems would have been prohibited in that situation. But the First Amendment favors speech and not the re-election needs of senators.

Oddly, Vogel writes as if the freed political speech (“ads attacking Feingold”) is a bug rather than a feature of current law.

Major Whistleblower Provisions in Financial Regulation Bill

When Congress passes major new regulatory laws, it nowadays routinely throws in provisions authorizing lawsuits on behalf of so-called whistleblowers at regulated businesses. Lawmakers do this despite frequent complaints that such provisions encourage discontented employees to seize on borderline conduct and label it fraud or rule-breaking, enrich some persons who themselves took part in questionable practices, and interfere with companies’ own internal compliance efforts, to name a few presumably unintended consequences.

One reason these provisions are added with such regularity despite their at-best-mixed record is that they are lobbied for avidly by two groups of lawyers, the so-called qui tam bar (which collects a percentage of the sometimes enormous informant bounties provided by statute) and the plaintiff’s employment bar, for whom the laws (especially “anti-retaliation” provisions) can provide valuable leverage in negotiating on behalf of terminated employees even if no bounty is available.

While it has not been a major focus of bill opponents, the Dodd-Frank financial regulation bill is loaded with major new extensions of whistleblower law into the economy’s financial sector. Michael Fox at Jottings By An Employer’s Lawyer has more, and links to a more detailed account at an understandably jubilant plaintiff’s-lawyer site. I covered the issue a few weeks ago at Overlawyered, where there is also background on qui tam and whistleblower matters more generally.