First Amendment and Lobbying

A Public Service Announcement for New York Times’ Editors

To The New York Times, the “rule of law” is a strange concept that warrants scare quotes. Back in the day, the big media companies were more familiar with the underpinnings of the American Republic and its free-market system.

Here’s a public service announcement broadcast by CBS Radio during the May 14, 1949 episode of “Phillip Marlowe” called “The Promise to Play.”

A man who knows something about cars makes a better driver than a man who’s completely blank about what’s underneath the hood. And in the same way, a man who knows something about our American economic system is able to be a better citizen than a man who hasn’t any idea at all about what makes the wheels go around. Understanding our system of mass production enables one to feel renewed pride in the high standard of living this kind of production has helped provide. And it’s understanding, too, that enables us o work at some at our system’s defects – like sharp ups and downs in prices and jobs.  So read, study, listen – and with all of us working together, we can increase our productivity still further and provide for even wider distribution of benefits.

The audio clip is here. The full episode is available at Archive.org.

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What is This Rule of Law of Which You Speak?

The conservative blogosphere had a good time this weekend kicking around Kate Zernicke and her New York Times story on the Tea Party movement, which she determined is motivated by strange, antiquated concepts like the “rule of law” and obscure thinkers like Friedrich Hayek and Frédéric Bastiat. From “Movement of the Moment Looks to Long-Ago Texts,” her most telling paragraph:

Representative Paul D. Ryan, Republican of Wisconsin, alluded to “The Road to Serfdom” in introducing his economic “Roadmap for America’s Future,” which many other Republicans have embraced. Ron Johnson, who entered politics through a Tea Party meeting and is now the Republican nominee for Senate in Wisconsin, asserted that the $20 billion escrow fund that the Obama administration forced BP to set up to pay damages from the Gulf of Mexico oil spill circumvented “the rule of law,” Hayek’s term for the unwritten code that prohibits the government from interfering with the pursuit of “personal ends and desires.”

As Jonah Goldberg points out, the “rule of law” is not an exclusively conservative concept:

Everything about this is hilarious. The rule of law is an “unwritten code”? Really? I thought the rule of law was the code. The rule of law is not “Hayek’s term” (it’s A.V. Dicey’s). But the idea stretches back to the earliest days of Western civilization. So on the one hand Hayek is obscure, but on the other hand he’s eclipsed Aristotle, Locke, Montesquieu, and the gang. Way to go Hayek!

And as Ted Frank points out at Point of Law, “How soon they forget Scott Horton or Dahlia Lithwick or Tom Geoghegan or Philip Heymann or many others criticizing the Bush administration over its supposed disregard for the ‘rule of law.’”

Where were Zernicke’s editors, anyway? Were they unfamiliar with the concept, as well?

The rule of law is an existential matter for U.S. business and manufacturers. If the government can penalize and persecute one company because it owners have criticized elected officials or the company makes a product that has fallen out of political favor, then investors will find more predictable, more “free” places to put their money.

By the way,  Hayek’s “Road to Serfdom” is ranked 56th on Amazon.com, Glenn Reynolds notes.  The cartoon version is a quick read.

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DISCLOSE Act Fails to Achieve Cloture, 59-39

The roll call vote is here.

Today’s debate, or what passed for debate, was short. Sen. Robert Bennett (R-UT) made a statement noting that the bill had never had a hearing or been considered for amendment.

Senate Republican Leader Mitch McConnell again pointed out the disconnect between supporters’ political priorities and those of the public.

Now, our friends on the other side would have the public believe that this bill is about transparency. It’s not.

Here’s a bill that was drafted behind closed doors without hearings, without testimony, and without any markups. A bill that picks and chooses who gets the right to engage in the political process and who doesn’t. A bill that seeks, in other words, to achieve an un-level playing field. A bill that’s back on the floor for no other reason than the fact that our friends on the other side have declared this week “politics-only” week in the U.S. Senate.

Sen. Charles Schumer (D-NY), the sponsor, concluded with an offer to make it a more acceptable bill by delaying the effective date until after the election.
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DISCLOSE: Don’t Limit Advocacy, Just Be a Better Advocate!

The Senate has scheduled a cloture vote on a motion to proceed to S. 3628, the DISCLOSE Act, at 2:15 p.m. (Procedural details.) You’ll remember that Senate Majority Leader Harry Reid voted no the last time the Senate debated cloture on the bill, which allows him to make a motion to reconsider it.

Jacob Sullum at Reason has a good column on the politics of the issue, “Ad Rage,” challenging the latest line of partisan argument that corporate campaign spending has already overwhelmed the public debate this election season. Sullum concludes by referring to President Obama’s last weekly address, in which the President choose to condemn campaign advertising rather than issues the public considers more pressing, that is, the economy and jobs.

Toward the end of his speech on Saturday, Obama accidentally told the truth. “You can make sure that the tens of millions of dollars spent on misleading ads do not drown out your voice,” he said. ”Because no matter how many ads they run—no matter how many elections they try to buy—the power to determine the fate of this country doesn’t lie in their hands. It lies in yours.”

Exactly right, Mr. President. No matter how shadowy or flush with corporate dollars an interest group is, the only thing Citizens United allowed it to do is speak. Advocacy has no impact unless it persuades people. So why not talk about the issues instead of impugning the motives of people who take a different position on them than you do?

In July, the National Association of Manufacturers sent a “Key Vote” letter to the Senate opposing S. 3628, the DISCLOSE Act, and related procedural votes.
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Misrepresenting the DISCLOSE Act, Yet Again

Several Senators — we’ve heard Sen. Ben Cardin (D-MD) and Sen. Sheldon Whitehouse (D-RI) — have taken to the Senate floor today in anticipation of tomorrow’s vote on the DISCLOSE Act.  Sen. Whitehouse is being especially extreme in his attacks, calling the Supreme Court a “radical group,” making accusations about “corruption” and money laundering, and now claiming that the court has “opened the floodgates to foreign corporations” to “drown out American voters” and buy elections.

Not true.

Sean Parnell at the Center for Competitive Politics has been watching the Senate speeches, too, and given his detailed knowledge of the legislation and the politics involved, we’ll allow him to correct the falsehoods.

Listening to them speak, it’s become even more clear than ever that not only are the Senate advocates of the DISCLOSE Act wrong (a subjective opinion, of course, although one we can amply defend) but they are almost completely ignorant of what this legislation would do, what current law on the subject is, and what the court ruled in Citizens United.

All of the things being said that are simply factually incorrect, at least all that I heard, have been covered by us here at CCP repeatedly in the past. The plainly false statements include:

This is just a brief sampling of the transparently inaccurate statements made by Democratic Senators on the floor so far today regarding the DISCLOSE Act, and doesn’t even begin to address things like the claim that a bill that prohibits more than half the largest companies in the country from speaking without limiting a single union somehow represents a fair and even-handed treatment of the business and labor communities.

What’s so astonishing is that the Senate supporters of the bill believe (or claim to believe) that the American public wants Congress to act on this legislation, supposed campaign finance reform that is really an attack on the First Amendment.

We believe the public would prefer to see the Senate consider measures to strengthen the economy, keep tax rates under control, and improve U.S. competitiveness.

Note — 4:30 p.m. corrected the state designation for Sen. Whitehouse.

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No Time for Vote on Tax Rates, but to Restrict Political Speech, Sure!

UPDATE (11:30 a.m.): The National Association of Manufacturers this morning against sent our “Key Vote” letter opposing
S. 3628, the DISCLOSE Act, to the U.S. Senate. The letter was initially distributed in July with the first Senate vote on the bill. …

The Hill, “Dems plan last-ditch vote on Disclose Act“:

Democrats plan to rally their troops for the final stretch of the campaign season by bringing up a campaign-finance transparency bill.

A spokesman for Senate Majority Leader Harry Reid (D-Nevada) on Tuesday announced plans for a last-ditch vote on the measure, dubbed the Disclose Act. A vote on the bill is expected Thursday.

Politico, Ben Smith writing on Tuesday, “DISCLOSE vote will wait for high-dollar fundraiser

Senate Majority Leader Harry Reid just scheduled a vote on the DISCLOSE Act, which would force donors to publish their involvement in political ad campaigns, for Thursday.

Why not tomorrow [Wednesday], you might ask? Because there are no votes in the Senate scheduled for tomorrow. And that may be, in part, because there’s something else going on tomorrow: A big New York fundraiser for the Senate Democrats.

“I would be honored if you would join me for a very special reception with President Barack Obama on Wednesday, September 22, 2010 in New York. We have a limited numbers of tickets available to our general reception. If you would like to join us, please contact …[redacted]@dscc.org.”

Surprised the vote wasn’t scheduled as part of the Defense authorization debate.
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DISCLOSE Act, an Update

Could there be a last minute push in the Senate to pass the DISCLOSE Act, legislation that attempts to limit political speech in violation of the First Amendment? Well, the President did make the bill the topic of his weekly address Saturday, a odd choice when  the salient economic and political issue is jobs.

As Ben Smith of Politico reported, “Grumble of the day: Campaign finance?!:

This week’s address attacked the Citizens United ruling, an question of campaign finance, Constitutional law, and, above all, process. The White House and some of its allies view the issue as a way of getting at the supposed Republican allegiance to big corporations. But the skepticism that this issue cuts through — at a time of overwhelming economic focus — is pretty widespread, and the decision to use any platform to talk about anything other than the economy is drawing quiet grumbles from Democrats.

“Any wonder there’s a growing impression that these guys are disconnected, not just from Democrats up for election, but from middle America?” a senior Democratic strategist said to me this morning.

Time is running out for action on the DISCLOSE Act before Congress recesses to campaign. But meanwhile, the House Administration Committee on Thursday is holding a hearing on a semi-related campaign finance bill, H.R. 6116, the Fair Elections Now Act  sponsored by Rep. John Larson (D-CT). Now that we read Rep. Larson’s news release and the bill summary more closely, we conclude it wasn’t fair in Monday’s Dispatch from the Front to call it “yet another attempt to limit political speech akin to the DISCLOSE Act.” It’s more recondite than that.

Rep. Larson’s bill is a public financing of campaigns bill, creating a Fair Elections Fund with 400 percent matches for small dollar contributions. It’s more obscure in its attempts to control speech, at least at the start, using dollars to structure and regulate campaign spending and thus the political debate.

Although there is this obvious attempt to determine expression:

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Circumnetting the Cabinet

Cabinet officials were on the road last week, making announcements and promoting the Obama Administration’s priorities.

Des Moines Register blog, Aug. 17,Vilsack: Estate tax won’t hurt most farmers“:

U.S. Agriculture Secretary Tom Vilsack today defended proposals to reinstate the estate tax, despite concerns raised at an Iowa State Fair roundtable about the need for more rural capital and incentives for young farmers.

Vilsack, the former Iowa governor, said he thinks the estate tax will be restored. The key is having appropriate exemptions for people who want to pass their farm down to a family member or someone else, he said. He expects to see a large enough exemption to cover the “vast majority” of farms and ranches in the country, he said.

St. Louis Post Dispatch, Aug. 20, “Salazar views Arch designs, says ‘We will get this done.’“:

Salazar called the five designs exciting and said that better use of the Arch grounds and connections to St. Louis and East St. Louis are important goals in even in a recession.

“We will make this one of our highest priorities,” he said. “I cannot find any place in the U.S. that has the frame for an urban park lilke you have here with the Arch and river.”

Tech Daily Dose, Aug. 17, “Broadband Grants Totaling $1.8 Billion Announced“:

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The Priority is Jobs, Jobs, Jobs. That and Limiting Political Speech

We’re struggling to make the connection: Passage of the DISCLOSE Act will create jobs, how exactly?

From Hotline on Call, “DISCLOSE Act Will Get Second Look”:

Senate Dems plan to bring up a campaign finance measure once again, according to the bill’s supporters who hope to win cloture by wooing key GOP senators.

The DISCLOSE Act, which could not clear Senate hurdles when it came up just before the Aug. recess, will head back to the floor for a vote when the Senate returns next month, according to spokespeople for Senate Maj. Leader Harry Reid and Sen. Chuck Schumer (D-NY), the bill’s lead sponsor.

The DISCLOSE Act is to free speech as the Employee Free Choice Act is to freedom of association.

That is, antithetical.

On July 27, the Senate failed to invoke cloture on S.3628, the DISCLOSE Act, by a vote of 57-41. Senate Majority Leader Harry Reid voted no in order to retain his parliamentary ability to bring the measure back up.

To again quote from the National Association of Manufacturers’ “Key Vote” letter in opposition to the bill:

Put simply, this bill threatens First Amendment freedoms and is a direct assault on the U.S. Constitution. Its purpose is to hinder the ability of organizations, including associations such as the NAM, to give a voice to their members’ views and priorities. The U.S. Supreme Court repeatedly has recognized that voluntary associations are key participants in the public debate, and that government’s attempts to curb participation in associations in order to stifle their voice in the public debate violate the First Amendment. There need be no further discussion on whether First Amendment freedoms should apply to some and not to others.

(Hat tip: Center for Competitive Politics, which posts, “DISCLOSE back from the dead?”

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‘Crude’ Footage Reveals Lies Behind Trial Lawyers’ Suit Against Chevron

Now, THIS is a blockbuster. Footage from the documentary-style film, “Crude,” reveals that U.S. trial lawyers strategized with a supposedly independent court-appointed expert in Ecuador who went on to recommmend penalizing Chevron $27.4 billion for environmental damage in the Amazon.

In a court filing today in U.S. District Court, Southern District of New York, attorneys for Chevron detailed the collusion among Steven Donziger, the U.S. trial lawyer who has masterminded the suit, the Ecuadorian lawyers who serve as the public face of the anti-Chevron campaign, and Richard Cabrera, an engineer later appointed as the court’s “special master” charged with assessing the pollution and damages. It is Cabrera who recommended the $27.4 billion damage figure, earning him praise from anti-Chevron activists who hailed his findings as proof of the company’s greed and criminality.

The damning revelations are the result of Chevron’s successful legal efforts to gain access to outtakes from the movie, “Crude,” which the director, Joe Berlinger, claimed to be a fair and balanced effort to show both sides in the litigation over Texaco’s operations in Ecuador between 1964 and 1990. Chevron purchased Texaco in 2001.  Berlinger claimed journalistic privilege and fought to keep control of the footage, but was ordered by the Second Circuit Court of Appeals on July 15 to turn over relevant material.  The review by Chevron’s lawyers of the first batch of outtakes shows that not only that the legal case against Chevron is built on lies, but that Berlinger’s reputation as a serious, fair-minded documentarian is hollow.

The opening of Chevron’s memorandum filed today reads like a good movie, with the added virtue of being true. From the document, “Chevron Corporation’s Memorandum of Law in Support of Motion for a Preservation Order, and to supplement and enforce the subpoenas,” filed by Chevron’s attorney, Randy Mastro, with Gibson Dunn & Crutcher:

“Hold on a second, you know, this is Ecuador. . . . You can say whatever you want and at the end of the day, there’s a thousand people around the courthouse, you’re going to get what you want. Sorry, but it’s true.” “Because at the end of the day, this is all for the Court just a bunch of smoke and mirrors and bullshit. It really is. We have enough, to get money, to win.” Ex. F at 195-05.1 So says Lago Agrio Plaintiffs’ counsel and New York licensed lawyer Steven Donziger in an outtake from Crude produced just days ago pursuant to the orders of this Court and the Second Circuit. Donziger makes these statements during a meeting with Plaintiffs’ U.S. environmental consultants Charles Champ, Ann Maest, and Dick Kamp, after Maest tells him, point blank, that they need evidence of groundwater contamination, because Plaintiffs did not submit any and “right now all the reports are saying it’s just at the pits and the stations and nothing has spread anywhere at all.” Id. When Champ continues to press on the lack of evidence, Donziger looks at the camera and says, “There’s another point I got to make . . . with these guys, but I can’t get this on camera,” and then the camera goes off. Id.

Chevron has thus far been able to review only a small fraction of the outtakes produced, but already it is clear that they contain conclusive evidence that Plaintiffs’ counsel, consultants, and associates have knowingly participated in a fraudulent enterprise to corrupt the legal proceedings pending in Ecuador against Chevron. The express goal of their scheme is to procure a fraudulent, multi-billion dollar damages recommendation from a supposedly independent “Special Master,” and then to use that fraudulent recommendation either to extort a settlement from Chevron or to obtain a fraudulent judgment from the Ecuadorian court.

We’ve uploaded the court filing here. (Scribd here.) The 39-page document provides a wealth of details about the sordid  orchestration of the claims against Chevron, with Steven Donziger being the cynical conductor. The key factual point appears on page five:

The Crude Outtakes Show That Plaintiffs’ Counsel and Consultants Planned and Created the Supposedly Independent $27.4 Billion “Global Expert Assessment”

The outtakes that Chevron has reviewed so far leave no doubt that Plaintiffs arranged for Cabrera’s appointment and decided what Cabrera’s report would say, and that Plaintiffs’ lawyers and their U.S. consultants—not independent experts working for Cabrera—drafted Cabrera’s initial work plan and ultimately his damages assessment in the Lago Agrio Litigation.

We have followed this case because the litigation captures so well the modern shakedown campaigns that trial lawyers and activists carry out against U.S. businesses, often cheered on by a biased media. The evidence was always there, conclusions ready to be drawn. Now there’s no denying it — the corruption behind this litigation is on film.

Earlier posts about Chevron, “Crude,” and Donziger.

Disclosure: As I have disclosed repeatedly, Chevron paid for several bloggers, myself included, to take a trip to Florida and Ecuador in June 2009, during which Chevron presented its side of  the case. No one at Chevron has ever told me what to write on the issue.

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