Archive for the ‘Law and Civil Liberties’ Category
Hey Daily Kos, Cato Is Not A ‘Republican-supporting’ Institution
I guess it’s not a huge surprise that a writer at The Daily Kos would characterize Cato as “Republican-supporting” when it suits a purpose. Just for their future reference, here is a laundry list of positions taken by Cato scholars that most Republicans (Beltway Republicans, at least) tend to abhor:
- Cutting military spending
- The Iraq War
- Eliminating the Department of Homeland Security
- Resisting intervention in Libya, Syria, Iran, etc.
- Ending the War on Drugs
- Nation-building under George W. Bush and under Barack Obama
- Criticizing the Bush administration in 2006 for its constitutional record as being starkly at odds with the notion of limited government
- A constitutional case for marriage equality
We libertarians continue to be amazed at the inconsistency exhibited by the left and the right: conservatives dislike government power except when it comes to militarizing our foreign policy and, oftentimes, running people’s personal lives; liberals profess dislike for government power except when it comes to micromanaging the economy, which can quickly morph into micromanaging everything else. The Nanny-state is pushed equally by liberals and conservatives.
Ralph Waldo Emerson once said that “A foolish consistency is the hobgoblin of small minds.” (my emphasis) I think Cato scholars demonstrate a different kind of consistency in our principled adherence to limited, constitutional government, individual liberty, free markets, and peace. Our positions do not change whenever Republicrats replace Democans in office.
Letter Correcting Politico Article re States & ObamaCare Exchanges
Politico has run my letter to the editor regarding their article on states refusing to create ObamaCare’s health insurance Exchanges:
“Right winning war on state health-insurance exchanges,” (POLITICO, Apr. 18) is false or misleading on several points.
It mislabels me a conservative and the Cato Institute a “national conservative organization,” when both are libertarian. Cato scholars and supporters advocate reducing military spending, and legalizing drugs, gambling, and gay marriage.
It states that Cato receives funding from “the Koch brothers” — who apparently lack first names. This claim is false. Cato now receives no funding from Charles or David Koch, and may never again.
The Kochs’ past contributions to Cato have no bearing on this article — aside from the potential (and false) implication that the Kochs and Cato have a financial interest in persuading states not to create Obamacare exchanges.
The article also quotes a Leavitt Partners employee who criticizes Cato’s position as reckless. Yet the article fails to mention that Leavitt does have a direct financial interest in creating exchanges: Politico has reported that Leavitt can’t hire staff fast enough for all the exchange contracts it is getting from state governments.
Finally, the article states “most legal experts” think the Obama administration may offer health insurance tax credits and subsidies through exchanges created by the federal government, despite a lack of statutory authority. The article does not provide – and despite multiple requests, its authors have not furnished – any support for their claim of consensus.
Other than that, it really was a good article.
Gun Owner Ended the Attack and Hysteria
According to news reports, there was a “stabbing spree” at a store in downtown Salt Lake City. Just the latest reminder that a crime can happen anywhere, anytime. Fortunately, an unnamed concealed carry permit holder was on the scene and put a stop to the attack.
H/T Instapundit.
Last week, Cato held a policy forum on the Stand Your Ground Laws and examined instances of citizens using guns to thwart crimes. More here.
Obama’s Long Knives Come Out
Today POLITICO Arena asks:
Is Common Cause’s complaint against The American Legislative Exchange Council valid, or is it a smear against a successful conservative advocacy group?
My response:
Common Cause has joined such bully-boys as the discredited former White House aide Van Jones and his “Color of Change” to do what the Left does best—smear those who oppose their political agenda. The American Legislative Exchange Council is a reputable organization of thousands of conservative and libertarian state legislators from across the country. They meet periodically to develop legislative proposals aimed at pro-growth solutions to problems facing their various states. ”Stand Your Ground” and voter-ID laws have constituted only a small part of ALEC’s agenda over the years.
But this is an especially important election year, so all the stops are out for the Left. And it starts at the top. For a chilling account of the tactics to which Obama is now stooping, read Kim Strassel’s piece in this morning’s Wall Street Journal. At an Obama campaign website we find ”Behind the curtain: A brief history of Romney’s donors.” Its purpose is plain as day: to expose and shame private citizens who’ve had the temerity to donate to the Romney campaign. “Quite a few,” the post charges, have been “on the wrong side of the law.” Their “crimes”? One is a lobbyist, another a hedge-fund manager, another outsourced jobs.
We haven’t seen such tactics since the days of Nixon’s “enemies list.” This is Axelrod and Chicago politics, and it’s not going to get any better, because Obama can’t run on his record. So brace yourself for the politics of personal destruction.
Supreme Court Gives Taxpayers a Muddled Win
This blogpost was co-authored by Cato legal associate Carl DeNigris.
Before the argument on the Arizona immigration case yesterday, the Supreme Court scored a blow for American taxpayers by rejecting the IRS’s attempt to overturn the Court’s prior interpretation of a disputed provision of the Internal Revenue Code, 26 U.S.C. §6501(e)(1)(A). By avoiding the issue of whether agencies can use their regulatory powers retroactively, however, the Court didn’t go far enough.
In United States v. Home Concrete, the Court ruled that its decision in Colony v. Commissioner of Internal Revenue (1956) — that a taxpayer’s overstatement of tax basis in property is not an omission of income that would otherwise trigger an extended statute of limitations period for assessment — was still controlling. The IRS had tried to change its interpretation of the relevant regulation but the Court concluded that, despite the government’s contention that the new interpretation was due judicial deference, “there is no longer any different construction that is consistent with Colony and available for adoption by the agency.” That is, the IRS can’t unilaterally overturn Supreme Court precedent by changing how it interprets statutory language or applies a particular regulation.
But the Court didn’t address the government’s most insidious action here: the IRS sought deference for a regulation that it promulgated in the midst of litigation and which would have been retroactively applied to the taxpayers who were parties to the Home Concrete lawsuit.
In our amicus brief, Cato argued that sanctioning this sort of ad hoc, retroactive rulemaking undermines the rule of law by altering basic assumptions “regarding fairness and reliability of the laws and their application by the courts.” Yet, with the exception of Justice Kennedy’s one sentence dismissal in dissent, the Court showed no interest in the retroactivity issue. Moreover, it referred to the government’s blatant attempt at retroactive rulemaking as a mere “gap-filling regulation” with “no gap to fill.” So while taxpayers won a narrow victory today, the Court’s silence gives little assurance that it remains a bulwark against arbitrary government power.
Perhaps even more importantly, it’s now unclear how courts are to apply an important precedent called Brand X, a 2005 case standing for the proposition that administrative agencies (like the IRS) can adopt regulations contrary to a judicial decision only when the relevant statute’s silence or ambiguity represents a congressional delegation of authority to fill that “gap” to the agency. In other words, here the IRS acted contrary to clear statutory language as interpreted by Colony Cove, but what about future cases? We’re no tax or even administrative law specialists, but it does seem that the Court has made a big mess out of Brand X: When can an agency overturn decisions of the Court? When can it not? We’ll have to wait for the next ridiculous agency action to make its way to the Supreme Court to find out.
For more on the case, see here; for more technical administrative/tax law analysis, see here. One other curious thing about this decision is that it ended up 5-4 but the majority opinion was written by Justice Breyer (who styles himself as the Court’s administrative law expert) and joined by the “conservative” justices — though Justice Scalia concurs only in part – with Justice Kennedy writing the dissent, joined by the remaining three “liberal” justices.
Obama Is But a Small Cog in Drug War Machine
President Obama recently gave an interview to Rolling Stone and tried to defend his drug war policies–especially his escalation of the federal war against medical marijuana providers in California. Obama now says anyone who thought he was hoping he’d change course from the Bush-Ashcroft policies somehow got the wrong impression from his 2008 campaign. And, besides, he said you can’t blame the president for laws passed by the Congress. Obama would have us believe that he’s just a small cog in the drug war machine.
A few questions for the president:
1. Have you thought about your pardon power?
2. Have you thought about rescheduling marijuana?
3. Have you thought about prioritizing federal law enforcement resources?
4. Have you thought about urging the Congress to, you know, change the drug laws?
5. Have you thought about removing yourself from the presidential race? There’s still time.
For related Cato scholarship, go here.
CISPA and the Right Way to Do Cybersecurity Information Sharing
The White House has issued a threat to veto the Cyber Intelligence Information Sharing Protection Act (CISPA) in its current form, despite recent amendments aimed at assuaging the concerns of privacy and civil liberties advocates:
H.R. 3523 fails to provide authorities to ensure that the Nation’s core critical infrastructure is protected while repealing important provisions of electronic surveillance law without instituting corresponding privacy, confidentiality, and civil liberties safeguards. For example, the bill would allow broad sharing of information with governmental entities without establishing requirements for both industry and the Government to minimize and protect personally identifiable information. Moreover, such sharing should be accomplished in a way that permits appropriate sharing within the Government without undue restrictions imposed by private sector companies that share information.
The bill also lacks sufficient limitations on the sharing of personally identifiable information between private entities and does not contain adequate oversight or accountability measures necessary to ensure that the data is used only for appropriate purposes. Citizens have a right to know that corporations will be held legally accountable for failing to safeguard personal information adequately. The Government, rather than establishing a new antitrust exemption under this bill, should ensure that information is not shared for anti-competitive purposes.
Justice Sotomayor: “[Mr. Solicitor] General, I’m Terribly Confused by Your Answer”
Yesterday’s argument in Arizona v. United States (my preview here), which in a non-Obamacare world would be the case of the decade, revealed among other things yet another bizarre legal position taken by the Obama Justice Department. That is, the solicitor general stood there and straight-facedly made the claims that: (1) local law enforcement could make ”ad hoc” judgments to apprehend illegal aliens but state governments (the bosses of said local officials) could not “systematize” such policies by legislation; and (2) state laws like Arizona’s were unconstitutional because they interfere with federal policy decisions on how to allocate enforcement resources.
It was the first point that caused Justice Sotomayor’s (understandable) confusion.
Solicitor General Verrilli apparently resolved that confusion in an unsatisfactory manner, because Sotomayor later asked him for other arguments because “you can see [that this one is] not selling very well.”
The second point was met with similar skepticism by the Court, with Justice Alito asking whether, if “the federal government changed its [enforcement] priorities tomorrow . . . . Would the Arizona law be un-preempted?”
These colloquies don’t necessarily mean that the DOJ is headed towards a precipitous defeat — here’s a transcript and summary of the whole argument so you can judge for yourself — but it does show how far off the reservation this administration goes to assert political stances (and controversial ones at that) in place of sound legal reasoning.
Graffiti Problem … So Call in the SWAT Team!?
From today’s Washington Post:
Hethmon had an up-close and unpleasant experience with the same kind of local police he had done so much to empower.The problem began with graffiti on a highway overpass in Bowie. Police there suspected that Hethmon’s teenage son might be involved and obtained a search warrant. They arrived at 7 a.m. on March 9 with a heavily armed team of county officers.
“Come in with masks, guns, screaming. You know, knocking everybody down,” Hethmon recalled. “I tried to explain to them, you know: ‘Look, I’m a lawyer, this is outrageous.’ [The reply was:] ‘Shut up and lie down on the floor.’ ”
Police said they found 2.5 grams of marijuana in the house. They filed charges against Hethmon, his son and his wife — all for the same drugs. The charges against Hethmon will be dropped, prosecutors said last week.
Hethmon said the experience has not changed his work.
“The fact that a law is legitimate and serving a purpose doesn’t mean that it can’t be abused,” he said. “Human beings are flawed people.”
And so, for the lesser-known of this duo, there has been a personal test. After he did so much to place greater trust in local police officers nationwide, police in Prince George’s County sent a SWAT team to his house to look for . . . spray paint.
It would be comical if it were not so serious. Once the paramilitary unit arrives, heavy-handed methods are often employed to ensure ‘officer safety,’ i.e. break windows to distract occupants from the doorway and flashbang grenades. The militarization of police tactics is out of control, but policymakers do nothing focus on expanding the power of the government.
Wal-Mart, FCPA and Mexico
Last fall in this space I described the Foreign Corrupt Practices Act as “a feel-good piece of overcriminalization” that Congress should never have passed. Over the weekend a front-page New York Times investigation alleged that Wal-Mart’s Mexican subsidiary had paid millions in bribes to local officials for permission to build stores around the country. Worse, when executives in America learned of the payments, they chose to sweep the matter under the rug rather than pursue an investigation, and that choice may have implicated high-level company execs in FCPA violations. [WSJ summary; Wal-Mart written statement and video]
I’m writing up a longer piece on the controversy. In the mean time, a few points:
- The original payments to Mexican officials are said to have exceeded $24 million; meanwhile, $12 billion in stock market value, or 500 times that sum, was vaporized in one day on Monday. Wal-Mart’s high legal exposure arises through the interaction of various FCPA provisions with each other and with other federal and state laws, including possible liability under state corporate law and Sarbanes-Oxley. Collateral costs, such as executive distraction and probes into its operations in other countries, could debilitate the largest U.S. retailer for some time.
- A good place to begin on the legal issues is Mike Koehler’s FCPA Professor with coverage here and here.
- According to Peter Henning at NYT DealBook, it may be too late for the feds to file criminal charges against individual defendants over the original payments because of FCPA’s five-year statute of limitations. On the other hand, DoJ will have various theories to go after the company itself: it can claim that later financial results are misstated, or that there was a conspiracy at least one step of which was taken within the last five years, or that records were destroyed which could serve as an obstruction of justice charge under Sarbanes-Oxley. If the original wrongdoers wind up walking free while managers who arrived on the scene later take a full legal hit, well, that wouldn’t be the first time.
- Some proponents of the FCPA are claiming vindication: how can the Cato types be right in calling this law vague and punitive when it failed to deter a cover-up at a company as big and image-sensitive as Wal-Mart? UCLA corporate law specialist Stephen Bainbridge has a nice riposte: “In other words, the FCPA imposes huge burdens and liability risks on honest companies, but fails to deter dishonest ones, so we’re going to leave it on the books as is. I’m left scratching my head in wonderment at the folly of it all.”
- Daniel Fisher at Forbes scores an interview with the eminent Yale management professor Paul MacAvoy whose analysis of the case follows:
…all large U.S. corporations operating abroad must play a dangerous game in order to obtain the permits and permissions they need. MacAvoy, who has served on the boards of Chase Manhattan, American Cyanamid and Alumax, said Wal-Mart’s mistake was steering all the payments to a pair of lawyers who allegedly were friends of the company’s Mexico counsel. That concentrated the risk and the likelihood of a big, crater-the-company scandal instead of a series of small ones.
From my experience, he said, most companies have “local representatives involved in negotiations and they pay the local reps a fee for the representation without asking how that fee gets redistributed.”
“The consultant does the dirty work,” he said. “This case went wrong by the concentration of the funds and the coverup of the process.”
Immigration Laws at the Supreme Court: Constitutional but Bad Policy
For anyone suffering from post-Obamacare-argument Supreme Court withdrawal, this Wednesday the Court takes up Arizona’s controversial Senate Bill (“SB”) 1070. See my blogpost from when the Court granted review for some background.
SB 1070 is much-misunderstood: it has nothing to do with sexy political issues like racial profiling and everything to do with boring legal ones like whether a given state provision is “preempted” by federal law. That is, do the various parts of the state law — each one of which the Court will be evaluating independently – conflict with federal law (direct preemption) or intrude in an area exclusively reserved to Congress (implied preemption).
United States v. Arizona shows that there’s a difference between what’s constitutional and what’s good policy. SB 1070 was crafted to mirror federal law rather than asserting new state powers that interfere with federal authority over immigration. That’s why lower courts only enjoined four of its provisions and why the Supreme Court would not be wrong to resurrect even those four.
But beyond this hyper-technical legal analysis, SB 1070 and copy-cat laws elsewhere — some of which go further than Arizona’s and thus are of more dubious constitutionality — highlight the dysfunction in our immigration system. Given Congress’s failure to act in this area, state governments have spawned a host of federalism experiments. Many of these laws are terrible policy for reasons ranging from economic effects to the misuse of law enforcement resources.
Legal scholars always enjoy the opportunity to point out laws that they think are constitutional but bad policy. It makes them feel intellectually honesty (if they have reason to be defensive in that regard). Well, immigration is the most obvious place where my constitutional and policy views diverge. The ultimate solution here isn’t for the Supreme Court to strike down the states’ lawful if misguided legislation, but for Congress and the president to enact a comprehensive national reform.
For more on what’s at stake in the case, see my SCOTUSblog essay from last summer, my forthcoming law review article, and my new colleague Alex Nowrasteh’s recent op-ed. For the briefs and other background materials, see SCOTUSblog’s case page.
The Supreme Court Denies Certiorari in Challenge to NYC’s Rent-Control Law
Today, the Supreme Court declined to review Harmon v. Kimmel, a case challenging New York City’s rent control law. For a case that merely had the possibility of getting to the high court, Harmon has received a surprising amount of attention. A lot of this attention is due to the persistence of Mr. Harmon, who has admirably been fighting this important battle on behalf of thousands of similarly situated landlords who are forced to subsidize cheap rents, often for tenants who can easily afford to pay the market price. According to the Wall Street Journal, one of the Harmons’ rent-controlled tenants even “owns a second home near the shore in Southampton, where she spends weekends gardening and playing tennis.”
As I said in January in a Reason.tv video, rent control is something that nearly every economist can agree on: it lowers the amount of housing, it lowers the quality of housing, it raises the total costs of finding and securing housing, and it doesn’t even guarantee that those who need cheaper housing will get it. Nevertheless, it seems as if rent control will remain as much a part of New York City’s culture as Broadway theater and pizza.
In addition to the ill-effects of rent control on a housing market, perhaps the most pernicious aspect is that it allows lawmakers to force the costs of subsidizing others onto private individuals. New York City could certainly create a program in which tax dollars are used to directly subsidize the rents of those in need by giving money either to the tenant or to the landlord. The city could also provide more state-built, low-income housing. Either program could achieve the goals of rent control without many of the accompanying negative effects (although, of course, both programs would have many horrible problems of their own).
Such taxpayer-funded programs, however, would not serve the immediate goals of many city politicians: to provide benefits seemingly without cost. In a way, rent-control laws are a lot like the individual mandate of Obamacare currently under challenge in the Supreme Court. Both allow lawmakers to use regulatory requirements in lieu of raising taxes to pay for a program (I discussed how this works in Obamacare here). Rent-control laws permit lawmakers to avoid the political accountability of taxpayer-funded, on-budget subsidization by forcing individual property owners to subsidize tenants in the name of the “public good.” Whatever the merits of such a proposal, innocent landlords such as the Harmons should not be forced to become pawns in lawmakers’ attempts to avoid losing the next election.
It is unfortunate that the Court will not hear the case, but I applaud Mr. Harmon for bringing much-needed attention to an important issue.
Cato on Facebook
Cato on Twitter
Cato on Google+
Cato on YouTube
