Archive for July, 2014

Operation Choke Point

Cato event held earlier this month with Rep. Darrell Issa (R-Calif.) and Cato senior fellow Mark Calabria. Here’s the description:

Launched in early 2013, “Operation Choke Point” is a joint effort by the Department of Justice (DOJ) and the bank regulators to limit access to the bank payments system by various businesses. Initially targeted at small-dollar nonbank lenders, Choke Point has grown to cover a variety of legitimate, legal businesses that just happen to be unpopular with DOJ, such as gun dealers and porn stars. Initial responses from DOJ claimed such efforts were limited to illegal businesses committing fraud. A recent report by the U.S. House Committee on Oversight and Government Reform reveals DOJ’s claims to be false. In today’s economy, almost any economic activity depends on access to the payments system; allowing DOJ, without trial or a right to appeal, to arbitrarily limit access represents an almost unprecedented abuse of power.

Earlier here. More: House hearing; Funnell.

Special consideration at Texas Law?

“Some of the least-qualified graduates of the University of Texas School of Law in recent years have high-level connections in the Legislature, which may explain how they got into the prestigious law school in the first place.” [Jon Cassidy, Watchdog] Five years ago, the University of Illinois was hit with a damaging scandal over the admission of less-qualified applicants at the behest of the politically connected.

DoJ sues Pennsylvania over trooper fitness tests

The tests “disproportionately screened out female applicants, resulting in a disparate impact against those applicants.” Officers who are highly fit have more options in a situation where force is required — subduing a suspect without resort to a gun, for example. Still, courts have often gone along with demands to weaken tests and standards. [DoJ press release] More: TV and Treadmills (FBI uses higher standards than the ones DoJ is suing over).

Banking and finance roundup

Can the forfeiture train be slowed?

In Philadelphia, the city has seized a widow’s home and car for forfeiture after her son was nabbed on charges of selling pot [Inquirer] “Minneapolis police plan to keep $200,000 seized in a raid of a tobacco shop, even though they didn’t find any evidence to merit criminal charges. Meanwhile, a former Michigan town police chief awaits trial on embezzlement and racketeering charges for allegedly using drug forfeiture money to buy pot, prostitutes and a tanning bed for his wife.” [Radley Balko] Nebraska cops seize nearly $50,000 from a Wisconsin man driving from Colorado, “a known source state for marijuana,” but a court orders it returned [same]. Connecticut police use forfeiture proceeds “to buy new police dogs, undercover vehicles, technology, fitness equipment — and to pay for travel to events around the country.” [New Haven Register]

More: Half-forgotten history of how the feds pushed the states to embrace forfeiture [Eapen Thampy, Forfeiture Reform] And for once good news: “Rand Paul introduces bill to reform civil asset forfeiture” [Balko again] And: Rep. Tim Walberg introduces a bill on the House side; video of Heritage panel today with Balko, Walberg and IJ’s Scott Bullock, Andrew Kloster of Heritage moderating.

ObamaCare and Congressional (non)-intent

Last week, when two federal circuit courts of appeals came out on the same day with conflicting opinions on whether to enforce the literal language of the Affordable Care Act bestowing tax credits only on users of state-established exchanges, some journalists (at, e.g., Vox) took the line that the omission in the statutory language had been a mere drafting error not reflecting anyone’s intent. In subsequent days it was revealed that ObamaCare architect Jonathan Gruber had delivered remarks on multiple 2012 occasions suggesting that the lack of subsidies for federally sponsored exchanges served the function (as critics had contended it did) of politically punishing states that refuse to set up exchanges. Complicating further the question of intent, however, Daniel Fisher at Forbes writes of a Republican Senate staffer who did expect federal exchange enrollees to get tax credits.

Even if we accept the “drafting error” rather than the “pressure the states” explanation of the ACA’s language, it’s worth noting that after major legislation Congress ordinarily comes back to pass a fix-it bill to clean up drafting errors. [More: Tyler Cowen] That’s a lot less likely to happen when the landmark bill is forced through in half-finished form against a unanimous opposition party because going to conference committee would have required negotiating.

I well remember the pride displayed in some quarters about having forced a health care bill through against Republicans’ resistance, even though it was common knowledge that the bill’s details were not in anything like a finished state. I suppose the plan was to rely on a combination of creative executive interpretation and, where needed, judicial mulligans of the sort the Fourth Circuit just agreed to provide.

July 29 roundup