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March 2008
A de facto ‘Central Bank of the United States’
The Atlanta Journal-Constitution
When the Federal Reserve Bank (“The Fed”) was set up nearly a century ago, it was not and was not intended to be a “Central Bank of the United States,” in the sense that many other countries, in Europe and elsewhere, have one, central bank to implement government policy and directly regulate the economy. I have noted, however, in recent articles describing how the Fed has stepped in to “save” us from the “mortgage crisis” that the Fed is more and more referred to simply as the “central bank.”
Interesting. And, of course as we all know, none of us as mere citizens have any say whatsoever in what the Fed does or who runs it. The “Governors” of the Fed are appointed, as is the Chairman; none are elected by or accountable to the people. The Fed is greatly increasing its power not just over banks and interest rates, but investment houses, securities firms, and all manner of financial entities; and not a single voter elected any of its members, and there is absolutely no way we can change them or the course they chart, if we wanted to.
Real ID Act heroes
The Atlanta Journal-Constitution
Only three states — Maine, New Hampshire and South Carolina — continue to hold out against the pressure and threats by the federal government as it tries to force 100% of the states to comply with the Real ID Act. These three states are true heroes.
The Real ID Act for the first time in our history establishes a national identification card, by forcing the states to create and issue only driver’s license meeting precise federal standards, and linking all state databases together for the federal government to access. A number of states have objected to the cost and inconvenience posed by the program (every person wishing to have a driver’s license under the Real ID Act would have to apply for a new one), and to the privacy-invasive nature of the process; but only these three states have refused to comply or to beg the federal government for an extension.
The Department of Homeland Security is threatening that no citizen of any state refusing to comply or which has not begged for extra time, will be able to use their current driver’s license for any “federal purpose,” such as airport security or access to a federal courthouse or Social Security or Veterans Affairs office.
At least there are governors in three states (plus Montana, whose governor refused to comply, but who was granted an extension anyway), who still possess backbone and an understanding of federalism. They deserve our support.
Every bank transaction triggers snooping
The Atlanta Journal-Constitution
I am not an Eliot Spitzer fan. The now-former New York governor and I have disagreed privately and publicly on any number of issues, mostly involving questions of prosecutorial abuse. Still, I have great concern with the manner in which his fall from grace was orchestrated, and with the federal laws and regulations on which it was based. The sad saga of Spitzer should concern every American, or at least all those who maintain accounts at any financial institution or who engage in any form of electronic financial transactions.
The web of snooping in which federal investigators and regulators are now able to ensnare any person who engages in any form of financial transaction has become so complex and pervasive that almost no person anywhere in the world can escape its clutches. The ability of the government to manipulate this vast power is magnified many fold by virtue of the manner in which our laws and regulations require the active complicity of the entire cadre of persons working in, or in some manner connected with, banks and other entities that provide or facilitate financial transactions.
The seeds of this modern-day Orwellian financial web were sown in the late 1960s and early 1970s when such expansive federal laws as the Bank Secrecy Act were enacted with bipartisan support. Designed as tools to ferret out organized crime figures, major drug traffickers and international money launderers, this family of far-reaching regulatory-cum-criminal laws initially was used largely as intended. During this era also, many of the “Suspicious Activity Reports” (or SARs) required by the Bank Secrecy Act of 1970, for example, were largely ignored by investigators and prosecutors, who viewed them as burdensome and difficult to catalog and utilize. Bank employees were not pressured to file such reports as an operative component of their job descriptions.
Two events have conspired to change all that. First, the advent of digital technology has elevated dramatically the ability of the government to gather, analyze, manipulate, retrieve and disseminate the SAR data. In the digital age, there are virtually no limits on the ability of agents to use high-speed computers to identify, correlate and retrieve the data in ways limited only by imagination.
The second factor changing the power of using SARs and the reporting requirements in the sister “Currency Transaction Report” (CTRs) and other federal reporting instruments, was, of course, the events of 9/11 and the ensuing USA Patriot Act. These two things institutionalized fear as the driving force in virtually all federal policies, including those relating to financial reporting.
Now, these and other federal reporting forms must by law be filed whenever any person — terrorist, criminal or simply law-abiding student, housewife or lawyer — engages in a broadly defined “financial transaction” at an equally broadly defined “financial institution.” The SAR, for example, is triggered whenever someone in the employ of, or connected with, that institution concludes there is something “suspicious” about a transaction (either alone or in conjunction with other, perhaps nonsuspicious, activities). If the suspicions of the employee are aroused while the customer is engaged in the questionable transaction, then the law requires that the act be reported immediately.
Lest a banking customer take solace in the belief that “surely the government would not concern itself with small transactions,” be reminded that “suspicious” transactions as small as $2,000 must be reported.
Any suspicion by a bank employee, for example, that a transaction is intended to violate or evade any federal law or any federal regulation (of which there are tens of thousands on the books) could prompt a report. Reportable suspicions clearly need have nothing to do with suspected terrorist activities or even suspected violations of federal felonies.
Ignorance is bliss — the law prohibits financial institutions from notifying anyone that a “suspicious activity” has been reported to Uncle Sam.
Oh, by the way, if you think you’re safe from the prying electronic eyes of the federal government and all those employees of financial institutions spying on its behalf if you can somehow manage to keep all your banking transactions under $2,000, forget it. Another federal law — this one in the Patriot Act — has been interpreted by banking examiners to require banks to profile their customers and the full range of their transactions, regardless of amount. These “know your customer” regulations are among the most insidious of this entire class of invasive federal laws and regulations.
Supreme Court hopefully will strike D.C. gun ban
The Atlanta Journal-Constitution
Last week, the U. S. Supreme heard oral arguments in a case that last year found the 32-year gun ban in the District of Columbia unconstitutional. Despite the fact that the Second Amendment’s guarantee of the ‘right to keep and bear arms’ has been a part of our Constitution for 217 years and has given rise to innumerable court cases during those many decades, this is the very first time the High Court has directly confronted the meaning and scope of the Amendment.
The lower, federal appeals court found the Amendment does guarantee the right of an individual person to possess a firearm, and that the Washington, D.C. ban on handguns amounted to an impermissibly restrictive limitation of that right. While most Members of the U.S. House and Senate joined in briefs to the Supreme Court asking it to agree with the appeals court on both findings, the Bush Administration strangely asked the Supreme Court justices to send the decision back to the lower court to reconsider precisely how the D. C. ban should be interpreted. The Bush Justice Department took this disappointing stance because it feared a precedent that might make it more difficult for it and future administrations to enforce the wide range of existing federal gun laws.
Despite this waffling by the Administration (with which even Vice President Cheney disagreed on the record), it appears the Court will likely find D.C.gun ban, which disarms the citizenry in one of the country’s most violence-prone cities, unconstitutional because it effectively abrogates an individual’s right to own a firearm for self-defense. If the Court does not do so, we’ll have the Bush Administration to thank.
‘Terrorist’ watch list approaches 1 million names
The Atlanta Journal-Constitution
The federal government’s main “terrorist” watch list continues to increase dramatically in size. According to a recent independent analysis, over 900,000 names currently are on the list, which at its current rate of growth will exceed 1,000,000 names by early summer 2008. Although the Transportation Security Administration (TSA), the federal agency that maintains the watch list, says the actual size of the list is much smaller — only several hundred thousand discrete names — because of aliases and duplicate information, by any reasonable standard the list is excessively large. And, the government’s explanation is troublesome for a number of reasons. For example, if there are so many aliases and duplications on the list, does this not raise legitimate questions about the basic integrity and accuracy of the watch list?
A further problem is that if a person’s name lands on the list, it is almost impossible to get it removed, or to discover whether the information is accurate or faulty. It’s all done — of course — in secret.
Wary eye on South America
The Atlanta Journal-Constitution
Iraq and Afghanistan continue to enjoy top billing in America’s newspapers and on our television news programs. With untold billions of dollars flowing regularly into that part of the world and American soldiers continuing to be killed there, it’s no surprise our government and our media pay close attention. South America remains an afterthought for government policy-makers and news show producers. Whether we like it or not, that may soon change, as well it should.
Military tensions between Venezuela and Colombia, for example, flared earlier this month to a new and dangerous level when Venezuelan president and strongman Hugo Chavez massed armed forces at his country’s border with Colombia and threatened military action. This saber rattling, Chavez said, was in response to Colombian President Alvaro Uribe ordering a small military force into its western neighbor, Ecuador, to track down and kill a Colombian guerrilla leader operating from what had been the safe haven of a neighboring country (and who reportedly maintained contacts with Chavez).
While the outward signs of hostility have cooled (the two leaders exchanged a formalistic handshake at a recent meeting), such disruptions in this part of the world —- where the United States maintains significant, if often forgotten, interests —- ought to concern all Americans (especially those who drive cars).
Although the publicly stated reasons for the tensions between the Colombian and Venezuelan leaders relate to Colombia’s efforts to eradicate the leftist guerrilla threat that has plagued the country for decades, most observers know it is Colombia’s openly pro-U.S. stance that really rankles Chavez. The entire South American continent has long chafed under the benign neglect of one U.S. administration after another. Chavez has proven quite adept at drawing on that deep resentment to bolster his own position. His ability to wield influence in this manner, of course, is strengthened greatly by virtue of the fact that Venezuela sits atop major oil reserves and provides nearly 13 percent of our country’s daily oil imports (more than three times the amount of oil we import from Iraq).
Economic realities such as this should cause the United States to pay closer attention not only to Venezuela and other Andean countries such as Peru, Bolivia and Chile, but to the entire South American continent, which collectively is a massive trading partner for the United States. Not only oil, but huge quantities of raw materials and consumer products (coffee, for example) are offloaded daily at U.S. seaports and airports from ships and planes arriving from South America. American taxpayers, too, have a stake in what happens in this region. Billions in foreign aid flow into the region. On the darker side of the trade ledger, cocaine, marijuana and heroin from South and Central America fuel the appetites of drug users in American cities.
Yet for many in Washington, dealing with South American leaders and governments remains at best a necessity, and more often an irritant. Dealing with Venezuelan President Chavez has proved especially vexing for Washington. Many in our nation’s capitol view him as a comical figure, but in so doing fail to comprehend him or the culture from which he springs. Many of our leaders also do not understand Colombia’s president; refusing, for example, to acknowledge the risks Uribe has taken to assist the United States. Falling prey to such oversimplification and misunderstanding is not only wrong but also obscures whatever chances there are for improving our long-term economic, political and security interests in the hemisphere.
While Washington’s current national security worldview remains focused like a laser beam on Iraq and Afghanistan, fires smolder and burn elsewhere. Shifting at least a portion of that concern and those resources to South America, and especially to the Andean region that currently is near the boiling point, is critical to our security. There may not be weapons of mass destruction lurking in the jungles of Venezuela, Colombia or Ecuador (there weren’t in Iraq either, of course), but arms are flowing into the area. Venezuela, for example, is buying billions of dollars worth of Russian military equipment. Leftist guerrillas and narco-terrorists remain firmly entrenched in the region, and evidence that other terrorist groups are using the area for problematic purposes is mounting.
Even if the possible loss of a significant portion of our imported oil requirement does not wake the United States from the somnambulant manner in which it views Latin America, perhaps the growing security threat in that area will —- hopefully before a major crisis jars us awake.
Loaned cars to be seized?
The Atlanta Journal-Constitution
If pending legislation is signed by Georgia Gov. Sonny Perdue, automobile owners in the Peach State may soon run the risk of having their cars seized by the government if they let the wrong person drive them. In yet another example of the state government over-reacting to the problem of illegal immigration, the Georgia House recently passed by a wide margin legislation that would empower the government to seize and forfeit any motor vehicle being driven by a person not lawfully in the country. The Senate is poised now to take it up.
While this expansion of the state’s asset forfeiture laws may have surface appeal since it purports to punish illegal aliens, the real victims will be law-abiding citizens who simply lend their vehicles to someone who either may them self have an immigration problem with the feds, or who might happen to then let someone in such a situation use the car to run to the drug store.
If this legislation were to become law, perhaps a car owner would be well-advised to ask to see a person’s birth certificate or immigration papers; of course, with so many technical reasons why an immigrant’s paperwork might be in violation of some law or regulation, even reviewing their papers might not shield the car owner from losing their vehicle. Probably better to loan your car only to those who can prove they are bona fide, native born citizens of the United States of America.
Spitzer investigation should raise concerns for all Bank Customers
The Atlanta Journal-Constitution
I am not particularly a fan of soon-to-be-ex New York Governor Eliot Spitzer; nor do I comment at this point on his guilt or innocence. However, the manner in which he was investigated, wiretapped, and then targeted for further investigation should concern every American who maintains one or more bank accounts. As the Spitzer story has unfolded, it appears that because he transferred his own monies in his own bank accounts for his own purposes, but in a manner that raised suspicions of bank employees and might have run afoul of the complex web of reporting requirements that now overlay and enwrap all banks and financial transactions, his personal money transfers were reported to the IRS, and his phone conversations then surreptitiously monitored by government agents.
One day you’re simply transferring some funds from one account to another, or wiring some money to someone overseas; the next day, you’re being investigated and your calls monitored.
Cast wary eye on surveillance efforts
The Atlanta Journal-Constitution
It’s become a cottage industry —- scaring the bejesus out of the citizenry in an effort to push U.S. House members into following the example of their Senate counterparts and pass legislation giving the administration legal authority to secretly surveil phone calls and e-mails of U.S. citizens in this country without court approval.
Surveillance advocates from President Bush on down are disingenuously mischaracterizing the law —- and the already vast power of the government to gather intelligence information electronically —- in order to gain the votes needed to send such legislation to the president for signature.
To set the record straight, here are some key points concerning the surveillance powers of government —- current and desired:
Q. Despite the fact that the House has not yet caved to the president and the Senate and permanently expanded the power of the government to surreptitiously surveil Americans’ international calls and e-mails, is our government still able to conduct necessary foreign intelligence surveillance?
A. Yes. The sky has not fallen and will not fall. The government has had and continues to have robust power and lawful authority to monitor calls and e-mails of known or suspected terrorists.
Q. As an American citizen within the United States, aren’t my calls and e-mails protected against the government listening in, unless the government suspects me of unlawful activity, including working with or communicating with terrorists?
A. Such calls should be, and are, protected against warrantless surveillance by the 30-year-old Foreign Intelligence Surveillance Act. However, under the “Protect America Act,” in effect from August 2007 until the middle of February of this year, the government was given vastly expanded power to listen in to any of your calls or e-mails, so long as a government official “reasonably believed” one party was outside the United States. In other words, any call you made with or e-mail you sent to, someone in another country —- a friend, a relative, a business associate or anyone else —- could be monitored by the government without any suspicion you were doing something wrong or that you were conspiring with a member of al-Qaida.
Q. Is the government listening in on my calls regardless?
A. Probably. Even though FISA requires the government to first get a court order to listen in to your calls, this administration claims it has the inherent right to ignore the law and eavesdrop on Americans’ calls anyway.
Q. Don’t we want the government to be able to listen in to calls if a terrorist overseas is talking to someone in this country?
A. Of course; and the government can already do that.
Q. Why should people overseas have the same protections against the government monitoring their conversations as U.S. citizens inside the United States?
A. They don’t, and they shouldn’t have. This is one of the big lies the administration is pushing. Protections against warrantless surveillance that properly extend to Americans within the United States do not extend to persons overseas. In other words, the government can listen in to conversations taking place outside the U.S., regardless of whether the House adopts the same expansive legislation already passed by the Senate.
Q. But wasn’t there a problem with a secret court decision last year restricting the government’s ability to listen in to persons overseas?
A. Yes, and that problem should be addressed legislatively. Calls between two persons not in the U.S. that happen to be routed through a switching station inside the United States should not be subject to the warrant requirements of FISA just because they were routed thusly. However, that problem can be resolved very easily by a specific and limited change to FISA —- a change that does not require the vast expansion of surveillance powers sought by the administration.
Q. What about this question of granting telecommunications companies immunity for disclosing their customers’ private calling information to the government without proper authority?
A. Companies, just like individuals, should not violate the law, regardless of their motivation. Legislation allowing companies to violate the law just because a government official asks them to would set a terrible precedent we would come to regret mightily.
Q. Finally, are those House members who are raising questions about the expanded powers the administration is seeking doing so for partisan reasons?
A. No. The objections they have raised are principled and reflect important, nonpartisan values: respect for the Fourth Amendment, limits on executive-branch power and fundamental privacy concerns.
California city nixes swearing
The Atlanta Journal-Constitution
The City of South Pasadena, California, just outside Los Angeles, proclaimed the first week in March “No Cussing Week.” While the city stopped short of making the utterance of swear words actually unlawful, California being, well, California, it’s probably only a matter of time before South Pasadena or some other city in the Golden State, decides to go all the way and try to make it a criminal offense to use disfavored words in public.
Republican Gov. Arnold Schwarzenegger, who rarely meets legislation restricting behavior he doesn’t like, may urge the state legislature to pass a statewide ban. I guess the phrase, “Free Speech be Damned,” would be illegal.
‘Fat’ monitors at Georgia schools?
The Atlanta Journal-Constitution
A recent study evaluating the degree to which students have knowledge of U.S. history, found that high school graduates entering college earned a failing grade. Not to worry, however — in Georgia at least, state legislators have decided that the most important thing they can do for students is to require that schools track students’ “body mass index” (BMI). The Georgia Senate, under Republican control, recently passed a bill that, beginning in public elementary schools, students periodically would have their height and weight measured and recorded, and posted in the aggregate so parents could tell which schools have more fat children than other schools. If parents desire to find out the BMI of their own children attending a school, they would be able to find out privately.
One wonders, of course, why parents could not simply weigh their kids at home, but perhaps that would require more parental control than some parents could assert. More important, Georgia citizens also should question what responsibility of the schools it is to weigh children, especially given that Georgia schools consistently rank at or near the bottom of the national scholastic scales. Apparently, state legislators will rest easier knowing that our students may not be very smart, but at least they may not be as fat as previously.
Big Brother endorses these playthings
The Atlanta Journal-Constitution
Two years ago in this column, I lamented the fact that toy manufacturers were cashing in on society’s headlong rush toward constant and ubiquitous surveillance.
I highlighted a Lego construction set that included, as part of a police 18-wheeler, a surveillance and monitoring unit. I also noted a plastic “play set,” manufactured and marketed by Playmobil, depicting a police officer wanding a civilian figure as pretend belongings go through a pretend X-ray machine. This trend toward “play” search and surveillance has continued, and now includes a functioning toy metal detector.
Wizard Industries Inc. recently heralded the latest children’s toy — as an “educational aid” — designed expressly to make surveillance security “fun.” The company’s press release announcing its “Scan-It Toy X-Ray Machine” reveals much about the direction in which our society is moving.
The company takes great pains to explain that the functioning kiddie metal-detecting machine is not the product of some impersonal research department but rather the product of the imaginative mind of a “mother of three” — Kathy Arena. It seems Arena was going though what apparently was a not-so-happy divorce several years ago that required her and her children to pass through security checkpoints at the courthouse. We learn that they were “intimidated” by the courthouse security.
The fear of the courthouse security scanner apparently rested heavy on Rena’s psyche after the divorce. This intrepid divorcee decided the best way to meet the challenge presented by the distress was to invent a toy to teach other children that transiting a security checkpoint can be fun. Untold numbers of children yet unborn could easily avoid similar trauma by having their parents or guardians shell out $59.95 for a toy metal-detecting machine, and then practice the drill of being subjected to government searches in the comfortable surroundings of their own playroom.
Apparently Arena is quite a philosopher. The description of her epiphany from trembling at the sight of a security checkpoint to embracing such intrusive devices, notes that she realized that knowledge dispels ignorance, which in turn reduces fear. Thus, in a flash of brilliance that would make Plato sit up and take notice, Arena concluded that fear of having the government invade one’s personal privacy was simply the result of ignorance. Arena and Wizard Industries may be on to something here that could make them rich, and at the same time tear down the wall of fear and distrust that has infected our view of certain ongoing government activities. The Wizard-Arena team could develop and market a whole series of post-9/11 toys:
A miniature waterboarding play set, designed to teach kids that pouring water down someone’s nose while he’s strapped to a table is not “torture,” but actually fun.
Decks of playing cards to teach youngsters how to recognize “enemy combatants” and deny them their civil liberties, a process that also can be loads of fun.
Make-believe surveillance devices to intercept and record phone calls and e-mail messages for no reason at all, just like their government does.
Pretend national identification cards that must be shown if their playmates wish to visit their homes for sleep-overs, just like their parents will have to show when the Real ID Act goes into full force and effect.
Self-sticking, fake radio frequency identification chips just like the ones the government is putting in passports and other items.
When I was a kid, my favorite toys were a football, a Davy Crockett coonskin cap, and a Red Ryder BB gun. How times have changed.
States now criminalizing cell phone, texting in cars
The Atlanta Journal-Constitution
New Jersey, which four years ago became one of the first states to pass a law making it unlawful for a driver to talk on a hand-held cell phone while driving, has now moved to the next level. The “Garden State” has given police the power to stop a driver if he or she is using a cell phone or a hand-held communication device to send a text message. The police no longer need to have some other, legitimate reason to stop a driver (such as driving dangerously) in order to cite him or her for “improper” cell phone use. All the police officer now needs is to see you using that communication device while driving, and Bam! you get pulled over, ticketed and fined.
The new law magnanimously allows a driver to use the cell phone for an emergency, but anything short of that will subject him or her to a citation if caught.
For Nanny States like New Jersey and the few other states that have done this, the fact that it is already unlawful to drive dangerously or cause an accident if you drive negligently — for whatever reason, including using a cell phone and being thus distracted — is not relevant. The goal is to criminalize — and double-criminalize — more and more behavior, in order to control the citizenry and oh yes, by the way, bring in more revenue for the state.
Isn’t it great to live in a free country?
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