Tag: law

Cross posted from The Stars Hollow Gazette

You know that dress or shirt that’s been hanging in your closet for years, you know that hideous shade of fuscia that was a fashion must have for barely a season but you had to buy it, well, there are some bills in Congress that are just like that, the Cyber Intelligence Sharing and Protection Act (CISPA) is one of those bills. On Friday, while everyone was distracted by the blizzard in the Northeast, House Intelligence Committee Chairman Mike Rogers (R-Mich.) and ranking member Rep. Dutch Ruppersberger (D-Md.)announced that they would reintroduce CISPA next week. Apparently alarmed by the recent hacks of government web sites and private banking information, this dynamic duo plan on reintroducing the same bill that the House passed last year that President Barack Obama’s advisors recommended he veto.

The bill, in the form it was presented in 2011,

would allow for the sharing of Internet traffic information between the U.S. government and certain technology and manufacturing companies. The stated aim of the bill is to help the U.S government investigate cyber threats and ensure the security of networks against cyberattack. [..]

CISPA has been criticized by advocates of Internet privacy and civil liberties, such as the Electronic Frontier Foundation, the American Civil Liberties Union, and Avaaz.org. Those groups argue CISPA contains too few limits on how and when the government may monitor a private individual’s Internet browsing information. Additionally, they fear that such new powers could be used to spy on the general public rather than to pursue malicious hackers. CISPA has garnered favor from corporations and lobbying groups such as Microsoft, Facebook and the United States Chamber of Commerce, which look on it as a simple and effective means of sharing important cyber threat information with the government.

Some critics saw CISPA as a second attempt at strengthening digital piracy laws after the anti-piracy Stop Online Piracy Act became deeply unpopular. Intellectual property theft was initially listed in the bill as a possible cause for sharing Web traffic information with the government, though it was removed in subsequent drafts

It is now clawing its way back to life. The ACLU is asking for our help to once again gear up to protect and preserve the right to freedom of the internet

Because of your activism last year, big and important changes were made to the Senate cyber bill, including significant privacy protections. Let’s do it again House-side. If the House wants smart cyber legislation that also protects privacy, it needs to ensure that the programs are civilian-led, minimize the sharing of sensitive personal information between government and corporations, and protect collected information from non-cyber uses.

So bone up on what CISPA does, see the many organizations from left to right who have opposed CISPA, compare it (pdf) to the far better legislation in the Senate, and read why even the Obama administration threatened to veto this bill last year. And get ready to fight for your right to online privacy once again.

This was what Internet Activist Aaron Swartz fought against when he called CISPA “The Patriot Act of the Internet”

Swartz told Russia Today that whereas SOPA was exclusively “about giving the government the power to censor the Internet,” CISPA has the same kind of censorship provisions but “is more like a Patriot Act for the Internet.”

“It sort of lets the government run roughshod over privacy protections and share personal data about you,” he explained, “take it from Facebook and Internet providers and use it without the normal privacy protections that are in the law. … It’s an incredibly broad and dangerous bill.”

“The thing about this bill is it doesn’t really have any protections against cyber threats,” Swartz added. “All it does is make people share their information. But that’s not going to solve the problem. What’s going to solve the problem is actual security measures, protecting the service in the first place, not spying on people after the fact.”

This bill needs to be stopped and quickly. The time to act is now, educate yourself, your family and friends to the danger this bill represents.

For Aaron and for us.

Cross posted from The Stars Hollow Gazette

Lewis Carol has nothing on the Obama administration.

Will Senators Filibuster Chuck Hagel’s Nomination to Get the Targeted Killing Memo?

by Marcy Wheeler, emptywheel

Eleven Senators just sent President Obama a letter asking nicely, for at least the 12th time, the targeted killing memo. They remind him of his promise of transparency and oversight. [..]

And asks – yet again – for “any and all memos.” [..]

But perhaps the most important part of this letter is that it refers not just to John Brennan’s nomination, but to “senior national security positions.”

   As the Senate considers a number of nominees for senior national security positions, we ask that you ensure that Congress is provided with the secret legal opinions outlining your authority to authorize the killing of Americans in the course of counterterrorism operations.

There are eleven signers of that letter: Ron Wyden (D-Ore.); Mike Lee (R-Utah); Mark Udall (D-Colo.); Chuck Grassley (R-Iowa); Jeff Merkley (D-Ore.); Susan Collins (R-Maine); Dick Durbin (Ill.); Patrick Leahy (D-Vt.); Tom Udall (D-N.M.); Mark Begich (D-Alaska); and  Al Franken (D- Minn.).

Wyden, Mark Udall, and Collins sit on the Senate Intelligence Committee that will consider John Brennan’s nomination to the CIA. Brennen is considered the architect of President Obama’s drone program and targeted assassination program.

While there is still a battle over the original memo that laid out the legal premise for the drone and assassination program, NBC News national investigative correspondent, Michael Isikoff, has obtained a 16 page white paper memo (pdf) that “provides new details about the legal reasoning behind one of the Obama administration’s most secretive and controversial polices:

The secrecy surrounding such strikes is fast emerging as a central issue in this week’s hearing of White House counterterrorism adviser John Brennan, a key architect of the drone campaign, to be CIA director.  Brennan was the first administration official to publicly acknowledge drone strikes in a speech last year, calling them “consistent with the inherent right of self-defense.” In a separate talk at the Northwestern University Law School in March, Attorney General Eric Holder specifically endorsed the constitutionality of targeted killings of Americans, saying they could be justified if government officials determine the target poses  “an imminent threat of violent attack.”

But the confidential Justice Department “white paper” introduces a more expansive definition of self-defense or imminent attack than described  by Brennan or Holder in their public speeches.  It refers, for example, to what it calls a “broader concept of imminence” than actual intelligence about any ongoing plot against the U.S. homeland.    

MSNBC’s Rachel Maddow doesn’t think that the Republicans would be foolish enough to filibuster Defense Secretary nominee Chuck Hagel and risk Senate Majority Leader Harry Reid (D-NV) invoking the nuclear option to end filibuster altogether. There is the slim possibility that the Senate Intelligence Committee could reject Mr. Brennan’s nomination for the CIA from a vote of the full Senate.

Ms. Maddow talked with Mr. Isikoff about the details of the memo and the legal justification for targeted drone attacks that American citizens without trial in the name of national security.

Not in our names.

Cross posted from The Stars Hollow Gazette

Rolling Stone‘s Matt Taibbi joins Bill to discuss the continuing lack of accountability for “too big to fail” banks which continue to break laws and act unethically because they know they can get away with it. Taibbi refers specifically to the government’s recent settlement with HSBC – “a serial offender on the money laundering score” – who merely had to pay a big fine for shocking offenses, including, Taibbi says, laundering money for both drug cartels and banks connected to terrorists.

Taibbi also expresses his concern over recent Obama appointees – including Jack Lew and Mary Jo White – who go from working on behalf of major banks in the private sector to policing them in the public sector.

Matt has more on Mary Jo White and her involvement with squashing the insider trading case against future Morgan Stanley CEO John Mack by Sec investigator Gary Aguirre.

There are a few more troubling details about this incident that haven’t been disclosed publicly yet. The first involve White’s deposition about this case, which she gave in February 2007, as part of the SEC Inspector General’s investigation. In this deposition, White is asked to recount the process by which Berger came to work at D&P. There are several striking exchanges, in which she gives highly revealing answers.

First, White describes the results of her informal queries about Berger as a hire candidate. “I got some feedback,” she says, “that Paul Berger was considered very aggressive by the defense bar, the defense enforcement bar.” White is saying that lawyers who represent Wall Street banks think of Berger as being kind of a hard-ass. She is immediately asked if it is considered a good thing for an SEC official to be “aggressive”:

   Q: When you say that Berger was considered to be very aggressive, was that a positive thing for you?

   A: It was an issue to explore.

Later, she is again asked about this “aggressiveness” question, and her answers provide outstanding insight into the thinking of Wall Street’s hired legal guns – what White describes as “the defense enforcement bar.” In this exchange, White is essentially saying that she had to weigh how much Berger’s negative reputation for “aggressiveness” among her little community of bought-off banker lawyers might hurt her firm.

   Q: During your process of performing due diligence on Paul Berger, did you explore what you had heard earlier about him being very aggressive?

   A: Yes.

   Q: What did you learn about that?

   A: That some people thought he was very aggressive. That was an issue, we really did talk to a number of people about.

   Q: Did they expand on that as to why or how they thought he was aggressive?

   A: I think and as a former prosecutor, sometimes people refer to me as Attila the Hun. I understand how people can get a reputation sometimes. We were trying to obviously figure out whether this was something beyond, you always have a spectrum on the aggressiveness scale for government types and was this an issue that was beyond real commitment to the job and the mission and bringing cases, which is a positive thing in the government, to a point. Or was it a broader issue that could leave resentment in the business community or in the legal community that would hamper his ability to function well in the private sector?

It’s certainly strange that White has to qualify the idea that bringing cases is a positive thing in a government official – that bringing cases is a “positive thing . . . to a point.” Can anyone imagine the future head of the DEA saying something like, “For a prosecutor, bringing drug cases is a positive, to a point?”

Somehow this sounds like more of the same at the from the Obama administration.  

Cross posted from The Stars Hollow Gazette

The secret memos giving the legal justification for drone attacks and “kill lists,” that President Barack Obama has refused to say even existed, are to be released to the two Congressional Intelligence Committees

Until Wednesday, the administration had refused to even officially acknowledge the existence of the documents, which have been reported about in the press. This week, NBC News obtained an unclassified, shorter “white paper” that detailed some of the legal analysis about killing a citizen and was apparently derived from the classified Awlaki memorandum. The paper said the United States could target a citizen if he was a senior operational leader of Al Qaeda involved in plots against the country and if his capture was not feasible.

Administration officials said Mr. Obama had decided to take the action, which they described as extraordinary, out of a desire to involve Congress in the development of the legal framework for targeting specific people to be killed in the war against Al Qaeda. Aides noted that Mr. Obama had made a pledge to do that during an appearance on “The Daily Show” last year.

Don’t get too excited, these memos are still classified and will only be released to the members of the two congressional committees consisting of 35 people selected by party leaders. Keep in mind two of those 35 members are Representatives Michelle Bachmann (R-MI) and Lynn Westmoreland (R-GA).

A point that Marcy Wheeler makes is this is being misreported, there is more than one memo. President Obama and Senators Ron Wyden (D-OR) and Dianne Weinstein (D-CA) have all referred to memos, plural, but people persist in reporting that there is one memo.  The white paper that MSNBC’s Michael Isikoff reported was given to Congress was not the memo we were looking for

Indeed, Ron Wyden has been referring to memos, in the plural, for a full year (even before, if Isikoff’s report is correct, this white paper was first provided to the Committees in June 2012).

And there is abundant reason to believe that the members of the Senate committees who got this white paper aren’t convinced it describes the rationale the Administration actually used. Just minutes after Pat Leahy reminded the Senate Judiciary Committee they got the white paper at a hearing last August, John Cornyn said this,

   Cornyn: As Senator Durbin and others have said that they agree that this is a legitimate question that needs to be answered. But we’re not mere supplicants of the Executive Branch. We are a coequal branch of government with the Constitutional responsibility to conduct oversight and to legislate where we deem appropriate on behalf of our constituents. So it is insufficient to say, “pretty please, Mr. President. pretty please, Mr. Attorney General, will you please tell us the legal authority by which you claim the authority to kill American citizens abroad?” It may be that I would agree with their legal argument, but I simply don’t know what it is, and it hasn’t been provided. [my emphasis]

More importantly, one question that Wyden keeps asking would be nonsensical if he believed the content of this white paper reflected the actual authorization used to kill Awlaki.

I have no idea how this will effect John Brennan’s confirmation hearing before the Senate Select Committee On Intelligence but it should be interesting considering some of the questions that Sen. Ron Wyden (D-OR) intends to ask.

    Every American has the right to know when their government believes that it is allowed to kill them.

   The Justice Department memo that was made public yesterday touches on a number of important issues, but it leaves many of the most important questions about the President’s lethal authorities unanswered.  Questions like ‘how much evidence does the President need to decide that a particular American is part of a terrorist group?’, ‘does the President have to provide individual Americans with the opportunity to surrender?’ and ‘can the President order intelligence agencies or the military to kill an American who is inside the United States?’ need to be asked and answered in a way that is consistent with American laws and American values.  This memo does not answer these questions.

Cross posted from The Stars Hollow Gazette

The White House announced a National Day of Civic Hacking, June 1 – 2, 2013, as the internet continues to mourn the hacker and activist, Aaron Swartz, who died of suicide at age 26. Aaron’s partner Taren Stinebrickner-Kauffman, executive director and founder of SumofUs.org joins host Chris Hayes; Lawrence Lessig, Roy L. Furman Professor of Law at Harvard Law School; Susan Crawford, professor for the Center on Intellectual Property & Information Law Program at Carodozo School of Law; and Ta-Nehisi Coates, senior editor for The Atlantic on the Up with Chris panel to discuss the legacy of Aaron Swartz.

Cross posted by The Stars Hollow Gazette

“Too big to fail” now according to the Justice Department, “too big to jail.” The PBS news series, Frontline “investigates why Wall Street’s leaders have escaped prosecution for any fraud related to the sale of bad mortgages” in its presentation of “The Untouchables.”

Phil Angelides was chairman of the Financial Crisis Inquiry Commission, which was created by Congress in 2009 to investigate the causes of the crisis. In its report, submitted in January 2011, the commission concluded that the crisis was avoidable, a result of excessive risk taking, failures of regulation and poorly prepared government leaders. This is the edited transcript of an interview conducted on Oct. 11, 2012.

Lanny Breuer serves as assistant attorney general for the Department of Justice’s Criminal Division. He told FRONTLINE that when fraud from the financial crisis has been detected, the Department of Justice has pursued charges. “But when we cannot prove beyond a reasonable doubt that there was criminal intent, then we have a constitutional duty not to bring those cases,” Breuer said. This is the edited transcript of an interview conducted on Nov. 30, 2012.

The Justice Department’s initial response to the financial crisis did not take long to materialize. In June 2008, three months before the Lehman Brothers collapse, the department brought its first criminal case, charging two former Bear Stearns executives with securities fraud for their alleged roles inflating the housing bubble.

A little more than a year later, a jury found the executives not guilty, dealing the DOJ an early setback. Since then, government investigations into the crisis have almost exclusively centered on civil charges, which requires prosecutors establish guilt beyond a preponderance of the evidence. The bar is higher in criminal cases, requiring they prove guilt beyond a reasonable doubt.

Here are 10 of the most prominent of those cases to date. In nearly all, the government won multi-million dollar settlements, but the companies and officials involved were not required to admit wrongdoing.

The federal rescue of Wall Street didn’t fix the economy – it created a permanent bailout state based on a Ponzi-like confidence scheme. And the worst may be yet to come

It has been four long winters since the federal government, in the hulking, shaven-skulled, Alien Nation-esque form of then-Treasury Secretary Hank Paulson, committed $700 billion in taxpayer money to rescue Wall Street from its own chicanery and greed. To listen to the bankers and their allies in Washington tell it, you’d think the bailout was the best thing to hit the American economy since the invention of the assembly line. Not only did it prevent another Great Depression, we’ve been told, but the money has all been paid back, and the government even made a profit. No harm, no foul – right?

Wrong.

It was all a lie – one of the biggest and most elaborate falsehoods ever sold to the American people. We were told that the taxpayer was stepping in – only temporarily, mind you – to prop up the economy and save the world from financial catastrophe. What we actually ended up doing was the exact opposite: committing American taxpayers to permanent, blind support of an ungovernable, unregulatable, hyperconcentrated new financial system that exacerbates the greed and inequality that caused the crash, and forces Wall Street banks like Goldman Sachs and Citigroup to increase risk rather than reduce it. The result is one of those deals where one wrong decision early on blossoms into a lush nightmare of unintended consequences. We thought we were just letting a friend crash at the house for a few days; we ended up with a family of hillbillies who moved in forever, sleeping nine to a bed and building a meth lab on the front lawn.

Up Date: After his appearance on “Frontline”, Yves Smith at naked capitalism delightedly announced the news that Lanny Breuer, former Covington & Burling partner and more recently head of the criminal division at the Department of Justice, had his resignation leaked today.

Never mind resign, why hasn’t Obama fired him?

Cross posted from The Stars Hollow Gazette

Back in July, 2012 while returning from  Jazz at Lincoln Center’s Midsummer Night’s Swing, Caroline Stern, 55, and her boyfriend George Hess, 54, were arrested, handcuffed and held by the New york City Police for dancing  the “Charleston” on the subway platform.

“We were doing the Charleston,” Stern said. That’s when two police officers approached and pulled a “Footloose.”

“They said, ‘What are you doing?’ and we said, ‘We’re dancing,’ ” she recalled. “And they said, ‘You can’t do that on the platform.’ ”

The cops asked for ID, but when Stern could only produce a credit card, the officers ordered the couple to go with them – even though the credit card had the dentist’s picture and signature.

When Hess began trying to film the encounter, things got ugly, Stern said.

“We brought out the camera, and that’s when they called backup,” she said. “That’s when eight ninja cops came from out of nowhere.”

Hess was allegedly tackled to the platform floor, and cuffs were slapped on both of them. The initial charge, according to Stern, was disorderly conduct for “impeding the flow of traffic.”

They sued. They won. While NYC Councilman Peter Valone complains that “At $75,000 a dance, the city’s going to go bankrupt sooner than we thought,” he said. “Here, it looks like it was the taxpayers who got served.”

But whose fault is that, Mr. Valone? It’s not illegal to dance in the subway. Maybe the problem is an out of control police department:

For fiscal year 2011, New York City gave out $185.6 million to settle suits against the NYPD. That number rounds out to about $70 per resident, according to the New York Post. Though the New York City Law Department insists there is no blanket policy on settlements, City Councilman Peter Vallone Jr., who also heads the City Council’s Public Safety Committee, said such settlements have only increased since he took office in 2002. [..]

New York Civil Liberties Union head Donna Lieberman insists the city should start learning from suits, rather than just paying to get rid of them.

The city is still facing million in lawsuits by groups and individuals, including two city council members, resulting from brutal, unlawful tactics and false arrests from the Occupy Wall Street protests.

Mayor Michael Bloomberg and Police Commissioner Ray Kelly are to blame for this. Perhaps Mr. Vallone needs to stop blaming the lawyers for settling these suits, which would cost even more to litigate, and look at the real cause, an out of control mayor and police department.

Cross posted from The Stars Hollow Gazette

This past week calls by Republicans to not raise debt ceiling got little push back from the talking heads this Sunday as Senate Minority Leader Mitch McConnell made the morning rounds insinuating that it might not be so bad. Lets get something straight that the MSM village is allowing to happen here. The Republicans are conflating passing a budget bill (future spending) with making the payment on those expenditures (past spending). Those two things are NOT the same. The debt ceiling addresses the later and the consequences of even threatening to not pay US debts would have the same, if not greater, negative results as it did in 2011 when the feral children of the House held it hostage. The result of that debacle was the current sequestration bill and “fiscal cliff” crisis.

The inflation that everyone from the Federal Reserve to Wall St. wants to the one thing that would put the US in the same boat as Greece, facing increasingly higher interest rate payments. In other words the debt ceiling and the budget resolution are NOT the same and should not be treated the same.  The sequester and the budget resolution are negotiable; the debt ceiling is not.

This idea of holding the debt ceiling is in fact so dangerous to the world economy that politicians, economist and pundits are calling for President Barack Obama to act by using possibly the only legal means he may have, mint a Trillion Dollar Platinum Coin. Even New York Times columnist and economist, Paul Krugman has change his mind calling for the president to be ready to mint that coin:

Should President Obama be willing to print a $1 trillion platinum coin if Republicans try to force America into default? Yes, absolutely. He will, after all, be faced with a choice between two alternatives: one that’s silly but benign, the other that’s equally silly but both vile and disastrous. The decision should be obvious. [..]

It’s easy to make sententious remarks to the effect that we shouldn’t look for gimmicks, we should sit down like serious people and deal with our problems realistically. That may sound reasonable – if you’ve been living in a cave for the past four years.Given the realities of our political situation, and in particular the mixture of ruthlessness and craziness that now characterizes House Republicans, it’s just ridiculous – far more ridiculous than the notion of the coin.

So if the 14th amendment solution – simply declaring that the debt ceiling is unconstitutional – isn’t workable, go with the coin.

If you think that this possibility isn’t serious, consider the fact that the feral children of the House now do introducing legislation to prevent the president from minting the coin

And now a US Congressman has come out against the coin idea and is proposing a law to ban it (via Matthew O’Brien). Ironically, this action actually legitimizes the coin option. [..]

In the past, hiking the debt ceiling was pretty painless, but some in the GOP are staunchly opposed to doing it, raising the specter that the US will default on its obligations.

It’s because of this that some people are getting more excited about the “Platinum Option,” which refers to a technical loophole in the law that allows the Treasury to create platinum coins in any denomination, theoretically up to a trillion and beyond. [..]

We’ve posted his full press release below, but the key thing here is that the idea is now legitimized, as a GOP Congressman implicitly acknowledges that the coin idea is currently legal.

Note that in his press release, the Congressman uses the flawed analogy of comparing the US government to a small business. Unlike governments, small businesses can’t print money. And small businesses can’t “deficit spend,” the way governments can.

The opponents of this idea are also wrong. Josh Borrow, who writes at Bloomberg‘s The Ticker, enumerates why their arguments are all wrong and concludes:

Minting the platinum coin would be less economically damaging than any of the above options, which is why Obama should announce he will pursue it if the debt ceiling is not raised. Hopefully, inflation hawks will be so alarmed by the president’s intention to use his direct monetary authority that they will choose to cut a deal and we’ll never actually get to the minting stage.

But if Republicans call Obama’s bluff, he should be ready to mint that coin – – and to save the economy by doing so.

Cross posted from The Stars Hollow Gazette

The next “plateau” in the on going “Mythical Cliff” debate is the unconstitutional debt ceiling which the Republicans are now threatening to take hostage to demand draconian cuts to social security and other programs while sparing defense. With the settlement over the Obama tax cuts out of the way, the $1 trillion dollars in sequestration cuts are scheduled to take effect in two month at the same time authorized spending will “hit the roof,” setting up the showdown between the feral Tea Party dominated Republican held House, the roadblocked filibustered Senate and the ever capitulating White House. Still very much in danger are Social Security and Medicare which President Barack Obama has refused to take off the table and keeps offering up as sacrifice as part of an agreement. To get what they want the Republicans are willing to let the government default on its debt

Sen. Pat Toomey (R-Pa.) said on MSNBC’s “Morning Joe” this week, “we Republicans need to be willing to tolerate a temporary, partial government shutdown” in order to achieve spending cuts and entitlement reforms.

On Friday morning, meanwhile, House Speaker John Boehner (R-Ohio) told members that he was prepared to use the debt ceiling fight as leverage to get spending cuts. According to a source in the room, Boehner showed fellow lawmakers the results of a survey by the Winston Group, a GOP polling firm, which showed that 72 percent of Americans “agree any increase in the nation’s debt limit must be accompanied by spending cuts and reforms of a greater amount.”

“The debate is already under way,” the speaker said.

Elsewhere on Friday morning, Sen. John Cornyn (R-Texas), the second-ranking Senate Republican, penned an op-ed making a similar argument.

   Republicans are more determined than ever to implement the spending cuts and structural entitlement reforms that are needed to secure the long-term fiscal integrity of our country.

   The coming deadlines will be the next flashpoints in our ongoing fight to bring fiscal sanity to Washington. It may be necessary to partially shut down the government in order to secure the long-term fiscal well being of our country, rather than plod along the path of Greece, Italy and Spain. President Obama needs to take note of this reality and put forward a plan to avoid it immediately.

Calling this a “government shutdown,” even a partial shut down, is just plain spin that will result in an even deeper recession than the last one from which we have yet to fully recover. In a letter from Matthew E. Zames, a managing director at JPMorgan Chase and the chairman of the Treasury Borrowing Advisory Committee lists what will happen if the debt ceiling is not raised:

First, foreign investors, who hold nearly half of outstanding Treasury debt, could reduce their purchases of Treasuries on a permanent basis, and potentially even sell some of their existing holdings. [.]]

Second, a default by the U.S. Treasury, or even an extended delay in raising the debt ceiling, could lead to a downgrade of the U.S. sovereign credit rating. [..]

Third, the financial crisis you warned of in your April 4th Letter to Congress could trigger a run on money market funds, as was the case in September 2008 after the Lehman failure. [..]

Fourth, a Treasury default could severely disrupt the $4 trillion Treasury financing market, which could sharply raise borrowing rates for some market participants and possibly lead to another acute deleveraging event. [..]

Fifth, the rise in borrowing costs and contraction of credit that would occur as a result of this deleveraging event would have damaging consequences for the still-fragile recovery of our economy. [..]

Finally, (..) because the long-term risks from a default are so large, a prolonged delay in raising the debt ceiling may negatively impact markets well before a default actually occurs.

Obviously, the Republicans did not learn from the last hostage threat that resulted in a market down turn and the downgrade of the US credit rating. That debacle resulted in an extension of the Bush tax cuts and, now the permanent Obama tax cuts. Without tax increases as leverage the President and the Democrats have very little wiggle room.

That brings us to the elephant in the room that most of the MSMS, some so called progressive blogs and pundits, including Nobel Prize winning economist Paul Krugman, have laughed off as “not serious,” the “Trillion Dollar Platinum Coin Solution” (TPC). Guess what, they aren’t laughing at this any more. We may not be able to print money but we can mint coins of any denomination. From Paul Krugman:

The peculiar exception is that clause allowing the Treasury to mint platinum coins in any denomination it chooses. Of course this was intended as a way to issue commemorative coins and stuff, not as a fiscal measure; but at least as I understand it, the letter of the law would allow Treasury to stamp out a platinum coin, say it’s worth a trillion dollars, and deposit it at the Fed – thereby avoiding the need to issue debt. [..]

In reality, to pursue the thought further, the coin really would be as much a Federal debt as the T-bills the Fed owns, since eventually Treasury would want to buy it back. So this is all a gimmick – but since the debt ceiling itself is crazy, allowing Congress to tell the president to spend money then tell him that he can’t raise the money he’s supposed to spend, there’s a pretty good case for using whatever gimmicks come to hand.

But there is a solution to preventing a real fiscal crisis and Josh Barrow at Bloomberg has an ingenious solution to both the debt ceiling and the TPC and why we need to “go off the platinum cliff”:

This law was intended to allow the production of commemorative coins for collectors. But it can also be used to create large-denomination coins that Treasury can deposit with the Fed to finance payment of the government’s bills, in lieu of issuing debt.

What the law should say is that the executive branch may borrow to pay whatever obligations the federal government has, but may not print. Unfortunately, when we hit the debt ceiling, the situation will be backwards: The administration will not be allowed to borrow, but it can print in unlimited quantities.

This points toward an interesting solution.

If Republicans start issuing a list of demands that must be met before they will raise the debt ceiling, Obama should simply say that he will issue platinum coins as necessary to pay government bills if he cannot borrow. But, to avoid causing long-term inflation expectations to skyrocket, he should pledge that he will have the Treasury issue enough bonds to buy back all the newly issued currency as soon as it is allowed to do so.

And then he should offer to sign a bill revoking his authority to issue platinum coins — so long as that bill also abolishes the debt ceiling. The executive branch will give up its unwarranted power to print if the legislative branch will give up its unwarranted restriction on borrowing to cover already appropriated obligations.

Here that Barack? Dare them to destroy the face and credit of this country, then flip that coin on the table along with the bill. Wanna bet they’ll bite?

Meanwhile, we need to encourage our weak kneed president to do what Atrios said

Cross posted from The Stars Hollow Gazette

Last summer it was revealed that one of the world’s largest banks based, HSBC, base in Britain, had been laundering billions of dollars for Mexican drug cartels and skirting US government bans against financial transactions with Iran and other countries that aid Al Qaeda and other terrorist groups. In a stunning move during a hearing before the  Senate Permanent Subcommittee on Investigations chief compliance officer, David Bagley, took the blame and resigned.

Last week the federal government and New York State announced a settlement with HSBC:

In a filing in Federal District Court in Brooklyn, federal prosecutors said the bank had agreed to enter into a deferred prosecution agreement and to forfeit $1.25 billion. The four-count criminal information filed in the court charged HSBC with failure to maintain an effective anti-money laundering program, to conduct due diligence on its foreign correspondent affiliates, and for violating sanctions and the Trading With the Enemy Act.

“HSBC is being held accountable for stunning failures of oversight – and worse – that led the bank to permit narcotics traffickers and others to launder hundreds of millions of dollars through HSBC subsidiaries, and to facilitate hundreds of millions more in transactions with sanctioned countries,” Lanny A. Breuer, the head of the Justice Department’s criminal division, said in a statement. [..]

HSBC, based in Britain, has also agreed to pay the Office of the Comptroller of the Currency, one of the bank’s central regulators, an additional $500 million as part of a civil penalty. The Federal Reserve will be paid a $165 million civil penalty. [..]

HSBC also entered into a deferred prosecution agreement with the Manhattan district attorney’s office. As part of that agreement, HSBC admitted that it violated New York State law.

Just like the mortgage and banking fraud that was uncovered during the financial crisis, there will be no criminal charges. The fines that were levied are tantamount to about five weeks of income for the bank. Contributing editor for the Rolling Stone, Matt Taibbi points out the outrageous incongruity of this settlement:

If you’ve ever been arrested on a drug charge, if you’ve ever spent even a day in jail for having a stem of marijuana in your pocket or “drug paraphernalia” in your gym bag, Assistant Attorney General and longtime Bill Clinton pal Lanny Breuer has a message for you: Bite me. [..]

The banks’ laundering transactions were so brazen that the NSA probably could have spotted them from space. Breuer admitted that drug dealers would sometimes come to HSBC’s Mexican branches and “deposit hundreds of thousands of dollars in cash, in a single day, into a single account, using boxes designed to fit the precise dimensions of the teller windows.”

This bears repeating: in order to more efficiently move as much illegal money as possible into the “legitimate” banking institution HSBC, drug dealers specifically designed boxes to fit through the bank’s teller windows. [..]

Though this was not stated explicitly, the government’s rationale in not pursuing criminal prosecutions against the bank was apparently rooted in concerns that putting executives from a “systemically important institution” in jail for drug laundering would threaten the stability of the financial system. The New York Times put it this way:

   Federal and state authorities have chosen not to indict HSBC, the London-based bank, on charges of vast and prolonged money laundering, for fear that criminal prosecution would topple the bank and, in the process, endanger the financial system. [..]

So there is absolutely no reason they couldn’t all face criminal penalties. That they are not being prosecuted is cowardice and pure corruption, nothing else. And by approving this settlement, Breuer removed the government’s moral authority to prosecute anyone for any other drug offense. Not that most people didn’t already know that the drug war is a joke, but this makes it official.

Apparently this settlement has garnered some bipartisan concerns from Senators Jeff Merkley (D-OR) and Charles Grassley. In separate statements released from their offices, they criticized the Justice Department for not sending a stronger message to the banking industry. Sen. Grassley said it best:

   The Department has not prosecuted a single employee of HSBC-no executives, no directors, no AML compliance staff members, no one. By allowing these individuals to walk away without any real punishment, the Department is declaring that crime actually does pay. Functionally, HSBC has quite literally purchased a get-out-of-jail-free card for its employees for the price of $1.92 billion dollars.

   There is no doubt that the Department has “missed a rare chance to send an unmistakable signal about the threat posed by financial institutions willing to assist drug lords and terror groups in moving their money.” One international banking expert went as far as to argue that, despite the “astonishing amount of criminal behavior” from HSBC employees, the DPA is no more than a “parking ticket.”

But, as David Dayen at FDL News notes there are crickets from certain key senators:

Matt Stoller makes a very good point here: where is Patrick Leahy on this? He has made no public statement on the HSBC case, despite being the co-author of the Fraud Enforcement and Recovery Act, which was supposed to deliver funds toward prosecuting fraudulent big bank activity (it never actually did). Grassley, a co-author, has spoken out. Why not Leahy?

Matt Taibbi sat down with Amy Goodman and Juan Gonzalez at Democracy Now to discuss the settlement:

Transcript can be read here

Now, not only are the banks “too big to fail“, they are “too big to jail.”

Cross Posted from The Stars Hollow Gazette

The latest efforts by state authorities to protect the police who abuse their authority has been dealt a blow by the US Supreme Court. From the Chicago Tribune:

The Supreme Court refused on Monday to revive a controversial Illinois law that prohibited audio recordings of police officers acting in public places, a ban that critics said violated the First Amendment of the U.S. Constitution.

Without comment, the court on Monday let stand a May 8 ruling by the 7th U.S. Circuit Court of Appeals in Chicago that blocked enforcement of the law, which had made it a felony to record audio of conversations unless all parties consented.

In a 2-1 ruling, the 7th Circuit called the law “the broadest of its kind,” and said it likely violated the free speech and free press guarantees in the First Amendment.

MSNBC “The Last Word“ host, Lawrence O’Donnell, commented on the importance of this ruling during his “Rewrite” segment:

“After the Rodney King beating, Chicago police decided to use an old anti-eavesdropping law to protect themselves-a law which basically made it a felony to record a conversation unless all parties agree to be recorded,” said O’Donnell, giving part of the back-story. “That, in effect, meant you couldn’t shoot video of Chicago police because, of course, video recording normally includes sound.” [..]

“The good police officers in this country, which is to say most of the police officers in this country, have no problem with the Supreme Court’s decision this week,” said O’Donnell. “Thanks to federal judges appointed by both Democratic and Republican presidents, some Chicago cops-the bad ones-have something new to fear, tonight: your video camera.”

George Washington University law professor Jonathan Turley also commented about the Court’s decision and had some very harsh criticism of Cook County State’s Attorney Anita Alvarez:

As a native Chicagoan, I remain astonished that citizens have allowed Alvarez to remain in office as she has publicly sought to strip them of their rights and block a tool that has been used repeatedly to show police abuse. For a leading and generally liberal jurisdiction, Chicago has the ignominy and dishonor of leading the effort to fight core civil liberties in this area. [..]

It is otherworldly to see these abuses occurring in two usually progressive jurisdictions of California and Illinois. Alvarez has become the leader of this rogue’s gallery of prosecutors who have strived to jail their own citizens for monitoring police in public. It is, to put it bluntly, a disgrace. While Alvarez failed in her latest bid, she and other prosecutors remain undeterred in their desire to see citizens punished for such videotapes – tapes that have featured prominently in establishing false arrests and police abuse. Before such filming, abuse claims were overwhelmingly rejected with the denials of the officers. Now, there is often undeniable proof – proof that Alvarez and others want barred under the threat of criminal prosecution.

Prof. Turley also points out that the trend to protect bad police is not over:

We have been discussing the continued effort of prosecutors and police to jail citizens who photograph or videotape police in public. For a prior column, click here. Now, in California, another such arrest has been videotaped in California as Daniel J. Saulmon was charged with resisting, delaying and obstructing an officer when the video shows him standing at a distance and not interfering in any way with the arrest.

The officer immediately demanded to know what Saulmon is doing when it is obvious, as Saulmon indicates, that he is filming the scene. Saulmon states that he does not want to speak to the officer when asked for his identification and the officer immediately puts him under arrest. Ironically, the officer then tells him that he doesn’t need any identification since that will be handled at the booking. [..]

Saulmon reportedly spent days in jail. Such jailings serve as a deterrent for abusive police officers since few citizens want to face such incarceration as well as the cost of defending against criminal charges. Even when later thrown out (which often happen to such charges), the message is sent and the officers are rarely disciplined. I have little doubt that this case will be thrown out. The question is whether people in California will demand action to discipline the officer, who swore to charges that are clearly invalid and abusive.

And these cases from Maryland and Massachusetts

In Maryland in July, Anthony Graber got a well-deserved speeding ticket, but his real mistake was posting footage from his motorcycle helmet-cam on YouTube. It showed an irate off-duty, out-of-uniform officer pulling him over with his gun drawn. Prosecutors obtained a grand jury indictment against Graber on felony wiretap charges, which carry a 16-year prison sentence.

In Boston in August, the U.S. 1st Circuit Court of Appeals ruled unambiguously that the Constitution protects citizen videographers filming in public. In that case, attorney Simon Glik was walking past the Boston Common on Oct. 1, 2007, when he came upon three Boston officers arresting a man. Glik turned on his cellphone camera after hearing a witness say the police were being abusive. An officer told Glik to turn off his camera. When Glik refused, he was arrested for violation of the state wiretap statute, disturbing the peace and, for good measure, aiding in the escape of a prisoner.

The charges were dismissed after a public outcry, but in a later civil rights case, city attorneys fought to deny citizens the right to videotape police. The court rejected Boston’s arguments and found that the police had denied Glik his 1st and 4th Amendment rights.

Score one for the 1st and 4th Amendments.