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Doug Bandow

Will America ever again be at peace? Pressure is building for the U.S. again to intervene in Libya.

Less than three years after Libya’s civil war the country has ceased to exist. This debacle offers a clear lesson for American policymakers. But denizens of Washington seem never to learn.

The administration presented the issue as one of humanitarian intervention, to save the people of Benghazi from slaughter at the hands of Libyan dictator Moammar Khadafy.

Although he was a nasty character, he had slaughtered no one when his forces reclaimed other territory. In Benghazi he only threatened those who had taken up arms against him.

In fact, the allies never believed their rhetoric. They immediately shifted their objective from civilian protection to slow motion regime change. Thousands died in the low-tech civil war.

Alas, Libya was an artificial nation. When Khadafy died political structure vanished. The country split apart. Today multiple warring factions have divided into two broad coalitions.

“Operation Dignity” is a largely secular grouping including Gen. Khalifa Haftar’s “Libyan National Army” and the internationally recognized government. Last May Haftar launched a campaign against the Islamist militias with covert support from Egypt and the United Arab Emirates.

“Libya Dawn” is a mix of Islamists, moderate to radical, and conservative merchants which now controls Tripoli. They are backed by Qatar, Sudan, and Turkey, and deny that the Islamic State poses much of a threat.

Now Libya has become an ISIL outpost. Three jihadist groups have formally claimed allegiance to the Islamic State. These forces have attacked oil installations, killed journalists, and conducted bombings. Some of these militants were responsible for the murder of U.S. Ambassador J. Christopher Stevens.

ISIL’s slaughter of Egyptian Coptic workers triggered retaliatory airstrikes by Cairo, and then new Islamic State attacks. The national wreckage known as Libya is being pulled into the regional sectarian maelstrom.

Obviously, Khadafy’s continued rule would have been no picnic. Nevertheless, he offered an ugly stability which looks better than chaos, civil war, and terrorism. British envoy Jonathan Powell warned of the emergence of “Somalia by the Med.”

In Libya, as with most other failed interventions, war advocates say the problem was that America didn’t stick around. But as I point out on Forbes:  “the allies only played a supporting role; the Libyans liberated themselves through their own boots on the ground. The militias fighting now would have resisted any foreign occupation.”

Alas, this disastrous history hasn’t precluded new proposals for Western involvement. Abdullah al-Thinni, Libya’s official prime minister, wants the West back. Italian Prime Minister Matteo Renzi advocated that the UN run a “stronger mission.”

Unfortunately, there’s no reason to believe that the second (or third) time would be the charm. The Atlantic Council’s Karim Mezran observed:  “There are no good guys or bad guys there—both sides have been acting in bad faith.”

The West naturally favors the internationally recognized government. But intervening against the Islamist-oriented government would make enemies of many Libyans not linked to the Islamic State.

The best outcome would be a national unity government as backed by the U.S. and European governments. But months of mediation have led nowhere.

More practical would be to acquiesce in the partition of what never was an organic nation. In the meantime the West should consider selectively lifting the arms embargo to aid groups likely to combat jihadist forces.

Moreover, Libya’s neighbors should act rather than wait helplessly for Washington to do something. The region’s stability is these nations’ business.

Libya’s collapse has been almost total. But so far no one has been held to account.

As problems metastasize with the rise of ISIL in Libya, however, the American people may be more inclined to critically assess the judgment and competence of Washington policymakers. Voters should hold officials accountable for the disaster they created in Libya.

Trevor Burrus

The Armed Career Criminal Act (ACCA) increases the minimum criminal penalty for defendants convicted of illegal firearm possession who also have three prior violent crime convictions. While the Act lists many crimes as qualifying as “violent”—such as burglary, arson, and extortion—it also contains a catch-all provision, a “residual clause,” that includes crimes that “otherwise involve conduct that presents a serious potential risk of physical injury to another.”

While that language may seem clear, its precise meaning has bedeviled courts for decades. In fact, Johnson v. United States represents the fifth time since 2007 that the Supreme Court has been asked to clarify what the residual clause means. For example, does drunk driving count? How about fleeing from officers in a high-speed chase? Even though the high court only hears about 75 cases per year—and it rarely revisits a law within such a short time-span—the ACCA’s residual clause keeps coming back. As Justice Antonin Scalia quipped in the last such case, “We try to include an ACCA residual-clause case in about every second or third volume of the United States Reports.” Justice Scalia’s comment came in a dissent in which he argued that the residual clause is unconstitutionally vague, and it seems that the rest of his colleagues paid attention. This is the second time this term that this case will be argued before the Court.

Last November, the issue was whether merely (illegally) possessing a short-barreled shotgun is a crime that fits into the residual clause. In January, however, the Court ordered that the case be re-argued on the larger question of whether the residual clause is itself unconstitutionally vague. Apparently, in discussing the law for the fifth time, the justices got tired of trying to answer questions that Congress should have addressed by writing a clearer law.

Cato now joins the National Association of Criminal Defense Lawyers, the National Association of Federal Defenders, and Families Against Mandatory Minimums in arguing that the clause should indeed be void for vagueness. Despite four previous attempts to clarify the law, lower courts are as confused as ever about how the ACCA interacts with, among other offenses, attempted crimes, battery of police officers, and statutory rape cases. This vagueness is not just a problem for defendants like Mr. Johnson here; it raises concerns about the separation of powers. The Supreme Court has said that overly vague statutes impermissibly draft judges into a legislative role. Quite so: vague language forces the judiciary, not the legislature, to define criminal offenses and establish their penalties.

Legislation—especially when it implicates individual liberty—must be clear and understandable enough that the general public can ascertain the conduct it prohibits. If trained and experienced judges can’t even figure out what a law means, clearly it’s too vague for an average person to understand. If at first, and second, and third, and fourth you don’t succeed in clarifying vague language, perhaps it’s time to throw out the legal text and try again. As another Samuel Johnson might say, injuries are revenged, crimes are avenged, and vague laws are rewritten.

Patrick J. Michaels and Paul C. "Chip" Knappenberger

U.S. Secretary of the Interior Sally Jewell was in Alaska last week at the invite of the Alaska Federation of Natives to discuss climate change and other issues. During her visit, she made a side trip to the 400 or so person town of Kivalina, located on a low-lying barrier island along Alaska’s northwest coast. The settlement sprung up about a century ago when the Interior Department decided to erect a school there under a program to promote the “education of natives in Alaska.” The same program established schools in other coastal location such as Golovin, Shishmaref, and Barrow.

Now these locations are in the news (see this week’s Washington Post story for example) because they are being threatened by coastal erosion coming at the hands of global warming—and are discussing relocating and who should be responsible for the footing the bill (incidentally, the courts have ruled out the energy industry).

With or without human-caused climate change, bluffs and barrier islands along the coast of northwestern Alaska are inherently unstable and not particularly good places to establish permanent towns. This is probably one of the reasons the natives were largely nomadic.

“Were,” we say, because ironically, as pointed out by the Post’s Chris Mooney, research indicates that the abandonment of the nomadic ways was encouraged/hastened by the establishment of government schools!

Nor are unstable Alaskan shores anything new.

Several major environmental studies were carried out in the mid-20th century and all found extremely high rates of erosion resulting from frequent and intense storm systems. One, from nearly 50 years ago, even went as far as to suggest that a warming climate from enhanced carbon dioxide emissions would make erosion worse and gave this advice:

[C]are should be exercised in the selection of building sites and construction methods. The best sites would be at least 30 feet above sea level and either inland or along a coast which is not eroding. If a site which is low and near the ocean must be used, then a protected position leeward of a point or island would be best.  

Apparently, in places like Kivalina, this advice went unheeded.

We reviewed the situation along the Alaskan shoreline in a piece we wrote back in 2007. What we concluded then remains the case today:

Clearly, erosion has been gnawing away at the Alaska coast for many, many decades and this fact has been known for equally as long. Wind and waves acting on soil held together by ice acts through a positive feedback to expose more frozen soil to the above-freezing temperatures of summer and the warm rays of sunshine, softening it for the next round of waves and wind. And so the process continues. A decline in near-shore ice cover helps to exacerbate the process. Ignoring these well-known environmental conditions has led to the unfortunate situation today where Inuit villages are facing an imminent pressure to relocate. This situation has less to do with anthropogenic climate change than it does to poor planning in the light of well-established environmental threats—threats that have existed for at least the better part of the 20th century.

Despite periodically cycling into the news, nothing really is new.

Jim Harper

Yesterday, the New York Department of Financial Services (NYDFS) issued the second draft of its “BitLicense” proposal, a special, technology-specific regulation for digital currencies like Bitcoin. For a second time, the NYDFS claims to have a strong rationale for such regulation, but it has not revealed its rationale to the public, even though it is required to do so by New York’s Freedom of Information Law.

If you’re just joining the “BitLicense” saga, the NYDFS welcomed Bitcoin in August 2013 by subpoenaing every important person in the Bitcoin world. A few months later, New York’s Superintendent of Financial Services announced his plan for a special “BitLicense,” which would be required of anyone wanting to provide Bitcoin-based services in New York.

About a year later, Superintendent Lawsky released the first draft of the “BitLicense” proposal, to strongly negative reviews from the Bitcoin community. It didn’t help that after a year’s work the NYDFS offered the statutory minimum of 45 days to comment. Relenting to public demand, the NYDFS extended the comment period.

In announcing the regulation, the NYDFS cited “extensive research and analysis” that it said justifies placing unique regulatory burdens on Bitcoin businesses. On behalf of the Bitcoin Foundation, yours truly asked to see that “extensive research and analysis” under New York’s Freedom of Information Law. The agency quickly promised timely access, but in early September last year it reversed itself and said that it may not release its research until December.

December has come and gone, of course. It is now late February 2015, and the department’s “extensive research and analysis” has yet to see the light of day.

The NYDFS has produced a new draft of its regulation, though. The document announcing the new draft says, “The Department has extensively considered the need to regulate virtual currency business activity and the appropriate way to do so, and it has concluded that a new regulation under the Financial Services Law is necessary to protect New York consumers and users of virtual currency-related services.”

It may be true that the department has considered the need for special regulation of this financial technology. It is obviously true that it has concluded in favor of regulating. But New York’s Freedom of Information Law—and sound regulatory practice—require the NYDFS to share the analysis it has produced in support of its regulatory proposal. Having access to this material will allow the Bitcoin community and others to see how well the NYDFS is applying regulatory means to consumer protection ends.

It’s clear from his speeches that Superintendent Lawsky “gets” Bitcoin and sees its potential to revolutionize financial services for the benefit of consumers and the economies of New York, the United States, and the world. What his department has yet to make clear is how special regulation of Bitcoin advances universal goals like financial innovation and consumer protection. We should be able to see why Superintendent Lawsky wants to single out this financial technology for treatment that is different from conventional financial services.

The NYDFS should release the “extensive research and analysis” behind the “BitLicense” immediately—certainly well before the close of comments on the current “BitLicense” draft. And it should prepare to issue a new draft based on comments that are enlightened by public analysis of the department’s rationale for this technology-specific regulation.

David Boaz

Donald Keough, who was president of Coca-Cola, has died at age 88. All the obituaries lead with his role in the New Coke debacle. On April 23, 1985, Coca-Cola replaced its amazingly successful product with a new formula, called New Coke. Some people liked the new flavor, but many did not. On July 11 the company reversed its decision and reintroduced the original formula, called for a time Coca-Cola Classic. Wikipedia reports, “ABC News’ Peter Jennings interrupted General Hospital to share the news with viewers.”

The experience was generally regarded as one of the biggest stumbles by a major corporation in memory. But what struck me at the time, and what I’m reminded of now, is how fast the company realized its error and reversed it – less than 11 weeks.

How well do governments do at realizing their errors and reversing them? The obvious comparison at the time was the Vietnam War. It took the U.S. government about 14 years, from 1961 to 1975, to realize and reverse that mistake.

Today we might think of the Iraq War. The United States invaded Iraq in March 2003, based on mistaken intelligence reports, a hazy sense that somehow Saddam Hussein was involved in al Qaeda’s 9/11 attacks, and deeply flawed assumptions about the ease of the undertaking. The war officially ended in December 2011, though of course we still have 3,000 troops there and are contemplating further involvement in response to the ISIS insurgency. Taking the official end of the war, the U.S. government continued that mistake for about 8 years and 9 months.

What about other government failures? How fast were they reversed? Let’s consider:

Alcohol prohibition – 13 years

Marijuana prohibition – approximately 84 years and counting

War on drugs – 44 years or 101 years and counting

The Pruitt-Igoe housing project – 18 years

Airline price and entry regulation – 47 years

Soviet communism – 74 years

And that’s without even counting the mistaken programs that aren’t yet widely agreed to be failures, from the Federal Reserve to the welfare state

Incentives are different in business and government. Some critics of capitalism suggest that democratic government is more responsive than corporations are. But voting is a flawed way to register dissatisfaction. When businesses make mistakes, they tend to lose customers. And they know that very quickly. Because business owners have their own money at stake, they have a strong incentive to correct mistakes promptly. Government officials run little risk of losing their jobs for failure. Indeed, government officials who fail to solve a problem – poverty, homelessness, dropout rates – may be rewarded with more money and staff. No wonder government failures last so long.

A diamond is forever? Government failure is forever. 

Daniel J. Ikenson

Sen. Elizabeth Warren takes to the Washington Post op-ed pages today to warn about the dangers of the so-called Investor-State Dispute Mechanism, which is likely to be a part of the emerging Trans-Pacific Partnership deal.  In substance, if not style, Sen. Warren’s perspective on ISDS is one that libertarians and other free market advocates should share. At least, my colleague Simon Lester and I do

ISDS grants foreign investors the right to sue host governments in third-party arbitration tribunals for treatment that allegedly fails to meet certain standards, such as new laws, regulations, or policies that might have a discriminatory effect on foreign investors that reduces the value of their assets. Certainly, investors – and in this context we’re talking mostly about multinational corporations (MNCs) – should have recourse to justice when these situations arise. But under ISDS, U.S. investors abroad and foreign investors in the United States can collect damages from the treasuries of their host governments by virtue of the judgments of arbitration panels that are entirely outside of the legal structure of the respective countries. This all raises serious questions about democratic accountability, sovereignty, checks and balances, and the separation of power.

An important pillar of trade agreements is the concept of “national treatment,” which says that imports and foreign companies will be afforded treatment no different from that afforded domestic products and companies. The principle is a commitment to nondiscrimination. But ISDS turns national treatment on its head, giving privileges to foreign companies that are not available to domestic companies. If a U.S. natural gas company believes that the value of its assets has suffered on account of a new subsidy for solar panel producers, judicial recourse is available in the U.S. court system only. But for foreign companies, ISDS provides an additional adjudicatory option.

As a practical matter, investment is a risky proposition. Foreign investment is even more so. But that doesn’t mean special institutions should be created to protect MNCs from the consequences of their business decisions. Multinational companies are savvy and sophisticated enough to evaluate risk and determine whether the expected returns cover that risk. Among the risk factors is the strength of the rule of law in the prospective investment jurisdiction. MNCs may want assurances, but why should they be entitled to them? ISDS amounts to a subsidy to mitigate the risk of outsourcing. While outsourcing shouldn’t be denigrated, punished, or taxed – companies should be free to allocate their resources as they see fit – neither should it be subsidized.

A persistent myth that has proven hard to dispel is that trade benefits primarily large corporations at the expense of small businesses, workers, taxpayers, public health, and the environment. That is where Sen. Warren and I part ways.  She would use the existence of an ISDS provision to impugn trade liberalization, broadly, as a tool of corporatism. Unfortunately, ISDS plays right into that narrative. But the fact is that trade is the ultimate trustbuster, ensuring greater competition that prevents companies from taking advantage of consumers. Small business, consumers, taxpayers, and especially lower-income Americans stand to benefit the most from trade liberalization, as the preponderance of U.S. protectionism affects products and services to which lower-income Americans devote higher proportions of their budgets.

So, while inclusion of ISDS would constitute a deep pockmark on the TPP and on subsequent trade agreements, one should consider the final agreement holistically before deciding whether to support or oppose it. The deal will certainly include a lot of liberalization.  And if particularly egregious ISDS cases emerge, the issue can be revisited with real evidence to marshal in support of change.

Matthew Feeney

One week after it was reported that Ferguson, Missouri police officer Darren Wilson would not be indicted for killing of Michael Brown, President Obama announced that the federal government would spend $75 million on police body cameras. Wilson was not wearing a body camera when he shot Brown at least six times, and some have reasonably suggested that if Wilson had been wearing a body camera during his interaction with Brown that it would have been easier to determine if Brown’s killing was a justified or unjustified use of force.

Police in Missouri were in the news again after recently released dash camera footage revealed that an officer warned colleagues who were arresting a suspect that the camera was live before it was suddenly turned off. Both Brown’s killing in August and the footage of the April 2014 arrest highlight not only the fact that body cameras would provide investigators looking into allegations of police misconduct with valuable evidence, but also that there needs to be clear policies in place that relate to police and the cameras they use.

One lawmaker in Missouri proposed legislation that would make law enforcement camera footage policy clearer, but it should worry anyone concerned with law enforcement accountability and transparency.

Missouri State Senator Doug Libla introduced SB 331 at the end of last month. The bill would exempt footage captured by police cameras (whether attached to uniforms or vehicles) from public record requests except “upon order of a court in the course of a criminal investigation or prosecution or civil litigation.”

Libla’s bill would also ban lawmakers from requiring that law enforcement officers wear body cameras.

Taxpayers deserve to know how the police officers they fund behave. Yet Libla’s proposed legislation would make it prohibitively difficult for members of the public to view footage of police officers doing their job. Under Libla’s proposal, footage of serious police misconduct could be released by court order during an investigation.

However, if implemented, the legislation would mean that in cases in which a victim of police abuse or misconduct is unwilling or unable to sue or press criminal charges, the relevant body camera footage would not be made public. Suing the government is an expensive and time-consuming endeavor with no guarantee of success. Many people who live paycheck to paycheck simply cannot afford a lawyer’s retainer for several thousand dollars to just get into the courtroom to ask for the video to be released.  

A good police body camera policy is one that places greater burden on law enforcement officials, not the public, when it comes to the release of footage. At the very least, a member of the public should have access to any footage of his own encounter with police whether on the street, during a traffic stop, or at his residence, upon filing a formal complaint. A better policy would allow a person to access to any recorded interaction to which he is a party without a formal complaint, barring compelling interest to be shown by the government.

There is, of course, footage of police encounters that should be withheld from the public. For instance, given the potential for privacy violations, it would be inappropriate for members of the public to have access to police body camera footage of the interior of people’s homes. But police body camera footage that captures ordinary police interactions with the public and which does not compromise an ongoing investigation or a citizen’s privacy should be made available.

Lawmakers and law enforcement officials ought to be aware that many Americans do not have much confidence in police. Polling from Gallup shows that last year 53 percent of respondents claimed that they either had a “Great Deal” or “Quite a Lot” of confidence in the police, the lowest percentage of respondents since 1993. Other polling from Gallup shows that the lack of confidence in police is especially low among non-Hispanic blacks, only 34 percent of whom claim that they have a “Great Deal” or “Quite a Lot” of confidence in the police compared to 61 percent of non-Hispanic whites. 

Body cameras will not solve every problem that police departments have relating to community relations and trust. However, with a policy in place that allows members of the public to view police body camera footage, law enforcement officials will be able to demonstrate a commitment to transparency and accountability. There may also be other effects that would benefit communities. Indeed, some evidence suggests that outfitting police officers with body cameras significantly decreases the number of police use-of-force incidents.

An increasing number of lawmakers will be crafting police body camera policies in the coming years. Let’s hope that none of them use Libla’s bill as some sort of template.

 

Adam Bates

A quick glance at the Federal Register (Vol. 80, No. 37, p. 9987-88) today reveals that Attorney General Eric Holder, who earned cautious praise last month for a small reform to the federal equitable sharing program, has now delegated authority to the Director of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) to seize and “administratively forfeit” property involved in suspected drug offenses.  Holder temporarily delegated this authority to the ATF on a trial basis in 2013, and today made the delegation permanent while lauding the ATF for seizing more than $19.3 million from Americans during the trial period.

Historically, when the ATF uncovered contraband subject to forfeiture under drug statutes, it was required to either refer the property to the DEA for administrative forfeiture proceedings or to a U.S. Attorney in order to initiate a judicial forfeiture action.  Under today’s change, the ATF will now be authorized to seize property related to alleged drug offenses and initiate administrative forfeiture proceedings all on its own.

The DOJ claims this rule change doesn’t affect individual rights (and was thus exempt from the notice and comment requirements of the Administrative Procedure Act) and that the change is simply an effort to streamline the federal government’s forfeiture process.  Those who now stand more likely to have their property taken without even a criminal charge may beg to differ.

Further, the department claims that forcing the ATF to go through a judicial process in order to seize property requires too much time and money.  Whereas an “uncontested administrative forfeiture can be perfected in 60-90 days for minimal cost […] the costs associated with judicial forfeiture can amount to hundreds or thousands of dollars and the judicial process generally can take anywhere from 6 months to years.”  In other words, affording judicial process to Americans suspected of engaging in criminal activity takes too long and costs too much. 

Note that the above quote speaks of an “uncontested” forfeiture.  This refers to a situation in which the property owner fails to engage the byzantine process for recovering their property. Defenders of civil asset forfeiture often claim that such failures to contest amount to admissions of guilt, but there is substantial evidence that many victims of civil asset forfeiture simply lack the time, resources, and legal knowledge to fight the bottomless resources of government to get their property back.  This is especially true when it comes to the War on Drugs, within which the bulk of civil forfeiture targets are poor, lack legal education, and lack access to attorneys and other avenues to vindicate their rights.  There are also troubling examples of the government simply never initiating proceedings against the stolen property and thus never giving the owners a chance to “contest” anything at all.

At a time when Attorney General Holder himself has acknowledged the need for asset forfeiture reform, the authorization to take the property of American citizens should be shrinking, not expanding. A country that spoke itself into existence with assertions of the rights to life, liberty, and property can ill afford yet another government agency with the power to seize your property without so much as a criminal charge.

Chris Edwards

Americans are concerned about the performance of the federal bureaucracy. Many people think that federal workers are overpaid and underworked. Some recent news stories provide fresh input to the debate.

A story yesterday at GovExec.com regards pay and performance. The federal pay structure is less efficient than private pay structures because it is generally based on seniority, not job performance. But GovExec.com finds that attempts to introduce federal performance pay have not worked very well either:

Most federal agencies are not making meaningful distinctions in performance ratings and bonuses for senior executives, according to a new watchdog report. About 85 percent of career senior executives received “outstanding” or “exceeds fully successful” ratings in their performance reviews between fiscal years 2010 and 2013, at the same time that agencies have made smaller distinctions in the amount of individual bonuses, the Government Accountability Office found. This has created a system where nearly everyone is considered outstanding…

The level of federal pay is the focus of another recent story. GovExec.com reports on the large number of workers who enjoy high pay:

More than 16,900 federal employees took home in excess of $200,000 in base salary in 2014, according to a partial database of federal salary data.

The report is based on data from FedSmith.com, which is an excellent source of federal workforce information. Fedsmith’s database can list employees and their salaries by agency. For example, there are 159 people at the Small Business Administration who made more than $150,000 in wages in 2014. That’s 159 too many in my view, as the agency should be closed down.

Another recent article regards federal firing. The Federal Times confirms the extraordinarily low firing rate in the federal government compared to the private sector:

Even as lawmakers press for greater accountability within government, agencies have fired fewer employees than at any time in the last 10 years, according to data from the Office of Personnel Management.

Agencies fired 9,537 federal employees for discipline or performance issues in fiscal 2014, down from 9,634 in 2013 and down from a high of 11,770 in fiscal 2010, according to the data. The firing rate held at 0.46 percent of the workforce in both fiscal 2013 and fiscal 2014 — the lowest rate in 10 years.

The private sector fires nearly six times as many employees — about 3.2 percent — according to the Bureau of Labor Statistics, and whether the government fires too few people or just not the right people is the subject of continued debate.

For more on the federal workforce, see here.

Ilya Shapiro

This morning the Supreme Court ruled in Yates v. United States that Sarbanes-Oxley—the massive legislation prompted by the accounting scandals of the early 2000s—can’t be used to prosecute a fisherman who caught undersized grouper.  It makes eminent intuitive sense. Luckily, it’s also correct as a matter of statutory interpretation. That is, even though the relevant provision (Section 1519) punishes those who would knowingly destroy or conceal “any record, document, or tangible object” in order to impede an investigation, Justice Ginsburg is correct in writing for the plurality that “it would cut §1519 loose from its financial-fraud mooring to hold that it encompasses [objects not] used to record or preserve information.”

And Justice Alito, in a narrow concurrence that ultimately controls the case, is even more correct to apply traditional canons of statutory construction—the rules that guide judges in interpreting laws—and thereby find that “tangible object,” in the context of the list of nouns that are Sarbanes-Oxley’s target, refers to “something similar to records or documents.” In a colorful opinion rife with salamanders, crocodiles, and oil derricks, Alito asks the correct question: “How does one make a false entry on a fish?”

As Cato wrote in our brief, words such as “record” and “document” modify the term “tangible object” to include things like hard drives and floppy disks (remember those?), not grouper. Moreover, an all-encompassing reading of “tangible object” would render the words “record” and “document” unnecessary. And the broader context of Sarbanes-Oxley illuminates the relevant meaning here: The Act focuses on financial fraud in the context of companies, not fauna. Thus, the words “tangible object” should be read differently in Sarbanes-Oxley than they would be in, say, the Federal Rules of Criminal Procedure.

If the term “tangible object” were read as broadly as the government wished, it could criminalize an unfathomable range of activities, from throwing away cigarette butts to washing away footprints in the sand. It wouldn’t provide adequate notice about potential legal violations, to which individuals have a right to so they can plan their actions accordingly and avoid getting caught in government nets.

After all, prosecutors and law enforcement officials can’t arbitrarily expand the range of criminal offenses as if they themselves were fishermen, exaggerating the size of their catches to a credulous legal system.

Doug Bandow

Christianity is thriving in China. There may be more religious believers than Communist Party members. 

Beijing’s sensitivities to religion are well-known.  Religion offers a competitive worldview to the Party.  The latter fears many Christians, especially Catholics, have loyalties beyond China’s borders.  Religion brings people together in ways that might eventually influence politics.

In its early days, the People’s Republic of China responded harshly to religious activity, but official policy has moderated over time.  There is an increasing amount of reluctant toleration of religious belief. 

Beijing appears to have a more relaxed policy.  Last year, I visited a church of around 800 in the capital.  It operated openly, attracted many young people, and hosted dozens of baptisms on the Sunday I attended.  I saw a car in traffic that sported the traditional Christian “fish.” 

Ironically, the lesson of the West’s experience with religion is that the best way for a government to avoid conflict between religious believers and political authorities is to provide the greatest freedom possible.  Obviously, there have been many strains of Christianity throughout the centuries.  However, the faith emphasizes a transcendent commitment to God while accommodating many different political perspectives.

The Apostle Paul, whose ministry benefited from the order imposed by the Roman Empire, urged submission to the ruling authorities.  There were exceptions, however, most obviously when secular rulers sought to impede the exercise of faith.

For instance, when the Jewish leadership in the Sanhedrin instructed the Apostles Peter and John to no longer preach about Jesus’s death and resurrection, they responded that they had to obey God rather than men.  The original disciples and their followers persevered despite episodic persecution. 

Ironically, the Romans found Christians to be good citizens.  Indeed, Christians helped ameliorate some of the social problems evident in the ancient world. 

Only when more abusive emperors demanded to be worshiped as gods did Christians resist, often at the cost of their lives. Contra the empire’s expectations, persecution did not extinguish religious faith. 

As Christianity became the majority faith in the West, the faithful began to play a much larger political role.  But in general they sought to shape, not overturn, the political order.  And their greatest concern always was the status of their faith, both individually and communally.  The worst battles between religious and government powers occurred when the latter sought to exercise spiritual authority.  

The PRC doesn’t easily fit into the Western experience.  However, one lesson clearly applies.  The best way to minimize political confrontations between church and state is to reduce government restraints on religion.  Christians have no unified view of politics, but believers everywhere agree on the importance of being allowed to worship God.

Interfering with the ability of people to live their faith guarantees, indeed, requires resistance.  Whatever the government’s objectives, the impact will be social conflict.  Believers will perceive the state to be challenging their core faith. 

As I point out on China-US Focus:  “The Party cannot win this battle.  For years Christianity’s growth was concentrated in rural areas, but recently has spread to the cities and reached a better educated population.  Based on existing growth rates there could be nearly 250 million Christians in China by 2030.” 

Beijing hopes to make Christianity conform to China.  Gu Mengfei of the Three-Self Patriotic Movement, which represents legal Protestant churches, explained that the PRC desired to “encourage more believers to make contributions to the country’s harmonious social progress.”  Such harmony is best achieved by eliminating the greatest source of potential conflict, barriers to religious practice. 

China increasingly is influencing Asia and the world.  But the PRC in turn will be influenced by developments within.  One of those is religion.  The government would best respond in a way that accommodates increased religious faith.

Jeffrey Miron

On February 26, 2015, marijuana becomes legal (again) under the laws of Washington, D.C. The key rules are:

  • It will be legal to possess up to two ounces of pot.
  • It will be legal to smoke said pot on private property.
  • It will be legal to transfer (give) an ounce or less of pot to someone else.
  • It will be legal to grow and cultivate up to six pot plants—no more than three mature ones—in your home.
  • You must be 21 years old to possess, consume, or grow pot.
  • Selling pot will still be illegal.
  • As will be smoking pot in any public space, which includes restaurants, bars, and coffee shops.
  • And, of course, none of this applies to any federal land (which accounts for 22 percent of the District), which considers marijuana illegal.

Overall, this is progress.  But note that:

1. Federal marijuana prohibition still applies.

2. The age limit of 21 is misguided (just as with alcohol).  That limit guarantees that much marijuana use will remain outside the law.

3. The limit on possession amounts is silly; the ban on sale is idiotic.

4. Perhaps restaurants, bars, and coffee shops will circumvent the ban on smoking in public by offering free edibles.

5. The federal government owns 22 percent of the land in D.C.?  Geez.

 

Daniel J. Ikenson

Trade Promotion Authority (TPA or Fast-Track Negotiating Authority) is not an executive power grab.  It is a compact between the legislative and executive branches, which each have distinct authorities under the Constitution when it comes to conducting trade policy. The purpose of forging such a compact is that negotiations would be impracticable – and likely interminable – if each provision were subject to the whims of 535 legislators.

Opponents of trade liberalization have smeared TPA as a wholesale capitulation to the president, who allegedly is freed of any congressional oversight and given a blank check to negotiate unamendable trade deals in secret without any input from Congress – only the capacity to vote up or down on the final deal. In reality, though, TPA is the vehicle through which Congress conveys its trade policy objectives, conditions, and demands to the president, who negotiates with those parameters in mind. Provided the president concludes a negotiation that abides those congressional parameters, the deal is given fast track consideration, which means essentially that legislative procedures are streamlined and expedited.

The trade committees are reportedly close to introducing trade promotion authority legislation, although there remains some debate about what it should include. Enforceable provisions to discipline currency manipulation would be a bad idea, as would be including provisions to reauthorize the ineffective and misguided Trade Adjustment Assistance program (which is widely acknowledged to be a payoff to organized labor).

But one important provision (or set of provisions) that has created a bit of an impasse between Senate Finance Committee Chairman Orrin Hatch (R-UT) and its Ranking Member Sen. Ron Wyden (D-OR) concerns certification that an agreement abides the requisite congressional conditions to be afforded fast track treatment. Those of us who argue that TPA is not an executive power grab, but a practical, constitutional solution to a policymaking quandary must acknowledge the propriety of such a provision – or a provision that accomplishes as much. There must be a mechanism through which the president is held to account – that the deal reflects the broad wishes of Congress.

Under previous TPA legislation, Congress was afforded opportunities to offer “Resolutions of Disapproval” over procedural concerns (including whether the trade deal advanced the objectives and goals of Congress). Such resolutions were required to be reported to and approved by the respective trade committees in each chamber. Certainly, any new trade promotion authority legislation will include similar provisions. But Sen. Wyden is reportedly believes that stripping an agreement of fast track treatment should be easier to accomplish than it was under previous TPA legislation – perhaps by allowing for more channels through which such “resolutions” could come to the floor for a vote and requiring 60, as opposed to 67, votes in the Senate to pass the resolution.

Talk of an affirmative need to “certify” that the agreement comports with congressional objectives – as opposed to passing a resolution that it doesn’t comport – would also seem to present another bottleneck that would amount to a second TPA vote. Of course, many Democratic Party constituencies that oppose trade liberalization generally would appreciate these lower thresholds, which make derailing trade agreements easier.  And that concern explains Chairman Hatch’s view that Wyden’s position would “make it so that fast track won’t work … the whole purpose of fast track is to be able to get these things … either rejected or approved.”

Congress must have the authority to decide whether an agreement qualifies for fast track treatment, otherwise there is nothing to hold the president to account.  But that authority should not be so vast as to negate the purpose and effect of trade promotion authority. Ensuring necessary checks and balances should not be a partisan matter.

Benjamin H. Friedman

The Boston Globe kindly published a piece I wrote about the lack of strategy guiding Pentagon spending, but gave it the somewhat misleading title and subtitle:  “The Pentagon’s Bloat: Accounting tricks and self-interested politicians ensure that US military spending will remain immune from any real ‘hard choices.’”*

The article doesn’t really bemoan bloat, in the standard sense of wasteful or inefficient pursuit of objectives. It complains about excessive objectives—our overly capacious definition of security—and explains the cause.

My argument is that it would be terrific if Ashton Carter, the new Secretary of Defense, and the military service chiefs were correct in their contention that they cannot execute the U.S. security strategy without exceeding the $499 billion cap that law imposes on 2016 Pentagon spending. They made that claim in requesting a budget that requires raising the cap by $34 billion or eliminating it, another $51 billion for war and relief from future years’ caps.

Our current “strategy” isn’t really one. Strategy, by definition, requires prioritization among competing threats and methods of defending against them. Our government uses that word to rationalize the avoidance of those choices. The primacy theory that best describes our approach to security is really a justification for a log-roll of disparate military interests and goals, most only vaguely related to our safety. A poorer state facing more pressing threats would have to choose among those objectives, which is what strategy does. Poverty demands choices that wealth avoids. And as realists explain, big threats unify preferences, lowering obstacles to strategy formation.

The United States has long been rich and safe enough to minimize choices among defenses and avoid strategy. So we get the phony, listicle sort: recitations of nice things that we hope U.S. military power might accomplish, justified as security objectives. That has the effect of conflating safety with values, and promoting a sense of insecurity.

I argue that the current austerity—the Pentagon budget is down almost 25 percent, in real terms, including the wars, since 2010—will not cause us to change course and pick among allies or region to defend, military services to fund, and possible wars to fight. My article’s subtitle notwithstanding, that’s not because of politicians’ self-interest, which, incidentally, is both desirable and imperishable in a democracy.

I blame three other culprits. One is the monopolistic behavior of the military services. If they competed more for each other’s share of the budget, they might offer alternative strategic concepts. Another is the beliefs of the Pentagon civilians who might encourage that sort of competition. They think interservice conflict is always bad, even though it can enhance their management ability, and embrace primacy. Elsewhere I explain why.

A third culprit is the shallowness of the current austerity. The cuts underway take us only back to about 2004 levels of military spending, and two-thirds of that is just declining war costs. So the pressure to make hard choices in the base (non-war) budget is limited. Plus the uncapped war budgets (Overseas Contingency Operations or OCO funding) increasingly include funds that belong in the base. That “accounting trick” pads the budget against austerity and the need for hard choices. Note also that OCO is, like the 2001 Authorization of Military Force, a tool of executive wars powers. Vague AUMFs provide legal authority for wars presidents want to start without further democratic check; OCO provides the funds. Because wars should be hard to start, we should get rid of both.

These factors lead me to conclude pessimistically:

With a trim here and an accounting trick there, the Department of Defense will muddle along its present course, while elected leaders justify it with paeans about American military power’s indispensability to every pleasant noun that “global” can modify. We that object might take solace in the fact that our hubris is a luxury that our fortune affords. Only blessed nations can worry so much about their safety while confusing it with everything they want.

*An article Justin Logan and I wrote for Orbis a few years ago includes a similar but more developed version of this argument. 

Steve H. Hanke

Since the New Year, Ukraine’s currency – the hryvnia – has collapsed, losing 51 percent of its value against the U.S. dollar. To put this rout into perspective, consider that the Russian ruble has only lost 8 percent against the greenback during the same period.

Like night follows day, the hryvnia’s meltdown has resulted in a surge of inflation. The last official Ukrainian year-over-year inflation rate is 28.5 percent. This rate was reported for January and is out of date. That said, the official inflation rate has consistently and massively understated Ukraine’s brutal inflation. At present, Ukraine’s implied annual inflation rate is 272 percent. This is the world’s highest inflation rate, well above Venezuela’s 127 percent rate (see the accompanying chart).

When inflation rates are elevated, standard economic theory and reliable empirical techniques allow us to produce accurate inflation estimates. With free market exchange-rate data (usually black-market data), the inflation rate can be calculated. Indeed, the principle of purchasing power parity (PPP), which links changes in exchange rates and changes in prices, allows for a reliable inflation estimate.

To calculate the inflation rate in Ukraine, all that is required is a rather straightforward application of a standard, time-tested economic theory (read: PPP). At present, the black-market UAH/USD exchange rate sits at 33.78. Using this figure and black-market exchange rate data that the Johns Hopkins-Cato Institute for Troubled Currencies Project has collected over the past year, I estimate Ukraine’s current annual inflation rate to be 272 percent – and its monthly inflation rate to be 64.5 percent. This rate exceeds the 50 percent per month threshold required to qualify for hyperinflation. So, if Ukraine sustains its current monthly rate of inflation for several more months, it will enter the

So, if Ukraine sustains its current monthly rate of inflation for several more months, it will enter the record books as the world’s 57th hyperinflation episode. 

Chris Edwards

Policymakers are battling over a funding bill for the Department of Homeland Security (DHS) and its agencies, including the Federal Emergency Management Agency (FEMA). The disagreement over the bill involves the funding of President Obama’s recent immigration actions.

If a DHS funding bill is not approved, the department will partially shut down. The administration has been highlighting the negative effects of that possibility, but the battle illustrates how the government has grown far too large. Federal shutdowns may cause disruption, but that is because the government has extended its tentacles into activities that should be left to state and local governments and the private sector.

To the extent possible, we should move the most important activities in society out of Washington because the federal government has become such a screwed-up institution. Air traffic control, for example, is too crucial to allow it to get caught in D.C. budget squabbles, as it did in 2013. Air traffic control should be privatized.

Let’s look at the story being told by FEMA head Craig Fugate about a possible shutdown:

I can say with certainty that the current standoff has a real impact on our ability to ensure that a wide range of emergency personnel across the country have the resources they need to do their jobs and keep our communities safer and more secure…

At FEMA, one of our critical missions is reviewing applications and awarding grants to communities across the country, which can help firefighters, police officers, hospital workers, and emergency managers get the staff, training and equipment they need to prepare for, respond to, recover from, and mitigate a wide array of hazards…

Today, we find ourselves in the midst of yet another continuing resolution, which only provides short-term, temporary funding to our agency. This isn’t just a slight technical difference – it has a major impact on our ability to assist state, local, and tribal public safety agencies…

Making matters worse, the current situation is a showstopper for our grant program. Our application process for grants should have started in October; it is now February and we still haven’t been able to issue new grants. Moreover, during these ongoing continuing resolutions, local first responders from across the U.S. have made plans to attend training classes at one of our three national training centers, where they will learn valuable skills they can bring back to their communities – only to have a wrench thrown in the works caused by uncertainty in the budget. Our state, local, and tribal partners are facing increasingly urgent choices about how they will make ends meet without matching FEMA grants.

Mr. Fugate is a well-regarded leader, unlike some of FEMA’s past leaders. But his argument is like if the government took over food distribution in America, the Federal Administrator for Food would point to the urgent crisis if his budget was blocked. The lesson is that the more control the federal government has over society, the more vulnerable we all are to its dysfunction.

As for FEMA, my recent study examines why it is a mistake to fund and direct disaster preparation, response, and relief from Washington. FEMA’s response to some major disasters has been slow, disorganized, and profligate. Fugate implied that local police and firefighters across the country are now hooked on the federal teat. How could that possibly be a good idea?

Federalism is supposed to undergird America’s system of handling disasters, particularly natural disasters. State, local, and private organizations should play the dominant role. So however the current battle over DHS funding turns out, policymakers should begin cutting FEMA’s budget and handing back responsibility for disasters to the states and private sector.

Paul C. "Chip" Knappenberger and Patrick J. Michaels

The White House Council for Environmental Quality (CEQ) has released a draft of revised guidance that “describes how Federal departments and agencies should consider the effects of greenhouse gas emissions and climate change” under reviews governed by the National Environmental Policy Act (NEPA)—an act which basically requires some sort of assessment as to the environmental impacts of all proposed federal actions.

Under the revised guidance, the CEQ makes it clear that they want federal agencies now to include the impact on climate change in their environmental assessments.

But here’s the kicker, the CEQ doesn’t want the climate change impacts to be described using measures of climate—like temperature, precipitation, storm intensity or frequency, etc.— but rather by using the measure of greenhouse gas emissions.

Basically, the CEQ guidance is a roadmap for how to circumvent the NEPA requirements.

Here is how the CEQ characterizes the intent of the NEPA:

NEPA is designed to promote disclosure and consideration of potential environmental effects on the human environment resulting from proposed actions, and to provide decisionmakers with alternatives to mitigate these effects. NEPA ensures that agencies take account of environmental effects as an integral part of the agency’s own decision-making process before decisions are made. It informs decisionmakers by ensuring agencies consider environmental consequences as they decide whether to proceed with a proposed action and, if so, how to take appropriate steps to eliminate or mitigate adverse effects. NEPA also informs the public, promoting transparency of and accountability for consideration of significant environmental effects. A better decision, rather than better—or even excellent—paperwork is the goal of such analysis.

Clearly, the emphasis of NEPA is on the “environment” and better informing policymakers and the public as to the potential impacts of proposed federal actions on the environment.

But here is how the CEQ summarizes the intent of its new guidance:

Agencies should consider the following when addressing climate change:

(1) the potential effects of a proposed action on climate change as indicated by its GHG emissions;

This is represents a fundamental scientific error—greenhouse gas (GHG) emissions are not themselves a measure of an “environmental effect” nor are they an indicator of “climate change.”

This misdirection—one inconsistent with the NEPA— immediately caught our attention and we developed and submitted a Comment on the CEQ guidance that pointed out this glaring error. The public comment period, which originally closed yesterday, has been extended until March 25, 2015.

The sense of our Comment was by cloaking climate change impacts in the guise of greenhouse gas emissions serves not to “promote transparency,” or “inform decisionmakers” and “the public” but rather has the opposite intent—misdirection and misinformation.

Why does the CEQ seek to limit the climate change discussion to greenhouse gases?

In light of the difficulties in attributing specific climate impacts to individual projects, CEQ recommends agencies use the projected GHG emissions and also, when appropriate, potential changes in carbon sequestration and storage, as the proxy for assessing a proposed action’s potential climate change impacts. This approach allows an agency to present the environmental impacts of the proposed action in clear terms and with sufficient information to make a reasoned choice between the no-action and proposed alternatives and mitigations, and ensure the professional and scientific integrity of the discussion and analysis.

They got the first part right. The reason it is “difficult” is not because tools don’t exist—after all that’s what climate models have been developed for, to take carbon dioxide emissions and covert them to environmental impacts—but rather that any attempt to run the emissions through such climate models would show they would have no detectable impact.

In other words, it would prove that the assessment of climate change impacts of federal actions, as directed by the CEQ, to be a complete and utter waste of time.

How do we know this? Because even a complete cessation of all greenhouse gases from the U.S. starting tomorrow and running forever would only serve to avert somewhat less than 0.15°C of future global temperature rise between now and the end of the century—an amount that is environmentally insignificant. Lesser actions will have lesser impacts; you can see for yourself here.

This is the last thing the White House wants federal agencies to conclude. So instead of assessing actual climate impacts (of which there are none) of federal actions, the CEQ directs agencies to cast the effect in terms of greenhouse gas emissions—which can be used for all sorts of mischief.  For example, see how the EPA uses greenhouse gas emissions instead of climate change to promote its regulations limiting carbon dioxide emissions from power plants.

No doubt this is the type of analysis that the CEQ has in mind—one which seeks to elevate policy initiatives (like the Climate Action Plan) above hard scientific analysis.

Here is how we concluded our Comment to the CEQ:

To best serve policymakers and the general public, the CEQ should state that all but the largest federal actions have an undetectable and inconsequential impact on the environment through changes in the climate. And for the largest federal actions, an analysis of the explicit environmental impacts resulting from greenhouse gas emissions arising from the action should be detailed, with the impacts assessment not limited to climate change but also to include other environmental effects such as impacts on overall vegetative health (including crop yield and production).

As called for in the guidelines described in this current draft—substituting greenhouse gas emissions for climate change and other environmental impacts—is not only insufficient, but is scientifically inadequate and potentially misleading. As such, these CEQ guidelines should be rescinded and discarded.

Our Comment, in its entirety, is available here.

Jonathan Blanks

Those who follow police misconduct closely know that patterns of abuse can become normalized when tolerated or unchecked by police supervisors. Abuses that went unreported or were unsubstantiated in years past have been exposed by the growing presence of camera phones and other technologies that record police-public interactions. But they can’t catch them all.

The Guardian’s Spencer Ackerman has reported a truly disturbing practice in Chicago. The police have established a “black site” area where Americans are held incommunicado to be interrogated. Prisoners are held without charge and in violation of their constitutional rights and without access to legal counsel:

The facility, a nondescript warehouse on Chicago’s west side known as Homan Square, has long been the scene of secretive work by special police units. Interviews with local attorneys and one protester who spent the better part of a day shackled in Homan Square describe operations that deny access to basic constitutional rights.

Alleged police practices at Homan Square, according to those familiar with the facility who spoke out to the Guardian after its investigation into Chicago police abuse, include:

  • Keeping arrestees out of official booking databases.
  • Beating by police, resulting in head wounds.
  • Shackling for prolonged periods.
  • Denying attorneys access to the “secure” facility.
  • Holding people without legal counsel for between 12 and 24 hours, including people as young as 15.

At least one man was found unresponsive in a Homan Square “interview room” and later pronounced dead.

Unlike a precinct, no one taken to Homan Square is said to be booked. Witnesses, suspects or other Chicagoans who end up inside do not appear to have a public, searchable record entered into a database indicating where they are, as happens when someone is booked at a precinct. Lawyers and relatives insist there is no way of finding their whereabouts. Those lawyers who have attempted to gain access to Homan Square are most often turned away, even as their clients remain in custody inside.

“It’s sort of an open secret among attorneys that regularly make police station visits, this place – if you can’t find a client in the system, odds are they’re there,” said Chicago lawyer Julia Bartmes.

This is not Chicago’s first brush with systematic abuse of citizens. Just this month, a retired CPD detective was released from prison for covering up the torture and false confessions of over 100 people in the 1970s and ‘80s. He still collects a $4,000 per month pension.

Police transparency is essential to effective policing, but police organizations often protect their officers from outside scrutiny, making it difficult to hold officers accountable for repeated violations of policy. Secretive internal investigations can stonewall public inquiry into disputed officer-related shootings committed in broad daylight. Left unchecked, entire police departments can develop institutional tolerance for constitutional violations in day-to-day policing. 

But what Ackerman reports seems to be the ultimate lack of police transparency. If what he reports is true, a full investigation should be launched by government officials outside of the Chicago Police Department to examine such egregious violations of civil and constitutional rights.

At PoliceMisconduct.net, we’re shining a light to bring these abuses out into the open.

Read Ackerman’s powerful report here.

Julian Sanchez

At a  New America Foundation conference on cybersecurity Monday, NSA Director Mike Rogers gave an interview that—despite his best efforts to deal exclusively in uninformative platitudes—did produce a few lively moments. The most interesting of these came when techies in the audience—security guru Bruce Schneier and Yahoo’s chief information security officer Alex Stamos—challenged Rogers’ endorsement of a “legal framework” for requiring device manufacturers and telecommunications service providers to give the government backdoor access to their users’ encrypted communciations. (Rogers repeatedly objected to the term “backdoor” on the grounds that it “sounds shady”—but that is quite clearly the correct technical term for what he’s seeking.) Rogers’ exchange with Stamos, transcribed by John Reed of Just Security, is particularly illluminating:

Alex Stamos (AS): “Thank you, Admiral. My name is Alex Stamos, I’m the CISO for Yahoo!. … So it sounds like you agree with Director Comey that we should be building defects into the encryption in our products so that the US government can decrypt…

Mike Rogers (MR): That would be your characterization. [laughing]

AS: No, I think Bruce Schneier and Ed Felton and all of the best public cryptographers in the world would agree that you can’t really build backdoors in crypto. That it’s like drilling a hole in the windshield.

MR: I’ve got a lot of world-class cryptographers at the National Security Agency.

AS: I’ve talked to some of those folks and some of them agree too, but…

MR: Oh, we agree that we don’t accept each others’ premise. [laughing]

AS: We’ll agree to disagree on that. So, if we’re going to build defects/backdoors or golden master keys for the US government, do you believe we should do so — we have about 1.3 billion users around the world — should we do for the Chinese government, the Russian government, the Saudi Arabian government, the Israeli government, the French government? Which of those countries should we give backdoors to?

MR: So, I’m not gonna… I mean, the way you framed the question isn’t designed to elicit a response.

AS: Well, do you believe we should build backdoors for other countries?

MR: My position is — hey look, I think that we’re lying that this isn’t technically feasible. Now, it needs to be done within a framework. I’m the first to acknowledge that. You don’t want the FBI and you don’t want the NSA unilaterally deciding, so, what are we going to access and what are we not going to access? That shouldn’t be for us. I just believe that this is achievable. We’ll have to work our way through it. And I’m the first to acknowledge there are international implications. I think we can work our way through this.

AS: So you do believe then, that we should build those for other countries if they pass laws?

MR: I think we can work our way through this.

AS: I’m sure the Chinese and Russians are going to have the same opinion.

MR: I said I think we can work through this.

I’ve written previously about why backdoor mandates are a horrible, horrible idea—and Stamos hits on some of the reasons I’ve pointed to in his question.   What’s most obviously disturbing here is that the head of the NSA didn’t even seem to have a bad response prepared to such an obvious objection—he has no serious response at all. China and Russia may not be able to force American firms like Google and Apple to redesign their products to be more spy-friendly, but if the American govenrment does their dirty work for them with some form of legal backdoor mandate, those firms will be hard pressed to resist demands from repressive regimes to hand over the keys. Rogers’ unreflective response seems like a symptom of what a senior intelligence official once described to me as the “tyranny of the inbox”: A mindset so myopically focused on solving one’s own immediate practical problems that the bigger picture—the dangerous long-term consequences of the easiest or most obvious quick fix solution—are barely considered.

What we also see, however, is a hint to why officials like Rogers and FBI Director James Comey seem so dismissive of the overwhelming consensus of security professionals and crypographers that it’s not technically feasible to implement a magical “golden key” that will permit the “good guys” to unlock encrypted data while leaving it secure against other adversaries.  No doubt these officials are asking their own experts a narrow, technical question and getting a narrow, technically correct answer: There is a subfield of cryptography known as “kleptography” that studies the design of “asymmetric backdoors.”  The idea is that the designer of a cryptographic algorithm can bake into it a very specific vulnerability that depends on a lengthy mathematical key that is too large to guess and cannot be easily reverse-engineered from the algorithm itself. Probably the most famous example of this is the vulnerability in the Dual Ellipitic Curve algorithm NSA is believed to have inserted in a widely-used commercial security suite.  More prosaically, there is the method companies like Apple use to control what software can run on their devices: Their processors are hard-coded with the company’s public key, and (in theory) will only run software signed by Apple’s private developer key.

So there’s a sense in which it is technically feasible to do what NSA and FBI would like. There’s also a sense in which it’s technically possible for a human being to go without oxygen for ten minutes—but in practice you’ll be in for some rude surprises unless you ask the follow up question: “Will the person be left irreperably brain damaged?” When Comey or Rogers get a ten minute briefing from their experts about the plausibility of designing “golden key” backdoors, they are probably getting the technically accurate answer that yes, on paper, it is possible to construct a cryptographic algorithm with a vulnerability that depends on a long mathematical key known only to the algorithm’s designer, and which it would be computationally infeasible for an adversary to find via a “brute force” attack. In theory. But to quote that eminent cryptographer Homer Simpson: “I agree with you in theory, Marge.  In theory, communism works. In theory.” 

The trouble, as any good information security pro will also tell you, is that real world systems are rarely as tidy as the theories, and the history of cryptography is littered with robust-looking cryptogaphic algorithms that proved vulnerable under extended scrutiny or were ultimately impossible to implement securely under real-world conditions, where they crypto is inevitably just one component in a larger security and software ecosystem. A measure of adaptability is one virtue of “end to end” encryption, where cryptographic keys are generated by, and held exclusively by, the end users: If my private encryption key is stolen or otherwise compromised, I can “revoke” the corresponding public key and generate a new one. If some clever method is discovered that allows an attacker to search the “key space” of a cryptosystem more quickly than was previously thought possible, I can compensate by generating a longer key that remains beyond the reach of any attacker’s computing resources. But if a “golden key” that works against an entire class of systems is cracked or compromised, the entire system is vulnerable—which makes it worthwhile for sophisticated attackers to devote enormous resources to compromising that key, far beyond what it would make sense to expend on the key for any single individual or company.

So maybe you don’t want a single master key: Maybe you prefer a model where every device or instance of software has its own corresponding backdoor key. This creates its own special set of problems, because now you’ve got to maintain and distribute and control access to the database of backdoor keys, and ensure that new keys can’t be generated and used without creating a corresponding key in the master database. This weak point—key distribution—is the one NSA and GCHQ are purported to have exploited in last week’s story about the theft of cell phone SIM card keys.  Needless to say, this model also massively reduces the flexibility of a communications or data storage system, since it means you need some centralized authority to generate and distribute all these keys.  (Contrast a system like GPG, which allows users to generate as many keys as they need without any further interaction with the software creator.) You also, of course, have the added problem of designing your system to resist  modification by the user or device owner, so the keys can’t be changed once they leave the manufacturer.

As I’ve argued elswhere,  the feasibility of implementing a crypto backdoor depends significantly on the nature of the system where you’re trying to implement it.  If you want backdoors in an ecosystem like Apple’s, where you have a single manufacturer producing devices with hardcoded cryptographic keys and exerting control over the software running on its devices, maybe (maybe) you can pull it off without too massive a reduction in the overall security of the system.  Ditto if you’re running a communications system where all messages are routed through a centralized array of servers—assuming users are willing to trust that centralized hub with access to their most sensitive data.  If, on the other hand, you want backdoors that are compatible with a decentralized peer-to-peer communications network that uses software-generated keys running on a range of different types of computing hardware, that’s going to be a much bigger problem.  So when Mike Rogers asks his technical experts whether Apple could realistically comply with a mandate to provide backdoor access to encrypted iPhone data, they might well tell him it’s technically doable—but that doesn’t mean there wouldn’t be serious problems implementing such a mandate generally.

In short, Rogers’ dismissive attitude in the exchange above seems like prime evidence that a little knowledge can indeed be a dangerous thing. He’s got a lot of “world class cryptographers” eager to give him the—very narrowly technically accurate—answer he wants to hear: It is mathematically possible to create backdoors of this sort, at least on certain types of systems.  The reason the rest of the cryptographic community disagrees is that they’re not limiting themselves to giving a simplified five-minute answer to the precise question the boss asked, or finding an abstract solution to a chalkboard problem.   In other words, they’re looking at the bigger picture and recognizing that actually implementing these solutions across a range of data storage and communications architectures—even on the dubious premise that the global market could be compelled to use broken American crypto indefinitely—would create an intractable array of new security problems.  We can only hope that eventually one of the in-house experts that our intelligence leaders actually listen to will sit the boss down for long enough to break the bad news.

Ilya Shapiro

Freedom of contract—the right of individuals to manage and govern their own affairs—is a basic and necessary liberty. The appropriate role of the government in contract-law disputes is to hold parties to their word, not to enforce its own policy preferences.

The New Jersey Supreme Court recently struck a blow against that basic freedom, however, in ruling that clearly worded arbitration provisions—one of the most common parts of consumer contracts—are unenforceable unless the parties comply with multiple superfluous formalities. The case arose when Patricia Atalese retained a law firm, U.S. Legal Services Group, to negotiate with creditors on her behalf. Atalese signed a retainer agreement with a standard arbitration provision: she checked a box that unambiguously indicated that she read and understood that all disputes would be settled via arbitration. Then, after a dispute over legal fees, Atalese disregarded the arbitration agreement and filed a lawsuit in state court.

The trial court dismissed her complaint and compelled arbitration, a ruling that was affirmed by the intermediate appellate court. But instead of letting that decision stand, the New Jersey Supreme Court broke from years of tradition and federal precedent found the arbitration provision unenforceable because it lacked certain magic words stating, in addition to all disputes being resolved by arbitration, that the parties were waiving their right to a civil jury trial.

Cato, joined by the National Federation of Independent Business, has filed an amicus brief urging the U.S. Supreme Court to review the case. We make three key points. First, the New Jersey court’s proposed requirement—that contracts with an arbitration provision include belt-and-suspenders-and-drawstring language regarding jury-trial waiver—is redundant. Agreeing to submit a dispute to an impartial arbitrator instead of going through the expense of litigation is the very essence of an arbitration agreement.

Second, the ruling is contrary to federal law. The Federal Arbitration Act, which has been in place for nearly 100 years, affords arbitration agreements certain protections. Specifically, it demands from the states a certain amount of even-handedness: states can’t nullify or refuse to enforce such agreements for reasons other than those that would invalidate any contractual provision (e.g., coercion, fraud, illegal subject matter, etc.). Since New Jersey law doesn’t require parties to state clearly that they understand the legal consequences of other contractual provisions (since a signature is accepted as evidence that the agreement was read and understood), applying that additional standard to arbitration agreements alone would violate federal law.

Finally, this ruling threatens to upset the business world by calling into question the validity of millions of contracts to which parties have mutually and unambiguously agreed. The vast majority of arbitration provisions, including many of those featured in previous Supreme Court cases, don’t include the explicit language mandated by the New Jersey ruling.

In short, the value of contracts lies in the certainty they create while enabling mutual gains. By creating substantial uncertainty about the enforceability of tens of thousands of arbitration agreements, the New Jersey Supreme Court will force businesses, litigants, and the taxpayers who fund the court system to waste time and money litigating disputes that would be more appropriately resolved by arbitration—as all the parties agreed in the first place.

The Supreme Court will decide whether to take up U.S. Legal Services Group v. Atalese this spring.

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