It doesn't make sense to let the Robber barrons get off free

The news about Massachusetts and Nevada potentially having to give up foreclosure fraud suits in order to join the servicing settlement brings up a larger point I’d like to make. Some people criticized me for this post about the “substantial” payment of the settlement using investor money, saying that it read more like a Wall Street Journal story than something on a progressive website. The implication here is that the top-line priority should be relief for homeowners who were damaged in the crisis, and not necessarily whether banks pay or investors pay.

I actually don’t think that’s right, and I suspect a large swath of the progressive community would agree with me on this. I’m going to try and explain my reasoning.

One of the dominant, if not the dominant, feature of the past decade or so of American politics has been lack of accountability. The issues involved range from supporting the Iraq war to committing acts of torture to the economic crash. But the core value being transgressed is the same: the perpetrators of the dishonest, illegal, and damaging acts never get held accountable. As Inside Job director Charles Ferguson writes in a masterful post,

It has now been three and a half years since the financial crisis of September 2008… In Mr. Obama’s three years in office, not a single U.S. bank or senior financial executive has been convicted of any crime (or even prosecuted), or had their assets confiscated.

The various task forces and commissions of inquiry empowered to do this job were toothless at best. The SEC, to use one example, has been actively harmful, granting exemptions to violations of securities fraud and steering through settlements that don’t even force the guilty party to admit wrongdoing. In fact, the SEC continued to bestow special privileges to firms that violated securities laws. The current enforcement chief, Robert Khuzami, was the general counsel for Deutsche Bank when they were designing the securitization fraud schemes over which Khuzami, in his role co-chairing the new RMBS working group on which Eric Schneiderman will also serve, is supposed to be investigating.

All of this – the revolving door, the lack of accountability, the absurd profits and bonuses that returned to Wall Street before any recovery took hold elsewhere, have frustrated and angered people who want to see some sign of a functioning government on these issues. They have become deeply cynical by years of neglect and implicitly sanctioned abuse. And they want to see, for once, an enforcement action where the banks actually pay for the damage they caused.

Some would argue that this is merely bloodthirsty. The key, in this telling, is that homeowners get the relief they need. By settling on foreclosure fraud issues and continuing a robust and aggressive investigation on securitization and origination issues, you can build that “second table,” to force the banks to deliver more relief to homeowners. That will be a measure of accountability, with the banks paying to help the people they hurt.

But here’s the thing. When we talk about this settlement, we’re talking about waving away pervasive conduct over a decade if not more, which has made a mockery of state courts, allowed banks to avoid billions in recording fees and compromised the land titling system in America for private property, something that economist Hernando de Soto believes is the fundamental building block of civilization and the basis for the rule of law. If you give a pass on that, even as we move to a next stage and try to preserve claims and investigations for later, you are allowing these compromises and breakdowns to occur without making those responsible have to suffer much at all.

That just isn’t going to fly with a mass of people. Moreover, it’s very bad economics. [cont'd] Simon Johnson in his influential article The Quiet Coup talked about how “breaking the financial oligarchy that is blocking essential reform” is absolutely essential to any ultimate economic recovery. Furthermore, Professor Mary Kreiner Ramirez of Washburn University wrote a compelling white paper about “criminal affirmance,” and the implications of failing to prosecute financial crimes. Basically it invites them to continue.

Recent financial scandals and the relative paucity of criminal prosecutions in response suggest a new reality in the criminal law system: some wrongful actors appear above the law and immune from criminal prosecution. As such, the criminal prosecutorial system affirms much of the wrongdoing giving rise to the crisis. This leaves the same elites undisturbed at the apex of the financial sector, and creates perverse incentives for any successors. Further, this undermines the legitimacy of the rule of law and encourages even more lawlessness among the entire population. These considerations transcend deterrence as well as retribution as a traditional basis for criminal punishment. Affirmance is far more costly and dangerous with respect to the crimes of powerful elites that control large organizations than can be accounted for under traditional nations of deterrence. Few limits are placed on a prosecutor’s discretionary decision about whom to prosecute, and many factors against prosecution are available, especially in resource-intensive white collar crime prosecutions.

Indeed, the fact that robo-signing is still ongoing offers powerful testimony to Ramirez’ argument.

Now, it’s true we don’t live in a perfect world. We have 50 states with jurisdiction over servicing, for the most part, and 50 different personalities in the AG offices who would be in the lead of demanding accountability. As a senior Administration official put it to me, by settling on issues of foreclosure and servicing, which did its biggest damage in sand states where the state partners include Republicans like Pam Bondi of Florida and Thomas Horne of Arizona, who haven’t shown much interest in real accountability, and focusing on issues of securitization, where all the action really takes place in Delaware and New York, with aggressive prosecutors (along with some big states with large pension funds like California and Illinois), there’s a better chance of getting some justice around these issues.

But there’s justice in the form of just compensation and there’s justice in the form of, well, what justice is always described as in a criminal context – deterrence. No financial penalty will do as much to prevent future conduct of this type as a senior executive being sent to jail. And the failure of having accountability on that level is like a festering wound at the heart of our politics. I’ll give Charles Ferguson the last word:

So yes, it’s absurd, and rather disgusting. But it must also be said that President Obama is not alone in prostrating himself before the financial sector. Congress is no better, and neither are Obama’s likely opponents in the presidential race. Newt Gingrich screamed about government interference while he was being paid $1.6 million by Freddie Mac’s chief lobbyist for “conservative outreach.” In Mitt Romney, we have someone who thinks it’s perfectly OK to have a tax rate of 14 percent on over $20 million per year in unearned income, and who wants to increase taxes on the poor while reducing them further for the wealthy. Unfortunately, the power of financial sector money has by now produced a pervasive, bipartisan systemic disease in American politics, of which the president’s recent speech is merely one example among many.

You might have noticed this past week that the Department of Justice has seemingly declared war on Medical Marijuana dispensaries. The first salvo was probably at the end of September when the ATF issued a statement that it is illegal for medical marijuana users to use firearms. Since then, the four California US Attorneys have declared that California Medical Marijuana dispensaries have to close within 45 days:

U.S. attorneys in California are threatening to seize the properties of landlords leasing space to marijuana dispensaries, signaling a concerted push to rein in the state’s burgeoning medical pot trade.

Letters sent in recent days to targeted dispensaries in San Diego, San Francisco, Marin and the federal district that includes Sacramento demand that operators or property owners halt marijuana sales within 45 days.

In Colorado, the Denver Post reported that Colorado banks will no longer work with marijuana dispensaries for fear of facing federal charges and the IRS has ruled that dispensaries are not eligible for standard business deductions and owe millions in back taxes.

Last night, Jeff Kaye had this post where he wonders if the crackdown on medical marijuana dispensaries is to distract from the fall out of the “Fast and Furious” ATF scandal. My personal belief is they are going after the Medical Marijuana Dispensaries because they are “easy wins.”

Back in the mid/late ’90s, I spent Thanksgiving one year with one of my first cousins and his family. We were sitting around before the meal talking about this and that, when the cousin’s oldest son asked why it was that the cops would pull him over just for a having a “Phish” sticker on his car. His father and I looked at each other and laughed and I told him, “You’re a freebie. He’s lazy and wants an easy bust so thinks the Phish sticker is a tell. It’s today’s Grateful Dead sticker.”

Medical Marijuana Dispensaries are the freebie. Even though closing them will have a negative effect on crime, lazy prosecutors are going after what can best be described as low-hanging fruit.

This was also the week where President Obama decided to declare the banksters were just abusing the system and not really breaking any laws. I guess his Magic 8 Ball must have told him this was so as I don’t recall hearing of the DoJ actually doing any criminal investigations, even when folks such as masaccio and Cynthia Kouril have pretty much laid out the prosecution case in a number of posts on Foreclosure Fraud the past few years. The Financial Crisis Inquiry Commission’s report also offered prosecutors a nice map of areas where criminal investigations might lead to prosecutions as did Senator Levin.

The problem is, these types of investigations and charges require hard work against deep pocketed defendants with no guarantees of convictions. On the other hand, even though Medical Marijuana Dispensaries may be fully compliant with the various state laws they operate under, they are easy targets for the DoJ looking for scores rather than going after the criminals who have caused the most harm to the country.

I won’t hold my breath for the DoJ and President Obama to actually go after the major class of criminals who are still trying to hold the world economy hostage, but I do know that the Medical Marijuana Dispensaries have done very little harm to most people. Unlike the WATB banksters.

And the video is because I can.

(photo: KeithBurtis)

Abby Philip and Josh Gerstein at Politico have an excellent piece up on the state of Executive Branch nominations in the Obama Administration.

It’s crunch time for the White House to get key executive branch jobs filled before the end of President Barack Obama’s first term.

Dozens of top posts in both the executive branch and the judiciary remain vacant, while some of those who started near the beginning of the administration are bailing out.

Nominees who aren’t confirmed by the Senate by the end of this year likely will become tangled in election-year politics, given Republican hopes of taking the White House, the Senate or both. If Obama wants a good shot at getting his nominees through this year, Hill veterans say, names need to reach the Senate by the summer recess.

Adding to the heightened urgency for action: Many of the unfilled posts deal with Obama’s major policy priorities, including financial regulatory reform, immigration and health care. Not coincidentally, those positions also are some of the most likely to become ensnared in partisan disputes.

Go read their full article, it is a good across the board discussion on nominees and where we stand in various areas of interest.

There are two areas of the Politico piece I want to draw attention to. The first is the critical importance of work and support by the White House for their nominees and the nomination process.

But one former official said much of the blame for the slow pace lies with the White House.

“A lot of fingers have been pointed at the Senate,” said Chase Untermeyer, who served as director of presidential personnel for President George H.W. Bush. “I always say that two-thirds of the job is on the executive side.”

Exactly. For one thing, it is hard for an administration to get a confirmation if it does not make nominations. Take federal judges for instance, for most of the past two years there have been around a hundred vacancies on the Circuit and District courts; Mr. Obama has rarely had nominees for more than half of them. This is simply federal administrative incompetence, and it takes a heavy toll in the hallways and dockets of justice. Gerstein and Phillip pointed to the appalling state of play in Arizona to illustrate the issue. I owe them a debt of gratitude for pointing the Arizona situation out, because I have long been screaming about the empty seats and docket problems both here in Arizona and in the 9th Circuit.

For most of the last half of 2010, Chief Judge John Roll was in the process of certifying the District of Arizona as a formal “judicial emergency” zone from docket overcrowding, a situation that exacerbates relentlessly in most all case types, but especially from immigration and immigration related types of cases. We needed more judges allotted to start with, but have simply been killed from having long had two empty District judicial seats that were not only empty, but for which Obama could apparently not even be bothered to name nominees for.  [cont'd.]

Then John Roll was killed in the Giffords shooting, leaving three empty seats in a District that would need another two seats to have some normalcy even if all three of those traditional seats were indeed filled. In the intervening six months since Judge Roll’s death, Obama has not designated one solitary nominee for the previous two openings, nor John’s now empty large chair. It is simply unacceptable and a dereliction of duty.

It is not just judges either, Obama was extremely slow to move out Bush/Cheney US Attorneys (and only recently did so with the extremely troubling Leura Canary), has left a dearth of economic positions unfilled including the absolutely critical position of Director of the Consumer Finance Protection Board (which cannot even become fully operational without a Director) and, of course, has struggled to fill key Justice Department positions, including at OLC.

But, as Chase Untermeyer pointed out, there also is the issue of support for the nominees by the White House. For all the bad mouthing of Greg Craig, Bob Bauer has not been able to get that much more accomplished on the nomination priorities, and the word is that he honestly tried. You have to wonder what type of high wall and tin ear the Obama inner circle has up to ignore the critical need to fill vacant positions causing literal emergencies in the field.

The other point that leaps out from the Politico piece is who the Obama brain trust put in the lead for Presidential Personnel, a position critical to making and shepherding executive nominees:

Less than five months into his administration, Obama nominated Presidential Personnel Director Don Gips — a former high-tech executive — as ambassador to South Africa. Months later, White House Counsel Greg Craig quit.

“They did some things that hurt them: changing leadership of the president’s office of personnel, which pushed them back,” said Clay Johnson, who was former President George W. Bush’s personnel director and co-chairs the Aspen Institute’s committee on presidential appointments.

Gips was replaced in 2009 by his 30-year-old chief of staff, Nancy Hogan, a little-known former aide to Daschle.

Quite frankly, Phillip and Gerstein understate how shocking this fact is. This is a position that is exceedingly important to all nominations in general, although WH Counsel’s Office generally leads on justice related nominations. Putting a 30 year old in charge of this job, no matter how talented they are, is simply amazing. It is a process and job that calls for material gravitas and experience working the process on the Hill; it defies credulity that was the path of the Obama Administration.

At any rate, the Politico article is an excellent barometer and report of where we are and why on the nomination gap in the Obama Administration, and it is a troubling picture in many regards. Obama is certainly due credit for getting two Supreme Court justices confirmed in a forthright manner, but the record apart from that is pretty damning.

The other news of note today fits right in with the discussion nicely. Bob Bauer is leaving his position as White House Counsel. From the official White House announcement:

Today, June 2nd , the White House announced that White House Counsel Bob Bauer will return to private practice and that current Principal Deputy Counsel to the President Kathryn Ruemmler will serve as White House Counsel.

“Bob is a good friend and has served as a trusted advisor for many years,” said President Obama. “Bob was a critical member of the White House team. He has exceptional judgment, wisdom, and intellect, and he will continue to be one of my close advisors.”

At the end of June, Bauer will return to Perkins Coie where he will resume his practice focused on serving as general counsel to the President’s reelection campaign, general counsel to the Democratic National Committee, and personal lawyer to President Obama.

I do not know much about Ruemmler, but she does have a solid background it appears. The decision by Bauer to leave may raise a few eyebrows, but it actually makes a lot of sense. Bauer is an extremely accomplished Democratic campaign attorney, and the party is starting to gear up in full for the 2012 election. Bauer can really make a valuable impact in that capacity, and after banging his head against the nomination wall in the White House, the return to his standard haunts is probably a welcome thing.

BAAA! (photo: frankcheez)

Things were going along pretty well for the Bush Administration Alumni Association. Sure, they were out of their old offices, but things were good. Obama adopted their wars as his own, the economy has sputtered along long enough to have become (in the public’s mind) at least as much Obama’s fault as theirs (thus the cries of “deficits! deficits! deficits!” from those who launched us into two wars), and most of the BAAA have landed in cushy lucrative new digs.

Then Obama had to ruin it by getting bin Laden. Suddenly, all the old discussions are back — at least as far as torture goes — and this has at least some of them very worried, like Michael Mukasey.

Marcy’s take on Mukasey’s op-ed is that he’s worried about sullying his reputation. Says Marcy, “ultimately the torture apologists staked their reputation on a certain approach to terrorism. That’s their legacy. It’s all they’ve got.”

That approach was simple: the ends justify the means. For BAAA, that means crowing about the success of torture in leading to bin Laden, even if it’s not true.

What’s remarkable about this approach, when lauded by a former federal judge and former US attorney general, is that it flies in the face of decades of settled SCOTUS precedent and the plain text of the constitution. You want to search someone? You’ve got to get a warrant. You want to lock someone up? You’ve got to file charges and hold a trial before a jury. Youngstown made it clear that presidential authority is NOT without limits, though apparently no one in the Bush administration will admit to having read it.

Marcy is right, but she doesn’t go far enough. Mukasey isn’t simply worried about his legacy. He’s afraid of something much more substantive. Says Mukasey:

The Bush administration put these techniques in place only after rigorous analysis by the Justice Department, which concluded that they were lawful. Regrettably, that same administration gave them a name—”enhanced interrogation techniques”—so absurdly antiseptic as to imply that it must conceal something unlawful.

Rigorous analysis? I think not. There’s a strong case to be made that Bradbury, Bybee, and Yoo’s rigor was not in legal analysis but in pleasing their masters. Two years ago tomorrow, I summed up the evidence at the link above like this:

Selective citations in legal memos. Selective and misleading notification of Congress. Obstructing legitimate oversight. Attempting to sweep the record of the OLC out the door. This is the pattern of careful attention to detail exhibited by of the Office of Legal Counsel under Attorneys General Ashcroft and Mukasey.

These high ranking DOJ lawyers put “getting ahead” and “pleasing the boss” ahead of their duty to the Constitution of the United States and their own obligations as lawyers to follow the law where ever it leads. They sold their legal souls by providing the cover of law to practices so abhorrent that they are called not crimes against the state but crimes against humanity.

Tomorrow, two years later, BAAA will be back on the Sunday talk shows, bleating about torture. “But it worked!” they’ll cry.

Sorry, folks, but “the ends justify the means” is an excuse, not a legal justification, and as Marcy noted in her post, it’s also a lie. Getting caught on that one is the last straw for BAAA. Without, they’ve got nothing to shield themselves from prosecution — if not here, then elsewhere.

Fear. Can you smell it?

NYC Police Chief Ray Kelly (photo: Red Carlisle)

A couple of weeks ago quite a stir was created when the rumor was let leak that President Obama was considering three different high level Bush/Cheney Administration officials to replace FBI Director Robert Mueller, whose ten year term will expire will expire on September 4, 2011. The two names most prominently featured were former Bush Deputy AG James Comey and former Bush National Security AAG Ken Wainstein but also mentioned was former Bush Homeland Security Advisor Fran Townsend. The story creating the hubbub, almost as an afterthought, also mentioned that Sen. Chuck Schumer had been lobbying for current NYPD Commissioner Ray Kelly for the job.

Today, however, comes a news report from local New York investigative reporter Murray Weiss that the FBI Director chair is Ray Kelly’s “for the taking”:

And when sources with solid connections in the White House tell you Kelly has been told by Attorney General Eric Holder that the FBI director’s job is his for the taking, it is impossible to ignore them. All the signals, including the aside from Kelly, are in sync.

Here is the news, according to my sources.

Kelly, who served in two federal posts during the Clinton administration, is this close to heading out of Manhattan and back to Washington to cap his long career of public service by running the FBI.

There are several things interesting about the report. One is Kelly’s age – he is 69 years old. The article addresses that issue:

The FBI Director’s term is 10 years. My sources say the White House has told the 69-year-old Kelly to view the position as a five year commitment, which would coincide nicely with the end of a second Obama term.

If so, and Kelly is indeed nominated, this is a contemptible plan. The intent behind having a ten year service period for the FBI top spot is to give it some space from hard partisan politics. In this case, seeing as how rare it is that a party who has had the presidency for two terms gets it for a third, setting up the FBI job to be open in the face of what would historically be and expected GOP president in 2016 seems short-sighted and extremely ill considered. I guess that presupposes Obama is reelected, but you have to assume the White House believes that will be the case and is acting under said assumption.

What is more interesting, however, is what a Ray Kelly nomination would say about the Obama 9/11 Terror Trials fiasco that culminated three days ago in the Administration announcing, through the water carrying mule known as Attorney General Eric Holder, that the 9/11 suspects/detainees, including Khalid Sheikh Mohammed, would receive second-tier justice in the untested and almost certainly unconstitutional Guantanamo military commission system. [cont'd.]This was a decision noted Constitutional authority Dahlia Lithwick termed “Cowardly, Stupid, and Tragically Wrong” and further noted:

Say what you want about how Congress forced Obama’s hand today by making it all but impossible to try the 9/11 conspirators in regular Article III courts.* The only lesson learned is that Obama’s hand can be forced. That there is no principle he can’t be bullied into abandoning. In the future, when seeking to pass laws that treat different people differently for purely political reasons, Congress need only fear-monger and fabricate to get the president to cave. Nobody claims that this was a legal decision. It was a political triumph or loss, depending on your viewpoint. The rule of law is an afterthought, either way.

What Dahlia noted is quite correct (and her article is spot on; if you have not seen it, read the whole thing), but the potential specter of a Ray Kelly nomination to FBI director makes you wonder whether Obama’s hand was forced so much as he used the caterwauling of Congress as an excuse for something he just felt politically expedient. And that is where we get back to Ray Kelly, because it was Kelly, just as much as Congress, that blew up the ability of New York to hold civilian trials for KSM and the other 9/11 suspects, not to mention future terrorism cases. As Marcy Wheeler noted, the indictment had been returned, and was really quite solid in how it was constructed.

Yes, the right wing howlers were grumbling in Congress, but it was Ray Kelly’s fearmongering over security which fueled the Community One Association of lower Manhattan into a negative frenzy over the specter of the trials actually being held where the crimes were committed. The breaking of the will of New York to hold the trials that broke the back of effort as a whole.

Notably, however, these were not principled fears Kelly whipped up, it was a just another political theater play over a struggle for money and power. As Jane Mayer noted at the time:

For months, companies with downtown real-estate interests had been lobbying to stop the trial. Raymond Kelly, the commissioner of the New York Police Department, had fortified their arguments by providing upwardly spiralling estimates of the costs, which the federal government had promised to cover. In a matter of weeks, in what an Obama Administration official called a “classic City Hall jam job,” the police department’s projection of the trial costs went from a few hundred million dollars to a billion dollars.

Kelly friend and compatriot Michael Bloomberg had been in favor of the trials And Kelly and his friend Bloomberg were resolutely in favor of the trials, until they learned there would be not be a financial funding windfall sufficient for their desire from the Feds. Kelly then whipped the public frenzy, Bloomberg and Chuck Schumer fell in line, and it was game over as to public will in New York.

Ray Kelly, attempting to build his and his department’s budget and power, ran a shakedown play on the Obama Administration. Or so it seemed at the time. But what if Ray Kelly had his eye on succeeding Mueller at FBI longer than Weiss relates in today’s article (which discusses Kelly auguring for the job as early as last summer). What if the real shakedown Ray Kelly was running on the White House, Eric Holder and the Administration early in the terror trials issue was for the FBI job, it started much earlier than last summer, and the blowing up of the ability to conduct civilian trials in New York was simply his end of the bargain?

This is conjecture at this point, but it certainly fits the facts, and would also explain why Obama would be considering a man far older than logic and recent precedent would consider appropriate for the job. What a panel of potential nominees the White House has ginned up – three Bush/Cheney hands and Ray Kelly, the shakedown specialist. Either way, if it does ever turn out Ray Kelly is Obama’s nominee for FBI Director, it would be another profound comment on the Administration’s “cowardly, stupid, and tragically wrong” handling of the civilian trials in Article III courts issue.

(photo: Paul Keller)

There was something I appreciated about the Holder press conference capitulating on trying the 9/11 defendants in civilian trials.

He didn’t try to spin it as a good idea.

Not only did he reiterate his judgment that trying Khalid Sheikh Mohammed in a civilian trial was the right decision, he also noted that it’s not clear whether military commissions can impose the death penalty on someone who pleads guilty.

And then he ended the presser quickly, as if he had to rush upstairs to his office to vacate it so some General could move in.

That said, it’s clear that Holder lost an important battle, one he believed in. Here’s what Jane Mayer reports on the work SDNY’s prosecutors have already done on the trial.

Holder and some of the smartest prosecutors in the country had prepared what they believed was the strongest case possible against K.S.M. Lawyers involved in the effort told me they had spent years on it, and had files filled with killer evidence, just waiting for trial. Careers had been devoted to compiling an impeccable case. By using the civilian justice system, Holder had wanted to send several important messages, among them that terrorists are criminals, not some new breed of super warrior; and that the U.S. legal system is the strongest, fairest, and most credible system in the world. A guilty verdict arrived at in front of the world, in a public trial, with ordinary citizens sitting in judgment of K.S.M., would be internationally accepted as legitimate, in a way that no military tribunal ever will be. Or so the thinking went.

Of course, if Holder cared that much about these principles–and I believe he does–it would sure be nice to see him resign rather than preside over the continued decline of our commitment to the rule of law.

(Holder’s full statement–with my emphasis on select points–is after the jump.)

Update: Here’s the indictment from 2009 unsealed today. It lists all the known victims of 9/11.

[cont'd.]

As I said then, the decision between federal courts and military commissions was not an easy one to make. I began my review of this case with an open mind and with just one goal: to look at the facts, look at the law, and choose the venue where we could achieve swift and sure justice most effectively for the victims of those horrendous attacks and their family members. After consulting with prosecutors from both the Department of Justice and Department of Defense and after thoroughly studying the case, it became clear to me that the best venue for prosecution was in federal court. I stand by that decision today.

As the indictment unsealed today reveals, we were prepared to bring a powerful case against Khalid Sheikh Mohammed and his four co-conspirators – one of the most well-researched and documented cases I have ever seen in my decades of experience as a prosecutor. We had carefully evaluated the evidence and concluded that we could prove the defendants’ guilt while adhering to the bedrock traditions and values of our laws. We had consulted extensively with the intelligence community and developed detailed plans for handling classified evidence. Had this case proceeded in Manhattan or in an alternative venue in the United States, as I seriously explored in the past year, I am confident that our justice system would have performed with the same distinction that has been its hallmark for over two hundred years.

Unfortunately, since I made that decision, Members of Congress have intervened and imposed restrictions blocking the administration from bringing any Guantanamo detainees to trial in the United States, regardless of the venue. As the President has said, those unwise and unwarranted restrictions undermine our counterterrorism efforts and could harm our national security. Decisions about who, where and how to prosecute have always been – and must remain – the responsibility of the executive branch. Members of Congress simply do not have access to the evidence and other information necessary to make prosecution judgments. Yet they have taken one of the nation’s most tested counterterrorism tools off the table and tied our hands in a way that could have serious ramifications. We will continue to seek to repeal those restrictions.

But we must face a simple truth: those restrictions are unlikely to be repealed in the immediate future. And we simply cannot allow a trial to be delayed any longer for the victims of the 9/11 attacks or for their family members who have waited for nearly a decade for justice. I have talked to these family members on many occasions over the last two years. Like many Americans, they differ on where the 9/11 conspirators should be prosecuted, but there is one thing on which they all agree: We must bring the conspirators to justice.

So today I am referring the cases of Khalid Sheikh Mohammed, Walid Muhammad Bin Attash, Ramzi Bin Al Shibh, Ali Abdul-Aziz Ali, and Mustafa Ahmed Al Hawsawi to the Department of Defense to proceed in military commissions. Furthermore, I have directed prosecutors to move to dismiss the indictment that was handed down under seal in the Southern District of New York in December, 2009, and a judge has granted that motion.

Prosecutors from both the Departments of Defense and Justice have been working together since the beginning of this matter, and I have full faith and confidence in the military commission system to appropriately handle this case as it proceeds. The Department of Justice will continue to offer all the support necessary as this critically important matter moves forward. The administration worked with Congress to substantially reform military commissions in 2009, and I believe they can deliver fair trials and just verdicts. For the victims of these heinous attacks and their families, that justice is long overdue, and it must not be delayed any longer.

Since I made the decision to prosecute the alleged 9/11 conspirators, the effectiveness of our federal courts and the thousands of prosecutors, judges, law enforcement officers, and defense attorneys who work in them have been subjected to a number of unfair, and often unfounded, criticisms. Too many people – many of whom certainly know better – have expressed doubts about our time-honored and time-tested system of justice. That’s not only misguided, it’s wrong. The fact is, federal courts have proven to be an unparalleled instrument for bringing terrorists to justice. Our courts have convicted hundreds of terrorists since September 11, and our prisons safely and securely hold hundreds today, many of them serving long sentences. There is no other tool that has demonstrated the ability to both incapacitate terrorists and collect intelligence from them over such a diverse range of circumstances as our traditional justice system. Our national security demands that we continue to prosecute terrorists in federal court, and we will do so. Our heritage, our values, and our legacy to future generations also demand that we have full faith and confidence in a court system that has distinguished this nation throughout its history.

Finally, I want to thank the prosecutors from the Southern District of New York and the Eastern District of Virginia who have spent countless hours working to bring this case to trial. They are some of the most dedicated and patriotic Americans I have ever encountered, and our nation is safer because of the work they do every day. They have honored their country through their efforts on this case, and I thank them for it. I am proud of each and every one of them.

Sadly, this case has been marked by needless controversy since the beginning. But despite all the argument and debate it has engendered, the prosecution of Khalid Sheikh Mohammed and his co-conspirators should never have been about settling ideological arguments or scoring political points. At the end of our indictment appear the names of 2,976 people who were killed in the attacks on that deadly September day nearly ten years ago. Innocent Americans and citizens of foreign countries alike who were murdered by ruthless terrorists intent on crippling our nation and attacking the values that we hold dear. This case has always been about delivering justice for those victims, and for their surviving loved ones. Nothing else. It is my sincere hope that, through the actions we take today, we will finally be able to deliver the justice they have so long deserved.

(official White House photo: Pete Souza - detail)

Reports are trickling out that Eric Holder will announce an epic cave this afternoon on his earlier decision to try the 9/11 defendants in civilian courts.

Attorney General Eric Holder today will announce that self-proclaimed Sept. 11 mastermind Khalid Sheikh Mohammad will be tried in a military commission, CBS News has learned. A source says the commission will be held at the Guantanamo Bay prison.

As Adam Serwer and MadDog have pointed out, how pathetic that this announcement comes on the same day that Obama launches his reelection campaign with a note that says, in part,

So even though I’m focused on the job you elected me to do, and the race may not reach full speed for a year or more, the work of laying the foundation for our campaign must start today.

We’ve always known that lasting change wouldn’t come quickly or easily. It never does. But as my administration and folks across the country fight to protect the progress we’ve made — and make more — we also need to begin mobilizing for 2012, long before the time comes for me to begin campaigning in earnest.

[snip]

We’ll start by doing something unprecedented: coordinating millions of one-on-one conversations between supporters across every single state, reconnecting old friends, inspiring new ones to join the cause, and readying ourselves for next year’s fight.

Because nothing says “laying the foundation” of a Presidential campaign and “inspiring new” supporters like caving to fearmongering.

Scott Bloch is headed for the stripy hole.

Since mid-February an important, but little noticed, criminal case has been playing out in DC District court in which former Bush/Cheney administration Special Counsel Scott Bloch is charged with criminal contempt of Congress pursuant to 2 USC 192. As I summarized in an earlier post:

As you will recall, former former Bush/Cheney Administration Special Counsel Scott Bloch destroyed evidence by wiping government computers clean, lied to Congress about it and conspired with the DOJ to minimize the conduct and slough it off with a sweetheart plea deal. Then, outrageously, when the court indicated it was inclined to impose the mandatory minimum month in jail, which was mandated by the statute Bloch pled guilty to, Bloch and the DOJ conspired to get the plea, which had already been accepted and entered by the court, withdrawn.

When Bloch and DOJ both worked together to get the plea withdrawn, and frustrate justice, the egregious nature of the attempt was documented here in a fully argued and supported post published on Tuesday March 1, 2011. Subsequent to that post, the court also found questions with the attempt to withdraw the plea and ordered Bloch to file a reply supporting the attempt.

At the previous date set for sentencing, on March 14, the court gave Bloch one last shot to brief his way out of the hole he dug for himself and ordered a tight briefing schedule therefore. Bloch filed his Motion for Reconsideration on March 14, The government filed their response, again colluding with Bloch, on March 17, and Bloch filed his reply on March 23.

Late yesterday afternoon, Judge Deborah Robinson ruled on Bloch’s latest attempt to get out of the mandatory incarceration sentence he pled guilty to, and entered her order denying his motion. The court fairly well blasted Bloch’s whining attempt to withdraw and, by extension, the continued craven collusion by the government in said attempt. [cont'd.]

First the court gutted the claimed ability of Bloch to have a motion for reconsideration entertained on the merits at all:

In sum, while judges of this court have, on occasion, entertained motions for reconsideration of interlocutory orders in criminal cases, no Federal Rule of Criminal Procedure, or Local Criminal Rule of the United States District Court for the District of Columbia, provides for such motions. The undersigned finds that although the pending motion is styled a “Motion to Reconsider[,]” it is effectively an effort “[to] rehash[] previously rejected arguments” regarding both the finding that the offense to which Defendant pled guilty carries a mandatory minimum sentence, and the order denying Defendant’s motion to withdraw his guilty plea.

Undoubtedly Judge Robinson, recognizing the significance of Bloch’s case to both the Executive Branch and Congress, not to mention the defendant himself, wanted to give Bloch every opportunity to make his record. But when decision day came, she followed the law and properly noted the procedural disfavor of such motions as Bloch was proffering. It was smart of Robinson, however, to let Bloch play out the string before so ruling.

And then the court got to the factual merits of Bloch’s argument. To say that the court found no merit in this regard is somewhat of an understatement:

The court finds that Defendant has failed to show that the court “made an error in failing to consider controlling decisions or data[.]” Defendant blithely proclaims that the court “fail[ed] to discuss in its Memorandum Opinion – or even mention – the only two prosecutions in the past twenty years which proceeded under 2 U.S.C. § 192: United States v. Miguel O. Tejada, Cr. 09- mj-077-01, and United States v. Elliot Abrams, Cr.-91-575 (AER)[]” (see Defendant’s Motion for Reconsideration at 4). However, Defendant’s proclamation is belied by the record: the court has, in fact, considered both of those prosecutions
….
The court finds that Defendant’s claim that “the Plea Agreement contemplated eligibility for probation” (Defendant’s Motion for Reconsideration at 4) is equally specious. No such provision is included in the plea agreement; moreover, Defendant “acknowledge[d] that [his] entry of a guilty plea to the charged offense authorizes the sentencing court to impose any sentence, up to and including the statutory maximum sentence, which may be greater than the applicable Guidelines range.”
…..
Finally, the proffer of the advice of counsel, offered, for the first time, through the affidavit of one of the lawyers who represented Defendant (see Affidavit of Ryan R. Sparacino, Esq. (“Sparacino Affidavit”) (Document No. 49-1)), is of no moment.
…..
To the extent which the affidavit of counsel has probative value at all in this context, it is that it serves to highlight the court’s finding that Defendant was aware that the offense to which he pled guilty was one for which a mandatory minimum sentence was provided.
….
Counsel’s advice that the court was not likely to impose the mandatory minimum sentence simply because two other judges apparently had not done so is not
germane to any issue now before the court.

Ouch. That’s going to leave a mark. And that mark should be on the DOJ and its assigned attorney in this case, Glenn Leon, as well. It was nothing short of a craven attempt by the Obama DOJ to collude with a defendant to escape punishment because the administration does not want to have a precedent that – gasp – Executive Branch officials that lie to and are otherwise in contempt of Congress could be sent to prison. Good bet Mr. Tim Geithner is paying close attention to this ruling.

At any rate, Scott Bloch will be sentenced by Judge Robinson on his guilty plea conviction today at 4:00 pm EST. Bloch will be sentenced to at least one month of prison. He should be sentenced to the full six months that are the upper end of the sentencing guidelines range for his plea, but it is unlikely, under the circumstances, the court will impose more than the mandatory one month.

pic via Xavier Zarra at flickr.com

Sens. John McCain (R-AZ) and Lindsey Graham (R-SC) are teaming up with Republicans on the House Armed Services Committee to write legislation that would take decisions about trying detainees out of the attorney general’s hands and hand that power to the secretary of defense.

Ooh, how lovely, and by that I mean, how awesomely anti-American. Maybe eventually we can do this with Union leaders and Democrats too? After all its not like they’re important, if they were they’d be on the Sunday chat shows more often…like McCain and Graham.

Remember, its not about unraveling a republic, its just about efficiency (and making accused people stand around naked, or worse), the fact it undermines our traditional notions of justice is just a bonus for them.

To contribute to the type of organization that both Augusto Pinochet AND John McCain opposed when they were fighting against Jose de San Martin together, look here.

(photo: Pete Prodoehl on Flickr)

Back in 1992, Congress created a program to require agencies within the Department of Health and Human Services to contract with drug manufacturers to secure price discounts for drugs provided to certain government supported hospitals and clinics. Under the law, the drug manufacturers were required by these contracts to sell drugs to those hospitals and clinics at no higher than “ceiling prices,” which were based on average prices offered for the same drugs.

However, thanks to a decision by the Obama Administration’s Department of Justice in siding with drug manufacturers, those price discounts are now in jeopardy.

The ability of government-supported hospitals, clinics and their patients to get the benefit of these price “discounts” depended on the government writing and enforcing the contracts. But over the years, The agencies became lax in their efforts, and investigations by various inspectors general found persistent over-pricing in setting the ceilings and/or enforcing them through sales to the health care providers.

This is a classic case where the beneficiaries of a regulatory program ought to have the ability to bring enforcement actions against the parties to make sure the benefits intended by Congress actually occur. Thus, a group of supported hospitals/clinics (e.g., Santa Clara County et al) sued the drug makers to compel them to stop overcharging and provide the discounts Congress intended.

Initially brought in State trial court, the case was removed to federal court, and the initial District Court decision dismissed, partly because the federal statute did not explicitly create a private right of action — that is, the Act didn’t say third parties could sue even though they were intended beneficiaries.

But when the case got to the Ninth Circuit Court of Appeals in 2008, the Court reversed, holding that while there was no private enforcement of the statute, per se, Santa Clara County et al could proceed under standard contract law. In other words, since these plaintiffs were the Congressionally intended beneficiaries of the discount pricing contracts between the government agency and the drug manufacturers, contract law gave these beneficiaries a right to sue to obtain the benefits which they were promised under the contracts. Good decision.

The Ninth Circuit’s decision is now on appeal to the US Supreme Court, so the question has been, what would the Obama Justice Department do? Would it side with the hospitals and clinics and allow them, and potentially other beneficiaries of Congressionally mandated drug discount contracts, to enforce these contracts through the courts? Or would it side with the drug manufacturers and argue the hospitals didn’t have the right to sue?

The New York Times today reports DoJ’s decision to side with the drug makers:

The Obama administration, following a lengthy internal debate, has unexpectedly come down on the side of pharmaceutical companies that are accused of overcharging public hospitals and clinics that care for large numbers of poor people.

The administration has told the Supreme Court that the hospitals and clinics cannot sue drug companies to enforce their right to deep discounts on drugs or to obtain reimbursement from companies that overcharge.

It is a classic conflict: a political imperative for the administration — to ensure that inexpensive drugs are available to the poor people who need them — rubbing up against the Justice Department’s fear of an onslaught of lawsuits by clinics and hospitals if the Supreme Court allows them to sue.

Classic conflict? I don’t think so. There are thousands of affected hospitals and clinics that are exactly the beneficiaries Congress intended for the discount contracts Congress mandated. They are the entities most directly affected by, and most fully aware of, whether the discounts are actually provided. Rather than conflict with the DHHS efforts, private actions will supplement and perfect them. So it makes perfect sense to allow these entities to help DHHS enforce the contracts under standard contract law.

The Inspector Generals’ reports already demonstrate the DHHS hasn’t done an effective enforcement job. And there’s no reason to believe DHHS will significantly improve things, especially when Congress is looking to make unwise budget cuts in every corner. DHHS should thus welcome the help of private enforcement efforts by the very people the Act was intended to help and who have the greatest stake in enforcement.

But as we’ve seen in other cases, this Administration can’t seem to leave well enough alone when it has a favorable court decision. It insists on maintaining control, even though it has no intention of capability of exercising that control in an effective manner. What were they thinking?

John Chandley

More:
Text of the Ninth Circuit decision in County of Santa Clara vs. Astra USA Inc. . . .