Law Enforcement Has a License to Steal
from You

Time was when the roads between villages and towns were perilous. One risked being set upon by highwaymen who’d make off with all your worldly goods. Fortunately, those days or gone — or so you thought. Fact is, across the country there are bands of highwaymen newly risen to steal from you as you pass through their territory. But they are not spoken of as “highwaymen”. They are called “police”.

Response to the demonstrations in Ferguson, Mo., made Americans aware of the ominous militarization of police forces around the country. But the armament we saw there and in the shutdown of Boston after the marathon bombing generally stays in the barn. The greater everyday danger for motorists is police patrolling the highways who stop people on their way elsewhere, search their cars and confiscate whatever they find. For the victims, the fight for the return of money, property and even the cars themselves can take a year or more.

And it is legal. The police operate under the protection of what is called civil asset forfeiture law. Its roots go back to 17th Century British Admiralty law used for seizing ships. Its early use here was for the similar purpose of combating piracy and smuggling when capture of violators could be difficult. The Supreme Court’s justification was that it was the “vessel which commits the aggression [and] is treated as the offender”. The law then lay largely dormant in this country until it was adapted here in the 1970s for the purpose of crippling the drug trade by seizing property — boats, aircraft, vehicles, houses — inferred to have been bought with the illegal proceeds of drug trafficking. Applied for that purpose, it has been a powerful weapon.

But after 9/11 the Homeland Security Department encouraged local law enforcement to join its hunt to keep America safe from terrorists and anyone suspect of transporting immigrants, drugs or other contraband. As an inducement, the Justice Department promoted the Equitable Sharing Program it had set up in 1984 that collaborates with local police allowing them to keep up to 80% of confiscated property with the freedom to do with the proceeds as they please. Local and state police units around the country have since become addicted to this new form of income. An attitude by police seems to have arisen that, in this tight economy, they are entitled to the booty confiscated from home and auto searches. That their prey may be entirely innocent of any wrongdoing is swept aside as if these seizures are just the price some hapless individuals must pay for the greater public weal.

Investigative work by The New Yorker and The Washington Post reports that a cottage industry has grown up that trains police how to stop and seize. Their accounts relate the experiences of motorists caught in police fishing expeditions from which this composite emerges:

Police typically haul drivers off the road for bogus violations like driving too close to the white line, or driving too long in the left lane without passing. Then follows a request to search the car. Motorists can refuse, but out there on the blue highways of America, good luck with that. If anything is found that the trooper or officer can characterize as suspicious — a large sum of money, for example — the car’s occupant is told either to sign a waiver that forfeits whatever of value is found or face felony charges. Most sign and go on their way. The few who do pursue return of their property typically find themselves waiting a year or more.

These are civil, not criminal, matters. Under forfeiture law the burden of proof is reversed: It is your property that is guilty until you prove it innocent of any criminal activity, until you prove it was acquired legally. The actions are taken against the property itself, leading to strangely titled lawsuits such as County of Yancey v. $2,578.00. And because these are civil cases, the state does not provide counsel to those unable to afford a lawyer. Quite the opposite in Washington, D.C., where one must pay an entry fee just to challenge a seizure in court. Rather than run up the legal bill, most just give up. “Forfeiture cases…are almost impossible to fight,” said one lawyer after devoting hundreds of hours to a case. “It’s the Guantánamo Bay of the legal system.”

small fry

People innocent of any crime do carry cash in large amounts when cash is required by the seller in a business transaction. Cars often change hands for cash, but a large wad of bills are prime pickings for police who are allowed under the forfeiture law to make the prima facie assumption of drug deals or money-laundering.

So $75,000 was taken by the police that was on the way to buy a Chinese restaurant in Louisiana. It took 10 months and heavy legal fees for the owners of the money to get it back; the restaurant opportunity was lost.

Two Latino men were stopped on I-95 by a Virginia state trooper who found $28,500 they said had been collected from congregants of their church in Baltimore. The money was for building a church in El Salvador, but the ignored their explanation and treated it as of criminal origin. Following the shakedown script — this particular trooper being a member of an organization that trains other police in interdiction technique — the two were told to sign a roadside waiver that relinquished ownership of the cash or else be detained and charged with a felony. They did get the money back three months later after substantiating its origin and with the help of lawyers working without fee.

Police budgets had been slashed in Detroit, a city that would later file for bankruptcy. In Detroit in 2008, an event hosted by the Contemporary Art Institute was invaded by 40-or-so police claiming that the gallery lacked a permit for dancing and drinking. Guests were ordered to surrender their car keys; the police impounded 44 vehicles and charged each owner a $900 ransom with ownership forfeited if not promptly paid. The ACLU sued and the seizure was ruled unconstitutional, but in the interim, when cars are taken and held, people are badly incapacitated, unable to commute to jobs, take children to school, shop for food, and no compensation is paid them for the disruption.

If these incidents seem the exception, consider that since expansion of the program after 9/11, the Post article says the Justice Department has participated in 61,998 cash seizures with state and local authorities keeping $1.7 billion of a total haul of $2.5 billion. That’s an average of over $40,000 per seizure, so clearly drug-trafficking and money-laundering are involved and the program can declare some measure of success. But half of the forfeitures were less than the median $8,800. Philadelphia’s average take is $550 says a Wall Street Journal editorial that focuses on that city. In Georgia, 58 police jurisdictions reported more than half of takings were less than $650.

the profit motive

Police departments across the country have become reliant on forfeited property to fill the holes in reduced budgets. A federal ban on the practice, or on using proceeds to pay salaries, is routinely flouted.

Some states like Maine, Missouri, North Dakota, and Vermont restrict how police can use the proceeds of forfeiture, which reduces incentives for abuse. It is mostly the southern states such as Virginia, Georgia and Texas where use is unrestricted and abuse runs highest.

The Post‘s research counted 298 departments and 210 task forces that since the 2008 plunge have funded 20% or more of their budgets from confiscation. The New Yorker said Texas counties fund up to 40% of their budget from the practice.

The perversion is that confiscation — preying on the general public — has become a profit center. The Justice Department’s Equitable Sharing program has given police the incentive to steal. No less than the executive director of the Sheriffs’ Association of Texas said to the New Yorker that, “It’s definitely a valuable asset to law enforcement, for purchasing equipment and getting things you normally wouldn’t be able to get to fight crime.”

Philadelphia is a major abuser of the law. Police and prosecutors took in $64 million between 2002 and 2012 in a state that allows them to keep 100% of the loot, says that Journal edit. It’s been used to pay for 20% of the Philadelphia District Attorney’s general budget and the staff’s salaries. Supplicants who hope to get their money back find themselves appealing not to a judge but to their adversary, a prosecutor in an office at City Hall.

The Justice Department has done well from its Equitable Sharing program, seemingly not overly bothered with whether forfeiture targets might be actual drug mules or just innocent civilians. Its take from the nation’s police departments energetically separating people from their property — $27 million the year after the program started — rocketed to $4.2 billion in 2012. State laws may forbid forfeiture, as does North Carolina, but local police need only call in someone from Justice to make it a federal matter that trumps a state’s prohibition. That’s how one North Carolina police unit could skirt the state’s law and spend $44,000 of confiscated drug money to buy a surveillance drone.

The easy money makes cops go rogue. A vice squad out of Bal Harbour, Florida, roamed the country setting up money-laundering sting operations in league with federal agencies, splitting the take. “Very lucrative, they got fancy boats, fancy guns and cars and good stuff like that”, said a former South Florida prosecutor — specifically, $100,000 for a 35-foot boat powered by three Mercury outboards, $108,000 for a mobile command truck equipped with satellite and flat-screen TVs, $25,463 for next generation Taser X-2s, a Chevy Tahoe, Apple computers, first class airfare to their heist destinations, and $21,000 spent on a beach party. In just three years they brought in $56 million before the Justice Department blew the whistle. That prosecutor said squads like this are not uncommon, often venturing out from communities that don’t have drug or laundering crime but whose police departments need the money.

nothing is done

Certainly as practiced in roadside stop and search, civil forfeiture is unconstitutional, violating unreasonable the search and seizure of the 4th Amendment and the due process clause of the 14th. Those amendments pertain to people, however, which may explain the ruse of suing the objects and not persons. Moreover, the Constitution is often spoken of but not honored at the small town level where judges are reluctant to go up against their own police who might be their neighbors as well.

But at higher levels, too, law enforcement officials are loath to give up the honey pot that’s been paying their bills. So we read of the Washington, D.C., Attorney General acknowledging the due process conflict yet voicing concern that millions of dollars “could very easily be lost” to the running of his office posing and “an unreasonable burden” if greater proof were required that forfeitures were of criminal original.

Newspaper accounts of corruption did prompt Congress in 2000 to allow owners to recover their legal costs after successful lawsuits. But they did not eliminate the sharing of money between federal agencies and local police that was called the “perverse incentive” to steal from the public they are sworn to protect. That reform was dropped owing to what former representative Barney Frank of Massachusetts said was a voracious lobbying campaign by none other than the Justice Department itself.

Obama Goes All In on Immigration

Are You For Net Neutrality, and Against Government Regulation?

It’s all so confusing. To most of us the Internet may seem to be a Utopian phenomenon existing somewhere in cyberspace and belonging to the people of the world but the governments of that world have a different view. They want to claim it for their own.

In the United States, the Federal Communications Commission appointed itself as custodian, even though there is nothing on the books — no act of Congress, say — that confers this privilege. The FCC has been grappling interminably with just what to do with the beast.

The commission had set rules that the public likes, rules that are a light touch and primarily support “net neutrality”, which could be defined as requiring the Internet service providers (ISPs) — the phone, cable and satellite companies — to treat all content flowing through their pipes the same, restricting none and favoring none. They cannot charge different rates for differing content, whether it is your e-mail or full movies streamed by Netflix.

But federal courts have twice struck down those rules saying the FCC has overstepped its authority. Their position is that companies such as Comcast, Verizon and AT&T should be free to charge what they please for delivering to our computers, tablets and smart phones content from companies such as Netflix, Amazon and Google’s YouTube.

After wrestling interminably to find a solution that would satisfy the courts, after coming up with a hybrid to satisfy both sides that no one likes, after being engulfed by the largest outpouring of public comments in history — over four million submissions — the five-member FCC board was stunned by President Obama suddenly urging the commission in early November to go all out and tie the Internet to the mast of public utility law to keep big corporations from throwing net neutrality overboard. Obama is advocating that the FCC reclassify the ISPs not as “information services”, the term it now uses, but as “common carriers” under the Communications Act of 1934 which prescribes that all users of the ISPs be treated equally and indiscriminately.

That is anathema to the Verizons, Comcasts and AT&Ts and their lobbyists flooding Washington corridors. Why should they have to pay to build the equipment infrastructure to provide the voluminous bandwidth needed to stream those movies without being allowed to charge extra?

pollpourri

Polls have shown the public to be all over the map largely because of how questions are phrased. Most recently a Rasmussen poll said 61% were against net neutrality, but the question they answered was “Should the Internet remain ‘open’ without regulation and censorship or should the Federal Communications Commission regulate the Internet like it does radio and television?” Not surprisingly, respondents recoiled at government regulation not realizing that “open” means corporations can do as they please whereas placing ISPs under public utility rules is meant to preserve net neutrality.

Amplifying the confusion, Texas Republican Senator Ted Cruz got it all wrong in this Washington Post op-ed warning us of “threats from Washington to stifle freedom, entrepreneurship…in the form of crushing taxes, rules and regulations”.

Quite the opposite, the fear is that if there be no rules, leaving corporations free to develop tiers of paid Internet access, the egalitarian nature of the Internet will be fragmented into haves and have nots. Large companies will cut payment deals that guarantee their content will always be fast-tracked so that there will be no “buffering” pauses in their movies and videos. Other users will be side-tracked until the express has gone through. And indeed, no sooner than the court had struck down the FCC rules than Netflix agreed to pay Comcast for just such specially expedited flow-through.

Removal of the equal treatment that has allowed innovation to flourish and new ideas to arise could pose difficulties for fledgling companies trying to compete with prosperous, established Internet titans that buy heightened service that the newcomers cannot afford.

But why shoudn’t those titans pay for the heavy burden they place on the ISPs, goes the counter-argument. At any given moment they are sending entire movies to hundreds of thousands of households poaching on another company’s costly infrastructure yet paying no premium.

But if ISPs are left free to become toll gates might the Internet slowly degrade into price lists for everyone, charging the YouTubes and the Hulus and the Spotifys based on how much data they transmit. Or to cover the cost of those heavy downloads might the ISPs also switch from the mostly flat fees they charge consumers today for Internet access to “net-metering”, where a Verizon or a Cablevision sends us a monthly bill for exactly how much bandwidth we used? That may be just routine capitalism, but having to fret over how much time we spend with Facebook, Yahoo or Twitter, or whether the volume of e-mail we send and receive is getting out of hand, is an outcome no one wants. It would mark the end of so much of the free exchange of ideas and information throughout the world that has made the Internet so valuable a medium.

The FCC’s option of declaring the providers “common carriers” gets rid of all these complications. Declaring that the ISPs must accept everyone as equals irrespective of volume is so much simpler. Unfair, perhaps, but you could make the argument that it’s the give back the ISPs owe to society in return for their near monopoly status in the areas where they operate.

Except there’s a problem with that, too. What inducement is there for those ISP companies to build out their infrastructure to accommodate the ever expanding stream of data uploads and downloads? Why should they be expected to subsidize the free ride of the content companies? We saw that right away when AT&T, reacting to the President’s salvo, returned a bow shot, announcing it has paused its planned investments in high-speed fiber-optic cable networks. The result will be deteriorating Internet delivery that will cause the U.S. to lag still further behind other countries. (As it is, we rank 30th in the world, 70% slower than the leader, Hong Kong.)

So, faced with deciding which plan to decree, the board of the FCC must deal with a Gordian knot that every attempt to disentangle meets with backlash. Following Obama’s intrusion, no wonder that the New York Times reports that FCC Chairman Tom Wheeler is “testy, defensive and a bit angry”.

There will be global repercussions for whatever course the U.S. takes, There is an irony of enchaining the ISPs in public utility regulations to keep the Internet free. Other countries will point to “government control” to justify their doing the same the U.S. That will sanctify the practices of countries like Russia and China who today are at least chastised for violating net neutrality when they snoop on search words and block access to sites. They chafe at U.S. control of the Internet — never mind that it is a U.S. invention. Russian President Vladimir Putin has for years been working to upend a 1988 agreement between 114 countries that left the Internet unfettered. The specter of a future in which Russia or China gets to set any Internet rules says the U.S. should not relinquish any control.

Tax Refunds Delayed. Want to Know Why?

If you are expecting a refund of some of your 2014 tax withholdings, the Internal Revenue Service commissioner says it is likely you will have to wait longer than usual.

But it’s not the IRS’s fault. It is because Congress has done nothing about renewing or otherwise dealing with provisions in the tax code that have expired. Until it does, the IRS does not know what’s in and what’s out, and that delays software patching and the design and release of forms and instructions you need to apply for a refund.

We know why Congress has not acted, of course. They were too busy winning re-election as a reward for the jobs they haven’t done. If your refund is in fact delayed, be sure to write or phone your Congress members your thanks for putting themselves first.

Having produced only 142 pieces of legislation, this year’s Congress is the least productive on record. They as usual took full week holidays where we take one day (e.g., Easter, 4th of July), took five weeks off from August into September (they call their recesses “district work periods”), and then immediately vanished for 53 more days until returning a week after election day.

Interviewed on MSNBC a couple of weeks ago, Texas Republican Senator Ted Cruz ventured the opinion that there was really no point to the lame-duck session of Congress just now beginning. The minuscule number of newcomers who begin their terms in January should be given the opportunity to have their say. His idea would have added another two months of idleness.

By its own admission, Congress has been in session only 119 days so far and even that number is suspect. The calendar on the Congress website shows a number of Fridays as working days. But Congress is infamous for not showing up until Tuesdays and Mitch McConnell in his press conference the day after the election was honest enough to say, “I don’t think we’ve had any votes on Friday in anybody’s memory”.

Is it any wonder that voter turnout was the lowest percentage since 1942 — a year when we were overseas fighting World War II. Why take off from work to vote for senators and representatives who don’t show up for work?

Fate of Your Internet About to be Decided

The FCC had come up with a two-tiered “solution” to the hotly contested issue of “net neutrality” when the President went all in for placing the Internet under the same public utility laws as the phone companies. This page did its best to explain both sides of the controversy in “What’s Going to Happen to Your Internet?” this past June.

Coming Soon? A Trade Agreement Called ‘NAFTA on Steroids’?

Obama, McConnell, Boehner: Niceties Over, Combat Begins

Americans want to see Congress and the President “get stuff done”, as Obama put it, but the opening sentences of press conferences expressing earnest desires to do so quickly turned to threats. The media focused on presumptive Senate Majority Leader Mitch McConnell’s “red flag in front of a bull” and House Speaker John Boehner’s jumbled metaphor warning Obama he would “poison the well…when you play with matches” if he unilaterally acts on immigration. But you’ve heard about that repeatedly. More useful here is to dig a little deeper and listen to what else was said about Republican plans now that they control both Senate and House.

obamacare vendetta

Not two days had passed before an op-ed co-written by McConnell and Boehner appeared in The Wall Street Journal that right off renewed their “commitment to repeal Obamacare”. Not fix, repeal. “I’m sure at some point next year we will move to repeal Obamacare because it should be repealed”, Boehner said in his
press conference the same day.

This time it won’t just be the House voting to repeal 50-or-so times, but McConnell’s Senate signing on as well. It was he who said, “I want to pull this law out, root and branch” a year and a half ago. His press conference the day after the election left no doubt that this intention has not abated. “Every one of my members thinks that Obamacare was a huge legislative mistake. It’s fouled up the health insurance market, put states in a deep hole in terms of the Medicaid expansion and their own ability to finance it a few years from now. If I had the ability…obviously, I’d get rid of it”.

It was a curious choice of “facts”, though. Insurers have millions more new customers and to get in on the action there will be a 25% increase of insurers joining the exchanges in 2015. As for Medicaid, because the Supreme Court ruled that the federal government cannot constitutionally force the states to expand their programs, opting to do so is therefore voluntary. The 27 states that took up the the Affordable Care Act’s offer to pay all of its cost for the first two years and never more than 10% in the years thereafter presumably decided they can handle that future cost or they would not have volunteered. Most of the 23 states that have refused have Republican governors and/or legislatures and do not face any financial burden from the Act, so what is McConnell’s point?

He went on to say about Obamacare that “there are pieces of it that are deeply, deeply unpopular with the American people”. The average of
seven October polls tallied at Real Clear Politics has 51.6% against and 38.1% for Obamacare. Exit polls taken by CNN had 47% saying Obamacare went too far, but that left 53% saying it was either about right or didn’t go far enough.

The oft-reported anomaly about the Affordable Care Act is that since its beginning a firm majority has always been against it. But when people are asked about the Act’s individual features — insurers cannot deny coverage to those with pre-existing conditions, cannot cancel insurance of those who fall ill, keeps young persons on their parent’s insurance until age 26 — they like the particulars. A vigorous attempt to kill the law could backfire on the Republicans when families realize those benefits are being yanked away. And after going through the signup upheaval, will the public erupt when told they have to do it all over again?

President Obama will obviously veto any repeal attempt, but “that doesn’t mean that we shouldn’t do other things”, said Boehner. The expectation is that the Republican-controlled Congress will instead chip away at the healthcare law. First and foremost, the individual mandate. “People hate it”, said McConnell. “There are Democrats and Republicans who believe [it] is unfair”, said Boehner.

But that’s another Obama veto. He might even underscore his signature. Obamacare is engineered to work financially for both government and the insurers. Whether the equation is properly balanced is yet to be learned, but knock this key support out from under it — that everyone of certain means must pay for insurance — and the program will crash. That, of course, is a wreck that Republicans yearn to witness.

Both cited repeal of the medical device tax, which McConnell says ” has exported an enormous number of jobs”, as well as getting rid of the “IPAD” — the Independent Payment Advisory Board, and restoring 40 hours as the definition of full-time employment.

That last is aimed at the Affordable Care Act’s requiring business to pay for health insurance for employees who work more than 30 hours a week. If the criterion were changed to 40 hours, employers would not have to harm workers by cutting their hours to avoid insurance; they could instead send them home at 39:45 hours to duck the requirement.

purse strings

In his press conference, McConnell put the Obama administration on notice that Congress will use the budget to put a crimp in its ambitions. “The President does not sign the budget”, he pointed out, and only 51 votes are needed for passage. “It’s reasonable to assume that we will use the power of the purse to push back against this overactive bureaucracy and of course we have a huge example of that in [Kentucky] with the war on coal”. He went on to attack the EPA plan to encourage cap-and-trade as a means to reduce power plant emissions as so unpopular that it couldn’t attract enough votes in Congress even when “our friends on the other side owned the place” with “huge majorities”. So we can expect McConnell and cohort to send Obama’s pollution reduction plans reeling backward.

mandate

The pundits have concluded that the Republican sweep owes more to dissatisfaction with the Obama administration than enthusiasm for the conservatives’ program. Many conservative policies are also deeply, deeply unpopular. Raising the minimum wage stands not a chance of passage, but enjoys landslide backing by the public. In his press conference, Obama pointed out that “in the five states where a minimum wage increase was on the ballot last night, voters went five for five to increase it” — four of them red states. There is strong opposition to approving the Keystone pipeline, which is one of the first things McConnell and Boehner have said they will move on. Even the conservative magazine The Weekly Standard acknowledges programs that “voters aren’t buying“:

The standard GOP establishment tax and budget playbook might also be a rough sell. Establishment Republicans strongly favor comprehensive tax reform, and most current GOP versions of that would raise taxes on many middle- and upper-middle-income families while lowering taxes for those earning $500,000 or more annually.

And, of course, they want to cut Social Security and Medicare. The article continues:

Favoring budget stability and investment by the wealthy over continuation of the old age safety net Americans are familiar with, are unlikely to be shared by voters who already think the economic system is rigged for the rich.

the deluge

McConnell twice alluded to some 360 bills passed by the House but blocked by Harry Reid’s Senate.

“Presidents do have the right to veto, something the President hasn’t had to do. I think he vetoed two little bills in six years. The first two years he loved everything he got, and the last four years the current majority made sure he never got anything he didn’t like…Now he’s going to have a Congress that is going to be more challenging for him”.

The other Kentucky senator, Rand Paul had said, “We will send the President bill after bill until he wearies of it”. He was talking about Obamacare but it could also suggest to cynics a larger, unspoken — equally cynical — Republican plot: to send bill after bill to Obama’s desk over the next two years that the President is sure to veto. “There’s only one Democrat who counts, the President”, said McConnell. “Democrats in Congress will support whatever he wants to do”. So that plan would perpetuate the gridlock and shift all its blame to Democrats, allowing Republicans to make the case in the run-up to 2016 that what’s lacking is a Republican president to work with the Republican Senate and House to finally get America back on track.

Mission Accomplished, China Putting Squeeze on U.S. Companies

The enormous Chinese market is irresistible to American multinational corporations. To gain admittance U.S. companies acceded to whatever demands the Chinese imposed, most in violation of World Trade Organization (WTO)
rules, and willingly handed over their technology to the Chinese with little regard as to what the consequences may be for their own future.

When China was admitted to the WTO in 2001, it was no secret that their huge export imbalance was not enough to satisfy their vaulting ambitions. The further plan was and is to replace foreign companies and imports with local production. Evidently, China under Xi Jinping has decided that time has come. It has decided that American companies have served their purpose, having transferred sufficient of their propriety knowledge and skills to their mandated joint venture partners. Government agencies have launched a campaign of penalties against U.S. corporations for alleged monopolistic practices to make conducting business in China increasingly difficult.

It has always been difficult. As foreseen before China gained membership, the People’s Republic has always skirted WTO rules. The U.S. has had to impose one after another tariff on Chinese imports across the last decade to counter illegal government subsidies to their industries and their pricing manufactures at below cost to destroy competitors (so-called “dumping). “Countervailing” duties designed to offset unfair practices have been imposed on paper, steel, tires, chemicals, solar cells, wind turbines — the list of disputes is long.

China typically devises retaliatory measures, but their latest are of a different order. They have raided our corporate offices in China, pressured executives to admit guilt. Corporate executives are not allowed to bring lawyers to meetings with regulators about monopoly charges. Anti-trust trials often are concluded in a single day.

In response, U.S. companies seem uniformly to have docilely agreed to all demands rather than push back and risk further fines or possible expulsion. One reason is that the Obama administration has failed to utter a word of challenge or offer any support. Quite the contrary: the President invited the Chinese navy to participate for the first time in the 22-nation Pacific Rim naval maneuvers.

A survey by the American Chamber of Commerce in September said this is the “most hostile time since China opened its doors” three decades ago. The country has become “a less welcoming place to do business” said 60% percent of companies surveyed, up from 41% at the end of 2013.

swat tactics

Almost a hundred investigators stormed four Microsoft offices across the country in August; the company is accused of “abusing its dominant market position”. Microsoft had announced in April that it would no longer support the XP version of the Windows operating system, now 13 years old. In retaliation, installation on government computers of the current version, Windows 8, was prohibited, the claim being that the U.S., which China calls “the world’s biggest cyberthief”, would use it for spying. The Chinese have made the same claim against Apple’s iPhone. This appears to be retribution for our indicting five members of the Chinese army for cyber-espionage against the U.S.

China’s supreme hypocrisy is that Microsoft has been more damaged than any other company by the Chinese for their piracy of uncountable millions of copies of Windows.

In 2012 the U.S. lodged a complaint with the WTO alleging that China unfairly subsidized auto-part exports by granting $1 billion in tax breaks and loans to companies provided they export all their product. The upshot has been that half the top 10 auto-part companies were American in 2001; now only two. In return, China is now investigating foreign automakers for whether they forced customers to buy their own makes of expensive replacement parts rather than from independent manufacturers. Companies are meekly cooperating by slashing prices.

The bigger assault is against autos themselves. What they are guilty of is quality. Again out of bounds of WTO rules, foreign automakers were required to enter into joint ventures with local partners and share patents and know-how, but the technology transfers have not worked all that well. The local partners, enjoying the money reaped by their far more popular foreign makes, haven’t moved quickly enough to take over the car industry, so the government has fined Audi and Chrysler for dominating the market, accusing them of “suspected serious violations of discipline and law”, phrasing used typically in corruption cases.

The Chinese view their own makes as shoddy and dangerous, as they do so many made-in-China products. The Wall Street Journal
quoted one woman who said, “Look at infant formula. How can you feel secure driving a Chinese brand car?” The death in 2008 of six babies and the sickening of 300,000 others from baby milk tainted with melamine has caused mothers to go to extremes to get smuggled foreign baby formula. The episode is often cited by wary consumers. And there have been lead-painted toys, sulfurous drywall, tainted heparin blood thinner linked to 81 deaths. There have been food scandals involving cooking oil, eggs, meat. There have been pigs dead of infectious disease but processed nonetheless. It is a nation concerned only for a quick buck with little concern for what might befall their customers.

Walmart’s 408 stores in China have been subjected to a
series of fines over the last three years for what are claimed to be misleading prices and poor quality products. Many of the fines are niggling harassments, such as for English lettering larger than Chinese characters on product labels. The company has obligingly instituted testing of 600 products a day at their distribution centers, even to the level of DNA analysis after finding fox meat labeled as donkey (the latter evidently an accepted protein). That’s because in China it is the retailers who are responsible for the safety and quality of food they did not produce. But Walmart in particular is the target; 2,200-store rival Bright Foods says it hasn’t been fined in years.

Now that western management, securities and accounting practices have been learned, the Big Four American auditing firms have been told they must hand over control to their Chinese partners. Their CEOs must be Chinese within three years, and foreign partners must be scaled down to less than 20% by end-2017.

UPS and Fed Ex have been in China since the 1980s, the market being second only to the U.S., but a law passed in 2009 required all delivery companies to be re-licensed in the regions they serve. Both companies have been waiting for their licenses for many regions ever since; Fed Ex still cannot operate in Beijing. The holdback has enabled Chinese counterpart S.F.Express to more than double in the past two years.

past as prelude

These new tactics were preceded by a long list of disputes. The U.S. had led the way in developing wind turbines and solar panels until China moved swiftly to take over these markets by heavily subsidizing the industries at home. Rapidly overwhelmed, U.S. producers shuttered one after another American plant causing the Obama administration, too little and too late, to file actions with the WTO in 2012 accusing China of dumping product for less than the cost to manufacture and ship.

That same year the U.S., the European Union and Japan had already brought a case against China for hoarding “rare earth” minerals, exotic commodities — 17 in all, essential for everything from iPads to Toyota Priuses, from efficient lighting to smart bombs –95% of which come from China.

outcomes

But the future will tell us that technology transfer did the most damage.

The chieftains of our major corporations would rather not look ahead to what the give-ups will do to their companies in the years to come. So we have General Electric as example signing in 2011 an agreement to share its most sophisticated airplane electronics with a state-owned Chinese company. The avionics it will share extend even to the ultra-high-tech computer system that went into Boeing’s cutting edge 787 Dreamliner, governing the plane’s navigation, communications, cockpit displays and controls.

GE is not alone. “Several other American companies have also been chosen” to help China build an advanced civilian aircraft, the C919, as The New York Times reported. They will provide:

power generators, fuel tanks, hydraulic controls, brakes, tires and other gear. The roster of United States suppliers includes Rockwell Collins, Honeywell, Hamilton Sundstrand, Parker Aerospace, Eaton Corporation and Kidde Aerospace. The Chinese government…had made it clear to Western companies that they should be “willing to share technology and know-how.”

In 2010, China put forth what masqueraded as an anti-monopoly law that requires companies that hope to sell security-related digital products to government agencies — such as routers, smart cards and firewall software — to henceforward turn over data-encryption keys, encryption algorithms, and design specifications.

One has to ask, how much of the transferred technology will migrate to China’s military. But is anyone in our government asking? Technology transfer still goes on.

looking back

Once bound to follow WTO rules, our hands were tied from using trade barriers as a weapon to counter China’s mounting military aggressiveness. We cannot use economic pressures such as the successive waves of sanctions deployed against Russia (which hasn’t qualified for WTO membership). Short of ignoring the treaty’s rules and probably doing great damage to the structure of international trade and to trust in the United States, we would have to invoke the “national security” exception of the WTO rules. The U.S. would then be subject to a ruling by the organization’s panel of international bureaucrats. This is just the sort of straitjacket that causes Republicans to block entry into any treaty that might hamstring America’s freedom of action, although that phobia extends even, incredibly, to the Convention on the Rights of Persons with Disabilities, the treaty joined by 130 countries but not the U.S., even though it is inspired by and based on and our own pioneering Americans with Disabilities Act!

Before admitting China in 2001, no country of any consequence had been admitted to the WTO which had shown hostile intentions toward the U.S. Piracy and counterfeiting of our intellectual and cultural property had been rampant; years of promises were only to hold us at bay while the thievery went on. We approved their WTO membership before they reduced their formidable trade barriers that had held sales of our goods to China to just 2% of our total exports. But the smell of money made us only too eager to sell out.

The Republican Campaign that Kept Democrats from the Polls

If Republicans regain the Senate and increase their majority in the House, that will partly accrue to the dismal ratings of President Obama and his administration. But the other deciding factor is expected to be how many Democrats have been made to give up on voting because of the deliberate attempt to make it difficult.

Republicans have waged a campaign in state after state to enact strict voting laws intended to discourage Democratic groups from voting. For two and a quarter centuries the nation has seen no need for voter identification. That this omission is suddenly in need of an urgent fix betrays an agenda that has nothing to do with what Republicans have been schooled to repeat as the reason — that voter fraud is abroad in the land.

Not a single study bears this out. Voter fraud is so non-existent as to be at the vanishing point. The real fraud is the claim that it is a problem and the refusal to own up to what is obviously prevarication.

Some 34 states have enacted hurdles that make voting more difficult; 30 require some form of identification, 18 of those require photo-IDs. In addition, early voting, Sunday registration, registration and voting on the same day — these conveniences have been shortened or eliminated, predominately affecting blacks, Latinos and the poor, groups that take the greatest advantage of these accommodations and which traditionally vote Democratic. The photo-ID requirement targets these same groups; they are more likely not to have cars and the driver licenses that go with them that satisfy the photo requirement for everyone else. Those same people are more likely to lack the money it costs to muster the documentation needed to prove identity, or to sacrifice pay to travel to some government office to apply for a state ID. In counties where they are populous, blacks and Latinos have seen the number of polling places cut to increase the travel distance and make the waiting lines longer. Out-of-district voting has been eliminated to target students, who typically lean Democrat; they must return home in order to vote. Laws that do not accept even the student IDs issued by state colleges are another way their vote has been stifled. The pretense that this flurry of measures is not meant to trim the Democratic voters is deeply cynical.

It is reasonable in principle that we ought to be able to prove who we are in order to vote. But the right to vote is at the core of a democracy, so making it as easy and cost-free as possible is another reasonable principle. The Republican campaign insists on the first but reverses the second. Millions of Americans don’t know what became of their birth certificates, if they ever had a copy. We each know we exist and if a state requires a birth certificate to prove to itself that we exist, then there is no reason we should have to pay a cent for it. Yet depending on the state, fees charged for going through the process of proving identity can cost as much as $175, which, of course, the poor can ill afford. This is a return of the poll tax; in fact, far orders of magnitude more than the $1.50 poll tax once charged for the right to vote in southern states. The outcome is that hundreds of thousands of citizens are being effectively denied the right to vote.

the big lie

Justin Levitt is a professor at Loyola Law School in Los Angeles who has been tracking allegations of voting fraud since 2000. In the years since, more than a billion votes have been cast, yet he has found only 31 instances in which someone was accused of casting a ballot in someone else’s name. He details them all in this Washington Post piece.

This report from the Brennan Center for Justice tracked down hundreds of fraud claims and found that clerical errors, similar names, matching names crossed with one another, and address changes are the most common reasons for mix ups, not fraud. They found that claims of votes cast by dead people were invariably cast by persons who died at some point after voting. Brennan cites as example claims of irregularities in Ohio that led to a statewide survey of votes cast in 2002 and 2004. Out of 9,078,728 votes, “four instances of ineligible persons voting” were found — a factor of 0.00000044%.

In Texas, there were two convictions for in-person voter impersonation in 10 years during which 20 million votes were cast.

The Bush administration Justice Department reported in 2007 that a five-year review found no proof of attempts to tamper with elections.

There are many pathways for cheating such as forged absentee ballots and voter registrations in fictitious names, but none of these offenses is prevented by photo-IDs. Which should make one suspicious why the Republican campaign did not go after closing those loopholes. The point of their strategy is not to identify people on the voting lines; it is to keep them off the lines in the first place by throwing up the obstacle of having to go to the trouble of obtaining an ID.

In-person voter fraud doesn’t exist for good reason. Impersonation of someone else is an absurdly ineffectual way to try to sway an election. Think it through. How many would have to be paid off to make a difference? Think of the risk of enlisting those stand-ins, with any one of them likely to blow the whistle. How many would be foolish enough to agree to commit a felony that carries a five year prison term and a $10,000 fine — even deportation, if applicable?

Yet the conservative group True the Vote claims that Democratic operatives routinely bus loads of illegal voters to polling places throughout the country. Anyone who believes that needs to undergo a propaganda purge.

supreme court engineering another election

Federal courts in several states struck down portions of the new laws only to have the Supreme Court override their decisions at the last minute, allowing the laws to go forward with the claim that letting the states continue to do as they always have done would be too confusing. Here’s a rundown:

North Carolina: The Voting Rights Act of 1965, amended five times by Congress to expand its protections, was disabled by the Supreme Court last year. The Act required “pre-clearance” by the Justice Department of any changes in voting laws in a number of mostly southern states which had histories of electoral skullduggery. In Shelby County v. Holder the Supreme Court ended pre-clearance, saying the litmus tests of the long ago law no longer fit.

North Carolina had enacted the most sweeping menu of voter restrictions in the country after the complete Republican takeover of the governorship and legislature, followed by the Supreme Court freeing the state from “pre-clearance” of those changes. But the 4th Circuit Court of Appeals struck down a couple of the new law’s provisions: the elimination of same-day registration and out-of-precinct balloting. The first made an unregistered voter make two trips instead of one, the second made students return to mom and dad’s homestead to vote. Both discourage voting.

But that was fine with the Supreme Court which stepped in to reinstate the eliminations.

Ohio: The state cut a week from early voting — the only week which offered same -day registration — and did away with voting in evening hours, Sundays, and the day before the election — actions that took away the rights of county election boards to make their own arrangements. Minorities vote early at twice the rate of whites and on their days off from work, so the intent was clear. But Ohio’s secretary of state inscrutably said the new rules would make it “easy to vote and hard to cheat”.

A lower court reversed these changes, but in came the Supreme Court again to restored the reduced schedule.

Texas:U.S. District Judge Nelva Gonzales Ramos struck down the state’s new voter-ID law in a 143-page decision that said the law constituted an “unconstitutional poll tax” by a legislature that was “motivated because of and not merely in spite of the voter-ID law’s detrimental effects on the African-American and Hispanic electorate”. And on students. The Texas law accepts a concealed handgun license as acceptable identification but not a student ID card. Ramos revealed in her opinion that a Republican state senator had asked the Texas Department of Public Safety to match driver licenses to voter registrations, an exercise that turned up half a million voters who lack this most-used photo-ID. But this data was withheld from the Texas legislature before the vote. Overall, testimony in the suit said that 1.2 million eligible voters lack any photo proof.

A court of appeals stayed Judge Ramos’ decision, letting the new law proceed. The Supreme Court agreed. Ruth Bader Ginsburg wrote a dissent saying that the appeals court had paid no deference at all to Judge Ramos’ “reasoned, record-based judgment” and the “fact-intensive nature of this case”. To her chagrin, neither did Judge Ginsburg’s own court.

Wisconsin: Federal district judge Lynn Adelman in Milwaukee invalidated the state’s voter-ID law in a 90-page opinion saying it violates the Voting Rights Act and that “virtually no voter impersonation occurs in Wisconsin”. But a three-judge panel of the 7th Circuit Court of Appeals overturned.

One of the judges of the 7th Circuit not on that panel was Richard Posner. A year ago he recanted his 2007 opinion that gave the go-ahead to Indiana’s voter-ID law. At the time he believed it would disenfranchise only a few. Too late, he came to realize last fall that voter-ID laws are “now widely regarded as a means of voter suppression rather than of fraud prevention”. In Wisconsin’s case, some 300,000 will have found hindrances to voting. Former Justice John Paul Stevens is another apostate. He voted for Indiana’s photo-ID law when the case came before the Supreme Court, but now says colleagues who dissented were “dead right”.

Posner attempted to get the full 7th to review its panel’s Wisconsin decision, but the full court deadlocked 5-5. He wrote a scathing 30-page dissent that the Los Angeles Times called an “eloquent, incisive and angry” demolition of every argument for voter-ID laws. A “litany of practical obstacles” stand in the path of anyone lacking a driver’s license who hopes to vote in Wisconsin”, Posner wrote. “There is compelling evidence that voter-impersonation fraud is essentially nonexistent” in the state.

Posner is a mostly conservative Reagan appointee regarded as the most influential judge on the federal bench, so the Supreme Court may have taken notice of what he had to say. In this one instance, the high court set aside the 7th’s panel decision and let Judge Adelman’s Milwaukee ruling stand.

deniers beat on against the current

But op-ed writers at the Wall Street Journal won’t concede to dishonesty. In April a senior attorney from Judicial Watch, a self-admitting conservative foundation, searched about and found a faulty study by students at Arizona State as something to pick apart as proof that studies showing voter fraud to be bogus are wrong. The writer went on to say that the minuscule number of criminal proceedings are no guide because “convictions are a fraction of prosecutions, which are a fraction of investigations, which are a fraction of known offenses , which are a fraction of committed crimes”. In other words, there must be plenty of voter fraud out there. We just don’t see it.

More recently a Journal op-ed by Edwin Meese, Reagan’s attorney general under Reagan, and J. Kenneth Blackwell, a former Ohio secretary of state, castigated current Attorney General Eric Holder for his “pernicious…demonizing of state attempts to ensure honest elections” by, presumably, Holder applying the law — Section 2 of the Voting Rights Act against discrimination. The writers also tell us that by some mysterious alchemy the new laws actually increase voter turnout. And they would “like to say something that might strike some as obvious. Those who oppose voter-ID laws and other election-integrity reforms are intent on making it easier to commit vote fraud. That conclusion is inescapable”.