Fine Legal Minds

After careful analysis, the Congressional Research Service has found that both HR 1586 and S 651 may violate Article 1, Section 9, Clause 3 of the United States Constitution, according to Roger Russell, writing at WebCPA.

“The Congressional Research Service reached the conclusion that while certain aspects of the proposed taxing schemes may raise concerns under the Fifth Amendment and “ex post facto” clause, the strongest arguments against their constitutionality arise under the bill-of-attainder analysis.”

Excellent work by some fine legal minds, I’m sure. It took them only ten or so days to reach the same conclusion as this grandmother with a high school education who simply read the Constitution and applied some common sense.

Setting a Dangerous Precedent

From Philip Elliott at the Associated Press reporting on President Barack Obama’s remarks regarding GM and Chrysler. (Full Article)

Obama said he is committed to the survival of an auto industry – on terms that will allow it to compete internationally.

“But we also cannot continue to excuse poor decisions,” he said. “And we cannot make the survival of our auto industry dependent on an unending flow of tax dollars.”

He also said some of the industry’s progress has scarcely been noticed. He mentioned that the North American car of the year in 2008 was produced by GM.

“Let me be clear: the United States government has no interest or intention of running GM,” he said.

But that was at the same time he was formally announcing the departure of Wagoner, whom administration officials forced into retirement on Sunday in preparation for the president’s remarks.

“This is not meant as a criticism of Mr. Wagoner, who has devoted his life to this company; rather it’s a recognition that it will take a new vision and new direction to create the GM of the future.”

Let me get this out of the way up front; President Obama does says two things here with which I agree completely, not only with the President’s words but with his apparent intent. The first is that US automakers are, for the most part, producing excellent cars, a fact which is often overlooked. Second, that we can’t continue to pump taxpayer dollars into the auto industry.

It’s downhill from there.

President Obama claims that the United States government has no interest in running the day to day operations of GM. Yet, just days earlier, he requested the resignation of GM’s CEO, Rick Wagoner, a decision that was apparently made without consulting GM’s Board of Directors or Congress. If President Obama feels it’s within his authority to summarily fire Wagoner, what’s next? Replacing the Board of Directors? Approving engine specs? Scheduling bathroom breaks?

The President goes on to say, “it will take a new vision and new direction to create the GM of the future,” but in the light of recent events, one has to wonder, whose vision will that be?

As President Obama said himself, we “cannot continue to excuse poor decisions.” Again, I agree. President Obama’s decision to personally intrude in the operations of GM is an extremely poor decision for which there is no excuse.

Patty Murray, Hypocrite First Class

Just a quick tidbit for your consideration. I’ll have more to say on the AIG bonuses later today.

Although Patty Murray voted for both the TARP legislation, which originally authorized the bank bailouts, and the ARRA (stimulus) legislation, which specifically protected bonuses such as those paid at AIG, Senator Murray saw no inconsistency in being one of 12 senators who wrote to AIG and demanded that the bonuses be returned.

Check it out:

March 17, 2009

Edward Liddy
Chairman and CEO
American International Group
70 Pine Street
New York, NY 10270

Mr. Liddy,

We write today to express our outrage at American International Group’s recently revealed multi-million dollar bonus payments. In these perilous economic times, it is unconscionable for the American taxpayer to find out that the very employees responsible for running the company into the ground have now received “performance-based” awards that are hundreds of times as large as the average American’s yearly salary.  If these contracts are not renegotiated immediately, we will take action to make American taxpayers whole by recouping all of the bonuses that AIG has paid out to its financial products unit, which, by all accounts, is primarily responsible for the near-failure of the company and the devastating impact on the global financial markets.

For a company that would not exist anymore but for a $170 billion taxpayer funded rescue, it is simply morally unacceptable to spend $165 million on bonus payments, and especially offensive to spend $450 million over the next two years rewarding the employees that helped fuel the nation’s financial crisis.  Given the fact that it was the employees in this unit that brought your firm to the brink of bankruptcy and caused such havoc in the world, rewarding them is not only morally reprehensible, but entirely indefensible on any business grounds.  It is the grossest perversion of the idea of a “performance bonus” imaginable. In America, we believe in rewarding success.  AIG is attempting to reward the most extreme failure.

We insist that you immediately renegotiate these contracts in order to recoup these payments and make the American taxpayer whole. We stand ready to take the difficult, but necessary step of working to enact legislation that would allow the government to recoup these bonus payments, perhaps by imposing a steep tax– as high as 91 percent–that will have the effect of recovering nearly all of the bonuses that have been paid out since AIG turned to taxpayers for help.

At a time when families across the country are struggling to make ends meet, and hundreds of thousands of Americans are losing their jobs each month, the hubris of this company, and these employees, to demand taxpayer assistance for these bonus payments is simply and plainly unacceptable. We urge you to bring your employees to the table to renegotiate these contracts immediately. We expect that you will report back to Congress on your efforts to recoup these payments in short order. Thank you for your prompt attention to this matter.

Sincerely,

Senators Charles Schumer (D-NY), Tom Harkin (D-IA), Harry Reid (D-NV), Daniel Akaka (D-HI), Dianne Feinstein (D-CA), Barbara Boxer (D-CA), Patty Murray (D-WA), Blanche Lincoln (D-AR), Tom Carper (D-DE), Bob Menendez (D-NJ), Amy Klobuchar (D-MN), Jeff Merkley (D-OR).

Not content with demanding the return of the money (which they authorized to be paid), Murray and the others went on to threaten the bonus recipients with a bill of attainder should they refuse to return it.

Then, in what could rightfully be characterized as one of the most out-of-touch-with-reality statements ever, the Senators “…insist that you immediately renegotiate these contracts in order to recoup these payments and make the American taxpayer whole.

Make the taxpayer whole? Excuse me for saying so, but coming from a group of Senators who have recently voted to put, when all is said and done, trillions of taxpayer dollars at risk, the idea that the return of a mere $165 million will do anything to make me or any taxpayer whole is absurd and causes me to question whether these Senators shouldn’t be placed under observation for their own protection.

Even today, after the full story of the AIG bonuses has been revealed, after all the lies and attempts to cover it up, after all the Democrat, shift the blame finger pointing, Senator Murray is still touting her signature on this letter on the front page of her official website, the hypocrisy of her actions apparently not so apparent to the good Senator.

Constitution Be Damned!

Article I, section 9, clause 3 of the United States Constitution: No Bill of Attainder or ex post facto law shall be passed.

From U.S. Constitution Online:

attainder n. The loss of all civil rights by a person sentenced for a serious crime. [< OFr. attaindre, to convict] Source: AHD

In the context of the Constitution, a Bill of Attainder is meant to mean a bill that has a negative effect on a single person or group (for example, a fine or term of imprisonment). Originally, a Bill of Attainder sentenced an individual to death, though this detail is no longer required to have an enactment be ruled a Bill of Attainder.

Now consider this. The United States House of Representatives today passed legislation (HB 1586) to levy a 90% tax on bonuses paid to employees at American International Group, Inc. (AIG). and other companies receiving over $5 billion in taxpayer funds.

They voted to do this despite the fact that they passed the original legislation authorizing use of taxpayer funds to help shore up struggling financial institutions.

Despite the fact that AIG was awarded the money with no strings attached, simply as an influx of funds desperately needed to continue business operations.

Despite the fact that AIG was contractually obligated to award the bonuses.

Despite the fact that honoring contracts is one component of continuing business operations.

Despite the fact that the original legislation contained language authorizing the payment of contractually mandated bonuses.

Despite the fact that no evidence has been presented indicating that the recipients of the bonuses have engaged in any wrongdoing.

I’m certainly no legal scholar; hey, I’m just a high school graduate (albeit from back in the day when a high school diploma actually meant something), but if HB 1586 does not meet the definition of a Bill of Attainder outright, it seems as though it’s walking a mighty fine line.