Timely Objections Blog

The First Amendment of Brandon Raub

By R Tamara de Silva

August 22, 2012

 

       The point of demarcation between political expression and dangerous dissent is being discerned in much the same manner the Romans augured the future by looking at the entrails of birds.  Enter social media, which has been flexing its muscles on the topic even managing to draw the somnolent Media to bring national attention to the odd arrest and detention of a 26 year old former combat Marine, Brandon J. Raub.  Brandon, who had served his country in Iraq and Afghanistan from 2005-2011, was taken from his home by this same government in the form of the FBI, Secret Service and police agents for what looks to the outside world as his expression of his First Amendment right to criticize his government and his President. Is he the first known victim of the National Defense Authorization Act or Virginia's involuntary commitment statute? 

       One of my favorite people at the University of Chicago was the late Allan Bloom.  He once suggested that the First Amendment was a grand waste- no longer needed in America.  He said this because he observed that most people simply have nothing to say.  Most people may have opinions about many things but they are merely repeating what someone told them seeming to be incapable of forming a worthwhile thought on their own.  He was right in that as he went on to say, peoples' opinions are about as distinct and undifferentiated as the individual Kleenex are in a tissue box. 

       Social media bears this ought.  Except Brandon Raub was not using his Facebook account to post the perfunctory braggadocio or a travel itinerary.  Or the equally common antipode of the plea of a starving third world child- a picture of a full plate of food with an introduction about how good it is.  Brandon's posts were not so excruciatingly dull, as to be entirely devoted to self aggrandizement or the scatological- but they have all the marks of seditiousness in a Soviet Russia or Hussein's Iraq.  But in America, Brandon, like many Americans was expressing his discontent at the state of his country and its government.  Like many other of his countrymen, intellectually engaged in matters of governance, Brandon Raub used Facebook for what is inarguably its highest use-a gargantuan virtual public square.   Used this way, Facebook is not an ode to the elevation of the miniscule and mundane but a truly interesting and potentially important phenomenon.  Important because it is perhaps also a guardian of liberty in every way the Fourth Estate has been. 

       Opinions expressed in a public square can be diverse and some may even be out there.  However, were the American Revolutionaries alive today and speaking of sedition as they did then, they would not be called Patriots as history has called them-they would today be called terrorists.    This country was the birthplace of sedition and the refuge of many people the Crown considered way too "out there"-a remote place across a vast ocean fitting for the lunatic fringe. 

       The concerns of many about young Brandon are that free speech must be protected especially when what rights we were given by the Constitution have come under an onslaught of multiple new assaults like the monitoring of online computer searches, indefinite detention, indefinite detention without any due process of law [Mr. Eric Holder's invention of something called "Executive due process," which provides for a kind of due process and judgment but with no lawyer, no court of law and no trial] regular warrantless taping and tapping of all cellphone calls, the tracking and sale of customer information via credit card use, and the Department of Homeland Security's tracking of social media and all use of the internet,  tracking of all online activity, tracking of all financial transactions, the National Defense Authorization Act ("NDAA"), etc.-with all this, the willingness to still speak at all is a singularly brave but crucial act.  The law has not kept up with technology and most people are unaware of what their rights are in its wake.  The First Amendment safeguards that one act, speech, which may be one of the few gossamer threads that yet binds together our fragile and aging civil liberties. 

       Admittedly, some of Raub's postings were outside of mainstream thought in that he cited conspiracy theories related to 9/11 being an inside job and appeared to post a threat when he wrote that he would, "Sharpen up my axe; I'm here to sever heads"-repeating the words of a song called, "Bring Me Down."[1] 

       Were his posting lyrics to this song tantamount to a national security threat?  After the Colorado shootings and the shootings at Virginia Tech, many would argue it makes sense to preemptively lock people up for communications that are even ambiguously threatening.   The problem with this line of thought is that it is a slippery slope and it vests a dangerous amount of discretion in the hands of the government that can easily be abused.   It is also profoundly un-American. 

       When faced with any crisis or a 24 hour news-media human interest story, we seem to think it best to make more laws and invest the government with even more authority to "fix it" -never fully understanding that powers so eagerly bestowed can be abused and turned against their bestower.  As Benjamin Franklin famously wrote and anyone with even a cursory reading of history will understand, "those who can give up essential liberty to obtain a little temporary safety, deserve neither liberty not safety."

       One nation that has effectively used the pretext of danger to the state to imprison all who would criticize it is the Soviet Union.  All societies have normative values and at times some of them are pretextual-designed to mask much baser values.  Security is a value of the Soviet system used to hide the interests of its leaders from Nikita Krushchev to Vladimir Putin, to control the population and public opinion.  Putin's record of repressive psychiatry and the imprisonment of anyone who would insult his distastefully enormous opinion of himself belies any claim that he has divested himself fully of Khrushchev's repressive regime.  Police psychiatry allows for the routine imprisonment of dissidents in mental health institutions effectively silencing all dissidents and protestors from Garry Kasparov and Andrei Sakharov to current human rights lawyers.   Before we magnanimously proffer up parts of the First Amendment on the altar of security, we should imagine living in any one of the many parts of the world where the expression of dissent is met with death, a Soviet labor camp or more typically imprisonment in an asylum.  America must never strive to be a Soviet Union.

       There is little evidence if any, to suggest that Brandon Raub is being detained or was taken into custody for violation of the NDAA.   By all appearances Brandon Raub was involuntarily taken into custody and detained under Virginia's civil commitment law.[2]  Most states have some variant of this law by which on the word of someone in the mental health profession, or a doctor, a nurse or even a social worker, a person can be locked up if they are deemed either a threat to themselves or others.  The standard of proof the person wishing to have someone else locked up under must meet is the presence of "clear and convincing evidence" at an hearing before a magistrate at which the accused is not provided an opportunity to have an independent mental health expert rebut or evaluate the evidence offered.  

       The problems with this are numerous.  Judges and lawyers are ill equipped to evaluate mental illness.   The concept of mental illness itself is a bit like ether, "[M]ental disorder is such a vacuous phrase that the law should consider dispensing with it as an independent criterion for intervention and instead simply identify as precisely as possible the types of mental dysfunction it wants to treat specially."[3]  Social workers and mental health professionals may have no basis by which to discern the difference between sincere political protest and the condition of "dangerousness to society."   Unfortunately for those involuntarily committed by other people, the clear and convincing standard is not difficult to overcome because it is not objective when applied to cases of civil commitment. 

       The Diagnostic and Statistical Manuel of Mental Disorders ("DSM") is used to categorize mental disorders but its categorizations are constantly being revised and subject to debate within the mental health field.   The authors of the DSM themselves warn against using the DSM for legal proceedings because of the danger that the diagnostic descriptions contained within it will be misunderstood and misused.   Of course, I do not mean to presume that the social worker or health care person calling for involuntary commitment has read the DSM.

       The Fifth and Fourteenth Amendments of the United States Constitution prohibit the government from taking from taking away a person's "life, liberty or property" without due process of law.   Civil commitment hearings perform an end run around due process-taking away liberty without the protections given to a criminal defendant.

       This all begs the question what was it about Brandon Raub's Facebook posts that the FBI and Secret Service considered a threat?   Several of Brandon's posts expressed concern about an elite ruling class, the Federal Reserve, and the enormity of the Federal government.  He must be insane for being critical of the government in the following post written on his Facebook wall on November 11, 2011,

The Truth 
by Brandon J Raub on Friday, November 11, 2011 at 10:00 am

America has lost itself. We have lost who we truly are. This is the land of the free and the home of the brave.

This is the land of Thomas Jefferson.

This is the land of Benjamin Franklin.

This is the land of Fredrick Douglas.

This is the land of Smedley Butler.

This is the land John F. Kennedy.

This is the land of Martin Luther King.

This is the land where the cowboy wins. This is the land where you can start from the bottom and get to the top. This is the land where regardless of you race and ethnicity you can succeed and build a better life for you and your family. This is the land where every race coexists peacefully. This is the land where justice wins. This is the land where liberty dwells. This is the land where freedom reigns. This is the land where we help the poor, and people help each other. This is land where people beat racism.

The Federal Reserve is wrong. They have designed a system based off of greed and fear. They designed a system to crush the middle class between taxes and inflation. This is wrong, and it is unjust. It is wrong.

We have allowed ourselves to be deceived and seduced by the powers of the printing press. It is not a good system. It discourages saving: the foundation for all stable economic activity. The Federal Reserve is artificially manipulating interest rates and creating phony economic data.

This thing has deceived our entire nation.

They created it in 1913. They also created the income tax in 1913. They encouraged the growth of debt so they can tax you on it. There is interest on the debt. Your government is in bed with these people. They want to enslave you to the government so that they can control every aspect of your lives. It is an empire based on lies. They operate of greed and fear.

There is a better way. It's called freedom. Freedom is called a lot of things. But there is a true meaning. It means very simply that you have the right to do whatever you want as long as you are not infringing on the freedoms of other people.

I firmly believe that God set America apart from the other nations of the world. He saved a place where people could come to to escape bad systems of goverment. This system we have created works. It really works.

There is evil going on all around the world. The United States was meant to lead the charge against injustice, but through our example not our force. People do not respond to having liberty and freedom forced on them.

Men and Women follow courage. They follow leadership, and courage. Our example has paved the way for people all around the world to change their forms of government.

Force is not the way because liberty is a powerful concept. The idea that men can govern themselves is the basis for every just form of government.

We can govern ourselves. We do not need to be governed by men who want to install a one world banking system. These men have machine hearts. Machine and unnatural hearts.

They have blocked out the possibility of a better world. They fear human progress. They have monopolies on everything.

This life can be free and beautiful. There are enough resources on this earth to support the world's population. There are enough resources on this earth to feed everyone. There is enough land for everyone to own their own land and farm, and produce their own energy.

These people have been hiding technology. There are ways to create power easily. There is technology that can provide free cheap power for everyone. There are farming techniques that can feed the entire world.

The Bill of Rights is being systematically dismantled. Men have spilled their blood for those rights.

Your sons and daughters, your brothers and sisters, and Americas best young men and women are losing their limbs. They are losing their lives. They are losing the hearts. They do not know why they are fighting. They are killing. And they do not know why.

They have done some extraordinary acts. Their deeds go before them. But these wars are lies. They are lies. They deceived our entire nation with terrorism. They have gotten us to hand them our rights. Our Rights! Men died for those rights!

September Eleventh was an inside job. They blew up a third building in broad daylight. Building 7.

Your leaders betrayed you.

You elected an aristocracy. They are beholden to special interests. They were brainwashed through the Council on Foreign Relations. Your leaders are planning to merge the United States into a one world banking system. They want to put computer chips in you.

These men have evil hearts. They have tricked you into supporting corporate fascism. We gave them the keys to our country. We were not vigilant with our republic.

There is hope. BUT WE MUST TAKE OUR REPUBLIC BACK.[4]

 

 

       President Andrew Jackson was also critical of the central bank and would most certainly be detained as a lunatic or worse were he alive today by both political parties and the pundit class,   

"Gentlemen, I have had men watching you for a long time and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter, I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves."

 

 

       The Department of Homeland Security would consider Brandon a potential terrorist as they would also consider most of the people that express views critical of the government as potential terrorists.   According to a study by the National Consortium for the Study of Terrorism and Responses to Terrorism entitled, "Hot Spots of Terrorism and Other Crimes in the United States, 1970-2008," funded by the Department of Homeland Security, terrorists are likely people, "reverent of individual liberty...suspicious of centralized federal authority or anti-government," including people who are extremely conservative or extremely liberal.[5] 

       Do not depend on some judge or lawyer to protect your First Amendment rights.  Too often I have observed judges and lawyers slavishly reciting precedence and statute with the Constitution being but a tertiary concern.  Law review articles about involuntary civil commitment regurgitate a parade of judicial affronts on due process.   Given this way or reasoning, which is the absence of reasoning but mere recitation of the past as authority binding on the future, un-Constitutional decisions have a theoretically infinite half-life.  We need to pay attention to Brandon Raub's fate just as much as John Bradford observed the fate of fellow going to the scaffold from the Tower of London and remarked, "there but for the grace of God, goes John Bradford."  The scaffold is still there and the tower remains claiming many inhabitants who thought they would certainly never reside there.@

R. Tamara de Silva

Chicago, Illinois

August 22, 2012

 

R. Tamara de Silva is a securities lawyer and independent trader

 

Oligarchy and Its Discontents-What Money Buys

By R Tamara de Silva

August 20, 2012

 

            "The optimist thinks this is the best of all possible worlds. The      pessimist fears it is true."

                                                J. Robert Oppenheimer

 

 

       Last week it was announced that the United States Department of Justice and the Securities and Exchange Commission would not seek any criminal charges against Goldman Sachs or for that matter the executives of MF Global including its CEO, former United States Senator Jon Corzine.  This likely surprised many people who still read the news, but actually infuriated no more than three people among them... and they were probably on the verge of becoming unhinged anyway.  Most people realize that while economists look for optimized states whose existence is perfectly beyond dispute within their own models...optimized models of the actual economy and democracy for that matter, exist only in the Great Books... and many other books.  In point of fact, the discontents of oligarchy are numerous.  While economists may not spend much time successfully modeling the real world-perhaps in part because there are no repercussions for their being in error, catastrophic events happen in the real world and are not modeled or anticipated by any economist.   Recent events like the decision to give Jon Corzine and MF Global a pass are legitimate examples of the role of money in politics and in the law. 

       Henry Adams sort of foresaw the events of last week.  Henry Adams had a privileged perch from which to view the dilemmas of American democracy as he was the great grandson of the second American President John Adams and grandson of our sixth President, John Quincy Adams.  There are certain scathing critiques of politics that have always attracted me to Henry Adams-in the same way I was drawn as child to the diatribes of Cato the Elder.  For example, he regularly wrote about the mortal danger to American democracy manifested by the role of money, especially corporate influence and how its tendency to corrupt the political system, would be the country's ultimate undoing.  In writing about the corruption of the Erie Railroad for the Westminster Review in 1870, he described corporate influence growing to the point of being unchecked,

 

          "swaying power such as has never in the world's history been trusted in the hands of mere private citizens,...after having created a system of quiet but irresistible corruption-will ultimately succeed in directing government itself. Under the American form of society, there is now no authority capable of effective resistance."

 

       He was also disturbed by the party system of politics in America and saw it to be willing to sacrifice principle for accommodation.   This theme comes out in his book, Democracy.  In Democracy the idealistic and hyper-principled heroine, Madeleine Lee is courted by the far more practical and ambitious Senator Silas P. Ratcliffe.  Madeleine decides not to marry Ratcliffe though it seems that he gets the better of her in almost all their arguments about politics.  Ratcliffe has aspirations to the White House and argues that moral authority comes from his political party the party with which he will on principle never disagree, "that great results can only be accomplished by great parties, I have uniformly yielded my own personal opinions where they have failed to obtain general assent."  

       Many of the books exchanges between Madeleine and Ratcliffe find Madeleine losing the argument.  She prefers to remain single and reject Ratcliffe and Washington at the end of the novel as she is determined to return to her philanthropic works saying, "The bitterest part of this horrid story...is that nine out of ten of our countrymen would say I had made a mistake."  And they still would.   I confess I see myself in Madeleine but one who must stay, without leaving, just out of an insatiable curiosity to observe all that will happen.

 

Citizens United v. FEC and the Judiciary

       Money has always played a role in politics.  Any discussion of the role of money in politics, judicial elections or law enforcement in 2012 has to consider the United States Supreme Court's January 2010 decision in Citizens United v Federal Election Commission in which the Court ruled that political spending is a form of protected speech under the First Amendment.  Citizens United allows corporations and unions to spend money to support or denounce candidates in elections through ads.  This is a titan of a case, perhaps unrivalled in its potential to alter the face of representative government in the United States because of the way that most people who vote decide on a candidate-they watch or listen to broadcast media advertisements.   However, Citizens United did not alter much of the McCain-Feingold campaign law, which still regulates corporate donations to political parties and candidates.  Nor does the case affect political action committees or PACs, which can contribute directly to candidates.

       Perhaps the greatest impact of the Citizens United decision will be in the election of state judges.  Judicial independence at one time meant independence from the Crown.  Since then the term judicial independence has come to mean the expectation (however well grounded or not) that when dealing with the justice system, a person can expect a member of the judiciary free from the appearance of personal, monetary or political bias in the outcome of the case.  This mirrors the all important principle stated in Article 40 of the Magna Carta, "To no one will we sell, to one will we refuse or delay right of justice."    

       More money spent on judicial elections, it is feared, will give rise to the impression that justice is for sale very much reminiscent of John Grisham's book, "The Appeal," wherein a billionaire CEO buys himself a state supreme court justice who rules in favor of his company on an appeal.  Grisham's book is eerily like the true story of Supreme Court of West Virginia Justice Brent Benjamin who ruled in favor of the $3,000,000 campaign donor, Don Blankenship, the CEO of A.T. Massey Coal in a case involving a $50,000,000 verdict.  The United States Supreme Court ruled that Justice Benjamin ought to have recused himself in the case Caperton v. Massey.

       There is however one place where Citizens United may have a salutary effect on the judicial system.  In Chicago's Cook County, Illinois the slating of judges is militantly political and based not on merit per se but on a candidate's payment of $25,000 to one of the members of the Judicial Slating Committee of the Cook County Democratic Party.  Judges that are slated, almost invariably win.  Citizens United cannot but have a salutary effect here because it is difficult to imagine a worse system for picking judges anywhere.

 

The Imperial Presidency and Money

       James Madison was a staunch advocate for the separation of powers between all three branches of government.  The authors of a recent book, "The Executive Unbound: After the Madisonian Republic," by sitting Seventh Circuit Court of Appeals Judge Richard Posner and an Adrian Vermeule from Harvard Law argue that the separation of powers is a relic of the past and largely beside the point.  Without getting into questions of judicial activism and the phenomenon of hyper-opinionated sitting justices, they are actually right from an anthropological perspective.   They are right in so far that the Executive Branch has become, with the passage of the Administrative Procedure Act and sweeping acts of legislation such as Dodd-Frank and now the Patient Protection and Affordable Care Act, the most powerful branch of government.  The Executive has created so many branches, departments and agencies under its purview, most with rule-making ability-that its power has become tantamount to that of an imperial monarchy.

       However, Justice Posner because he seems only to view the world through the lense of a relentlessly pragmatic cost-benefit, economic analysis, draws at times predictable but disturbingly simplistic conclusions.   In their book, Justice Posner and Dr. Vermeule acknowledge the relative impotence of the other branches to keep up with or check the Executive and go on to assert that this does not much matter because Presidents are checked by elections, "liberal legalism's essential failing is that it overestimates the need for the separation of powers and even the rule of law."  

       In other words, just because Presidents are above the law, it does not matter because they will be checked by the rule of politics-they will be voted out.  This is startling simplistic and weak logic because it assumes an efficient marketplace, with equal participants and perfectly symmetrical information.  It also allows for the interpretation of the Constitution based upon a pragmatic economic analysis completely at  war with the absolute first principles and "inalienable rights" held sacred by the Founding Fathers and all the state legislators that ratified the Constitution. 

            This is also where money comes in.

       In his run for President in 2008, President Obama spend over $730 million and is expected by Reuters to raise $1 billion for 2012.  Spending for the 2012 election for all parties and candidates could, according to one estimate, top $9.8 billion in large part because of spending by super PACs.   Yet almost 25% of super PAC money comes from just five donors, Harold Simmons (pro-Romney) , Sheldon Adelson (pro-Romney), Peter Theil (pro-Ron Paul), Bob Perry (pro-Romney now) and Jeffrey Katzenberg (pro-Obama).[1]

       If money affects voting and elections, then according to Posner's logic, the people who will actually exercise the rule of politics and check the Executive Branch are to be these handful of businessmen and others like them.   According to the Center for Responsive Data, 3.7% of the contributors to super PACs account for 80% of the money raised-46 donors have given in excess of $67,000,000.[2]

 

Money and Prosecutions

       In the case of MF Global and Jon Corzine, Jon Corzine has been one of President Obama's elite bundlers in 2011 and 2012.  He campaigned heavily for President Obama when he was governor of New Jersey and has held private fundraisers for President Obama in his home even after MF Global went bankrupt and $1.6 billion of customer funds went missing in October 2011.  It was announced last week that he is unlikely to face any criminal charges.

       Contrast this to the Department of Justice's handling of the same violation of the Federal rule requiring the segregation of customer funds in the matter of Peregrine Financial Group.  $215 million of customer funds were discovered to be missing from customer segregated accounts in July 2012 at Peregrine Financial Group.  Russell Wasendorf Sr was arrested and criminally charged later that month.   Same act-missing customer funds-but far disparate prosecution. 

       Remember that in the futures industry, the key difference between futures commissions merchants ("FCMs") like Peregrine and MF Global and securities brokerages is that FCMs, unlike securities brokers, are required by law to keep their customer funds segregated from the FCM's own funds.   It is in this way that FCMs have been able, with comparatively few exceptions, to ensure that customer deposits are completely protected from all losses an FCM may incur due to its own proprietary trading.   Before MF Global, the requirement that FCMs segregate customer funds completely from their own funds largely prevented FCM customers from losing money due to an FCM bankruptcy

       In my first article on MF Global, I suggested that the $1.2 billion missing from customer segregated funds may have been incurred due to over-leveraged positions in European sovereign debt that coincidentally took a dramatic turn for the worse (as they did in fact as yield curves doubled rapidly in some issues) during the last weeks of October, and that funds were transferred to cover margin in customer funds held in European debt.   There is a scenario that nothing illegal would have occurred because CFTC Rule 1.25 had been amended to permit the investment of customer segregated funds in foreign sovereign debt.  Keep in mind that this rule was amended by Jon Corzine's lobbying of Commodity Futures Trading Commission ("CFTC") Chairman Gary Gensler, who is a friend and colleague of Jon Corzine.

        An alternate illegal scenario is that MF Global may have engaged in some late stage embezzlement of customer funds that were supposed to be segregated from MF Global's accounts and never commingled with any other funds.[3] One way this may have occurred is if the funds were transferred out of customer segregated funds for a legal purpose but without the customers' meaningful consent or, more likely, with an intent to deceive the customer.  

       If MF Global transferred customer funds out of segregated accounts as a loan to MF Global to cover margin calls in existing positions in sovereign debt, (perfectly legal)[4], it may however, be fraud and intent to deceive on its part if MF Global knew it could not repay the money.  This fraud may have occurred if MF Global knew (and it would be interesting to argue how it did not) that it sought to legally borrow from customer funds, knowing that it was de facto insolvent and could not replace the money.   

       During Senate and House hearings on MF Global, Terrance Duffy, the CEO of the Chicago Mercantile Exchange contradicted Corzine's testimony and stated that the CME's investigation of the MF Global matter revealed the existence of emails between MF Global's assistant treasurer and Jon Corzine.  These emails where contrary to what Corzine told Congress and suggested that Corzine had in fact authorized the transfer of customer funds out of customer accounts-the funds that went missing.   We also know that while Jon Corzine claimed he knew nothing about the financials at MF Global, he was peddling them to Interactive Brokers as he was trying to broker a last minute sale of MF Global to Interactive Brokers--in other words, he had to have been extremely familiar with MF Global's financials during the exact time period he claims to Congress to know nothing of what was happening.

       We still do not know everything that really happened at MF Global because the Department of Justice has not yet decided to grant any immunity to the one person who would be their chief witness in the matter, the Assistant Treasurer.  The Assistant Treasurer is represented by Reid H. Weingarten, who is as luck would have it, is one of United States Attorney General Eric Holder's best friends.   Some could say they agreed to let the clock run out on this one. 

       From a purely economic cost benefit analysis, Jon Corzine's raising in excess of $500,000 for President Obama in 2012 alone was the smartest money he ever spent and appears to have bought him justice in the sense of a reprieve from the CEO of Peregrine's fate.

      What about Mr. Adelson?  The billionaire casino magnate is being investigated for possible violations of the Foreign Corrupt Practices Act, money-laundering and bribery.  Perhaps contributing by some accounts close to $100 million towards Mr. Romney's election would ensure a stop to the pesky Federal investigators.  If so, this would be money entirely worth spending.

       This brings us to the last bit of news from last week that Goldman Sachs would not be investigated for criminal wrong-doing in connection with mortgage crisis and certain deals like ABACUS. 

       This Justice Department  and SEC have gotten many investment banks to execute settlement agreements with them including Goldman and Citigroup-essentially selling "get out of jail cards." Are these settlement agreements, as the Judge Rakoff and Bloomberg's Jonathan Weil have asked, merely considered the "cost of doing business" or some part of a transaction tax on offending financial titans?[5]   

       If it were in the public's interest to prevent fraud upon the market, then fines should be significant enough to actually deter illegal conduct.  If not, prosecutions should be endured and convictions gotten.    The historic role of punishment in the criminal justice system has not been just punishment, but deterrence.  Having Citigroup or GS pay $285 million is pin money to banks with quarterly revenue in the billions of dollars-the "cost of doing business" is not a deterrent to anyone but more like the cost of a municipal parking sticker to the average Joe.

       What is problematic about bank settlements is that smaller market participants cannot afford to pay for "get out of jail cards" and because the costs of prosecuting anyone other than an investment bank are less, smaller participants are actually prosecuted and do get jail time.   Peter Boyer and Government Accountability President Peter Schweizer have written about how justice is for sale in Mr. Eric Holder's Department of Justice pointing to the fact that despite President Obama's claims to represent the 99%, Department of Justice "criminal prosecutions are at 20 year lows for corporate securities and bank fraud." [6]  Given the correlation between campaign contributions (admittedly protected speech) and selective prosecutions, the 20 year low in bank fraud prosecutions is unlikely to change  with either political party.

       Consider the money.  Goldman Sachs employees were the second largest single contributor to President Obama in 2008 contributing $1,013,091.[7]   Goldman's employees are the largest single contributor to Mr. Romney in the 2012 election cycle having donated $636,080 by the end of the last quarter.[8]   Goldman Sachs is also one of the largest clients of Mr. Eric Holder's lawyer firm Covington & Burling.

       Money has always played a part in politics and it is rational for everyone with a stake in the political process to participate.  But not all participation is equal-not even close.  The odds of one vote ever making a difference in a Presidential election are between 1 in 10 million and 1 in 100 million-depending upon the state in which you live.  Voting only matters in the aggregate but money seems to matter more in terms of affecting action after election.    Above all, justice must never be for sale because as Cato the Elder and many others have pointed out throughout history the selling of justice, like the selling of indulgences, is an attribute of a decaying and dying political system.

       What is disconcerting is that mere principles, be they the adherence to ideas like freedom and individual liberty or the idea that you are secure in the sanctity of your own home, are always bound to be under-represented in the electoral process and as such destined to play the underdogs.   At one point in Democracy, Madeleine asks the impressive Ratcliffe, "Surely...something can be done to check corruption.  Are we for ever to be at the mercy of thieves and ruffians?  Is respectable government impossible in democracy?"  Ratcliffe's reply is haunting, "No representative government...can long be much better or much worse than the society it represents.  Purify society and you purify the government.  But try to purify the government artificially and you only aggravate failure. @

R. Tamara de Silva

Chicago, Illinois

August 20, 2012

 

R. Tamara de Silva is a securities lawyer and independent trader

 

       Chicago Mayor Rahm Emanuel is understandably concerned by the wave of mostly gang-related shootings that have claimed in excess of 238 lives in Chicago this year. But he is also deeply bothered by the restaurant chain, Chick-Fil-A. So much so that Mayor Emanuel has decided that the City of Chicago will ban it entirely--the restaurant that is-not the gangs. This was in response to Chick-Fil-A's president Dan Cathy stating that he is opposed to gay marriage because of his Christian religious beliefs. The expression of personal belief should not be anyone's idea of the news, nor was Dan Cathy, despite his seeming subsequent canonization by the Conservative press, particularly important before uttering these words. After all, we do not live in an America as in other parts of the world where expressed religious beliefs are to be met with state persecution, stoning or in this instance, banning.

       The Mayor's action would seem to plainly violate the First Amendment and it does. Mayor Emanuel's announcement of the ban is an unfortunate example of local government officials who know they can act in violation of the United States Constitution because the Judiciary has chipped away at the Equal Protection Clause by systematically granting elected officials qualified and absolute immunity. This said, it is not a certainty that Mayor Emanuel would successfully plead a defense of immunity because his actions are not only in plain violation of the First Amendment, his motives are Constitutionally suspect.

       It is a violation of the Equal Protection Clause for Mayor Emanuel to ban Chick-Fil-A as doing so would violate the First Amendment rights of Dan Cathy and his company. Yet many municipal officials know that the law grants them near absolute immunity from prosecution even though they may violate the Constitution because of the principle of immunity.

       It was not always so. Following Reconstruction, the Radical Republican dominated 42nd Congress enacted Section 1983 to combat the Klu Klux Klan's actions that hampered Reconstruction efforts in the Southern States. 42 United States Code-Section 1983 of the Klu Klux Klan Act of 1871 imposed civil liability on every person who would under color of law, deprive another of a Federal or Constitutional right. In this case, the Mayor as a public official is acting under the "color of law" to deny Mr. Cathy his First Amendment right of speech and the exercise of his religious beliefs.

       Section 1983 has not materially changed since its enactment in 1871 other than for the piecemeal repeal of it by the Judiciary and the Judiciary's nullification of the legislative intent of Section 1983 by broader and broader application of immunity to Federal officials, then state officials ...or as in this instance, the Mayor of Chicago.

       The concept of immunity being a bar to Section 1983 civil suits is a creation of the Supreme Court.[1] Presidents of the United States are protected by absolute immunity in civil actions.[2] When the Judiciary began to grant absolute immunity to Federal agencies, many of these agencies were organized and operated under the procedural safeguards provided by the Administrative Procedure Act. These safeguards seek to prevent violations of due process and equal protection.

       Mayors usually enjoy a lesser standard of immunity from civil suits for violations of Section 1983 called, qualified immunity. Immunity is an affirmative defense in the law, which means that a defendant must invoke it and then prove it applies as a shield against suit. The Supreme Court's reasoning for inventing immunity as a bar to Section 1983 suits was to allow public officials to perform their functions without continually being hailed into court by a disgruntled public, while also allowing civil actions, in the case of qualified immunity, where an official violates a clearly established law or right and has a malicious or suspect reason for doing so;

[T]he public interest requires decisions and actions to enforce laws for the protection of the public . . . . Public officials, whether governors, mayors or police, legislators or judges, who fail to make decisions when they are needed or who do not act to implement decisions when they are made do not fully and faithfully perform the duties of their offices. Implicit in the idea that officials have some immunity -- absolute or qualified -- for their acts, is a recognition that they may err. The concept of immunity assumes this and goes on to assume that it is better to risk some error and possible injury from such error than not to decide or act at all.[3]

There is a legitimate need for granting absolute immunity for Federal judges and Federal departments that operate with procedural safeguards. However, the public interest would be better served were the courts to more selectively scrutinize grants of immunity to local elected officials whose power can tend to become absolute and unfettered by anything but the Federal courts. The public good may be better served by having public officials acting cautiously in the shadow of Section 1983 than as in this case by mayors, who have no fear of personal liability for anything they do-not even grave offense to the First Amendment.

       History proves that political values are fickle and cultural mores change, but banning is an extraordinary thing. In 1943, Branch Rickey, who was president of the Brooklyn Dodgers decided he would recruit African Americans to play for the Dodgers. This was a monumental decision because at that point there was an unspoken "gentleman's agreement" and absolute ban on having African American baseball players that had been in effect since the 1880s. In 1945, Branch Rickey signed Jackie Robinson to a minor league contract. In 1947, the legendary Jackie Robinson walked onto Ebbets Field to play for the Dodgers at that same moment breaking the color barrier in major league baseball and violating its ban. This was many years before the United States Supreme Court would decide to outlaw school segregation in Brown v. Board of Education and long before Rosa Parks would refuse to give up her seat on the Cleveland Avenue bus.

       On the scheme of things, to be banned by a government or state intolerant of your views, lifestyle or color is not as nearly as bad as being stoned to death, but it can have severe if not fatal economic repercussions. It is also profoundly at war with the United States Constitution. I recently argued before the Court of Appeals for the Seventh Circuit, unsuccessfully, on the perils of granting absolute immunity to local government officials, who had decided to ban one person from part of City Hall, simply because they could-the officials never offered a reason, knowing they did not need one.

       In zoning matters, the City of Chicago and its alderpeople particularly enjoy flexing their political muscle and clout. The courts grant them broad discretion in blocking adult businesses and religious institutions based on some expressed "legitimate government interest." Their interpretation of this term is almost never questioned and zoning matters are so inherently boring that no one else can reasonably care. Aldermen also have the power to issue land use permissions and very few people have the financial resources to disagree with them on their zoning decisions by hailing them into Federal court.

       To be fair, even for a city second to none in the number of aldermen to be jailed--at least in its making of zoning decisions, other than allowing political expression under the First Amendment through graft, bribery and campaign contributions for preferential treatment, it is an extraordinary thing-even in Chicago-to announce a zoning decision based upon the expression of a religious view.

       Admittedly there are legitimate political motives for how politicians act-the aldermen in question and Mayor Emanuel care about their voting blocks and are likely conforming their speech in the interests of their re-elections and to pander to their electorate. They do not need to care about the Constitution anymore than the politicians who rabidly supported Jim Crow laws. Fortunately for Americans, our freedom of expression is not held hostage to political vicissitudes or cultural mores. We do not live under the Taliban. Those that support Mayor Emanuel's ban should remember what it means to have the government discriminate against you simply because they did not like your politics or the looks of you. The only reason Chick-Fil-A matters is that the protections of civil liberty granted by the United States Constitution must not be denied to anyone based on their expression of their views-whatever they may be and however much we may disagree with them. We have been down this road before remember?@

R. Tamara de Silva

August 1, 2012
Chicago, Illinois

R. Tamara de Silva is an independent trader and lawyer

Footnotes:
1. The concept of immunity did exist in the common law.

2. Nixon v. Fitzgerald, 457 U.S. 732 (1982)

3.   Scheuer v. Rhodes, 416 U.S. 232, 241-42 (1974)