Tag Archives: Congress

FISA Abuses Are a Special Threat to Privacy and Due Process

By  David B. Rivkin Jr. and Lee A. Casey

Feb. 26, 2018, in the Wall Street Journal

The House Democratic surveillance memo is out, and it should worry Americans who care about privacy and due process. The memo defends the conduct of the Justice Department and Federal Bureau of Investigation in obtaining a series of warrants under the Foreign Intelligence Surveillance Act to wiretap former Trump campaign adviser Carter Page.

The Democrats argue that Christopher Steele, the British former spy who compiled the Trump “dossier” on which the government’s initial warrant application was grounded, was credible. They also claim the FISA court had the information it needed about the dossier’s provenance. And they do not dispute former FBI Deputy Director Andrew McCabe’s acknowledgment that the FBI would not have sought a FISA order without the Steele dossier.

The most troubling issue is that the surveillance orders were obtained by withholding critical information about Mr. Steele from the FISA court. The court was not informed that Mr. Steele was personally opposed to Mr. Trump’s election, that his efforts were funded by Hillary Clinton’s campaign, or that he was the source of media reports that the FBI said corroborated his dossier. These facts are essential to any judicial assessment of Mr. Steele’s veracity and the applications’ merits.

The FBI should have been especially wary of privately produced Russia-related dossiers. As the Washington Post and CNN reported in May 2017, Russian disinformation about Mrs. Clinton and Attorney General Loretta Lynch evidently prompted former FBI Director James Comey to announce publicly the close of the investigation of the Clinton email server, for fear that the disinformation might be released and undermine the bureau’s credibility.

In addition, even assuming the dossier was accurate regarding Mr. Page, its allegations are thin. Mr. Page was said to have met in Moscow with Russian officials, who raised the potential for cooperation if Trump was elected; Mr. Page was noncommittal. The most significant claim—that those officials offered Mr. Page a bribe in the form of Russian business opportunities—suggests he was not a Russian agent. Existing operatives don’t need to be bribed.

There was no good reason to withhold from the FISA court any information regarding Mr. Steele, his anti-Trump biases, or the dossier’s origin as opposition research. The court operates in secret, so there was no danger of revealing intelligence sources and methods. The inescapable conclusion is that the information was withheld because the court would have been unlikely to issue the order if it knew the whole truth.

That’s a problem because following the rules and being absolutely candid with the court is even more essential in the FISA context than in ordinary criminal investigations. Congress enacted FISA in 1978 to create a judicial process through which counterintelligence surveillance could take place within the U.S., even when directed at American citizens, consistent with “this Nation’s commitment to privacy and individual rights.”

Because the purpose of counterintelligence is to gather information, not necessarily to prosecute criminals, the standards required for issuance of a FISA order are less demanding than those governing warrant requests in criminal cases. In both contexts a finding of “probable cause” is required. But an application for a criminal warrant must show, among other things, that “there is probable cause for belief that an individual is committing, has committed, or is about to commit a particular offense” under federal law. Under FISA, it’s enough to show probable cause that the targeted U.S. person’s “activities may involve a violation of the criminal statutes of the United States” (emphasis ours).

This difference is subtle but crucial. The FISA standard is far easier to meet; and in the past, the FISA court has criticized the government for taking advantage of the lower standard to obtain FISA warrants for use in criminal investigations. The lower standard makes it imperative that the responsible officials be extra careful when validating the information on which the order is based, in ensuring that the statutory standards are met, and in keeping the FISA court fully informed.

Slipshod and duplicitous FISA order applications also necessarily raise constitutional issues. FISA has been generally considered permissible under the Fourth Amendment, even though its probable-cause standard is “more flexible,” as one court noted, because of the statute’s procedural safeguards. But those protections mean very little if investigators withhold material information from the court. Moreover, in an ordinary criminal case, the target of surveillance has full due-process rights in a public trial. If a FISA order is obtained improperly, the target’s privacy is still invaded, but there is no opportunity for vindication. The perpetrators of the abuse, and even the abuse itself, will likely never be exposed.

Congress must consider carefully the actions of the FBI and Justice Department, with a determination to hold the responsible parties to account and to ask whether these abuses, which nearly went undetected, demand significant changes to the FISA process itself to protect the privacy and due-process rights of Americans.

Messrs. Rivkin and Casey practice appellate and constitutional law in Washington. They served in the White House Counsel’s Office and Justice Department in the Reagan and George H.W. Bush administrations.

Source: https://www.wsj.com/articles/fisa-abuses-are-a-special-threat-to-privacy-and-due-process-1519689446


The Judicial ‘Resistance’ Is Futile

The U.S. Supreme Court does not act in haste, so the justices raised some eyebrows last month when they took only two weeks to agree to hear the government’s appeal of an immigration case. Normally it would have taken several months, and a ruling might not have come until 2019. Instead the court is expected to issue a decision in Trump v. Hawaii by the end of the current term, in June.

Why the rush? Because lower-court judges have been playing an extraordinary cat-and-mouse game with the Supreme Court over President Trump’s three executive orders limiting immigration from several terror-prone countries. Over the past year, numerous trial and appellate courts have enjoined those orders, only to have the high court stay their decisions.

The lower-court judges have defied precedent by holding that the president has neither constitutional nor statutory authority to issue these orders. They have improperly questioned Mr. Trump’s motives, even analyzing his campaign statements for evidence of bad intent. And they have responded to each reversal from the high court by spinning new theories to strike down the orders. The judges appear to have joined the “resistance,” and it wouldn’t be surprising if the justices concluded enough is enough.

The case the court will now review is the handiwork of the Ninth U.S. Circuit Court of Appeals, which engaged in an analysis that ignored key precedents and misapplied accepted canons of statutory interpretation.

Any legal analysis of the travel orders must begin with the core constitutional propositions, articulated by the Supreme Court in Knauff v. Shaughnessy (1950), that “an alien who seeks admission to this country may not do so under any claim of right” and that the authority to exclude aliens “stems not alone from legislative power but is inherent in the executive power to control the foreign affairs of the nation.” Congress has the leading role in determining who may immigrate, stay and become a citizen. But the president has independent plenary authority to exclude aliens for foreign-policy or national-security reasons.

The Ninth Circuit brushed aside Knauff and held that Mr. Trump “lacks independent constitutional authority to issue the Proclamation, as control over the entry of aliens is a power within the exclusive province of Congress.” Then it went a step beyond that.

In 1952 Congress enacted a statute authorizing the president to “suspend the entry of all aliens or any class of aliens” whenever he finds their entry to be “detrimental” to the national interest and to establish restrictions on entry. The Ninth Circuit declared that the law as written amounts to an unconstitutional delegation of legislative power—never mind that in Knauff the high court dismissed such a challenge to a similar statute, holding that Congress had merely reaffirmed the president’s own constitutional authority.

The Ninth Circuit further argued that even if the statutory language was constitutional, it was outweighed by a provision in the 1965 Immigration and Nationality Act barring discrimination on the basis of nationality. But that provision applies to the issuance of immigrant visas, not the entry of aliens. Holding that a statute dealing with one issue vitiates a statute dealing with another matter is not, to put it mildly, an accepted statutory interpretation method.

The circuit judges still weren’t done. They held that even if the 1952 statute applied, Mr. Trump failed to comply with it. The judges characterized his proclamation as reflecting “general immigration concerns” not grounded in critical foreign-policy or national-security findings. In fact, the order clearly stated the action or inaction of the eight designated governments made it impossible to assess adequately whether admission of their nationals creates an unacceptable risk to the U.S.

That was an especially egregious error. The Constitution and Supreme Court cases going back to the seminal Marbury v. Madison (1803) grant the courts no authority to review the discretionary policy choices made by the political branches. When it comes to immigration, the judiciary’s role is limited to determining whether any procedural requirements Congress had enacted have been satisfied. That is what the Supreme Court did in Knauff and what the Ninth Circuit should have done here.

The Supreme Court seems likely to correct this error. The justices voted 7-2 in December to stay any judicial order stopping implementation of the current immigration policy, even before the Ninth Circuit’s decision was issued. One hopes the justices will strongly affirm that the president has the power to exclude aliens from the U.S. for foreign-policy and national-security purposes, and that the judiciary has no role in reviewing his policy choices in this area. A unanimous ruling would send an especially strong message.

Messrs. Rivkin and Casey practice appellate and constitutional law in Washington. They served in the White House Counsel’s Office and Justice Department in the Reagan and George H.W. Bush administrations.

Source: https://t.co/CTxCOOSJ8F

The Zero That Makes Mulvaney a Hero

By Democrats’ design, the CFPB director has vast power. He can use it to shrink the bureau.

Richard Cordray asked Federal Reserve Chair Janet Yellen for $217 million in October—his last such request as director of the Consumer Financial Protection Bureau. Last week Mr. Cordray’s acting successor, Mick Mulvaney, made his first quarterly funding request: “$0.” What a difference a few months make.

Established in the wake of the 2008 financial crisis according to now-Sen. Elizabeth Warren’s vision, the CFPB ran wild under Mr. Cordray’s leadership—issuing reams of punishing regulations and conducting endless fishing expeditions, sometimes into industries Congress had specifically excluded from its jurisdiction.

This was possible because the bureau was designed to be insulated from accountability. It is led by a single director, whom the president cannot fire except for cause, and funded by the Fed, so that it need not justify its actions and funding needs to Congress.

Whether this arrangement is constitutional is an open question, currently pending in the U.S. Circuit Court of Appeals for the District of Columbia. But for now, as that court’s Judge Brett Kavanaugh has observed, it renders the CFPB director “the single most powerful official in the entire United States Government” (with the possible exception of the president).

That power now belongs to Mr. Mulvaney—and if Mr. Cordray had no constraints in his overreach, his successor is equally free to rein it in. Mr. Mulvaney has already frozen new regulations as well as regulatory “guidance,” which agencies often treat as carrying the force of law. But with Mr. Cordray’s minions burrowed into the bureau’s 1,600-person workforce, tweaks to rules and enforcement policies will only go so far.

The linchpin for fast and effective deregulation is substantially defunding the agency and clearing out its ranks in the process. Mr. Mulvaney’s request of zip from Ms. Yellen is a good first step.

The statute creating the bureau sets its budget at “the amount determined by the Director to be reasonably necessary to carry out the authorities of the Bureau,” and no one is authorized to second-guess that determination. That supports Mr. Mulvaney’s decision to forgo additional funding this quarter and draw down the unauthorized $177 million “reserve fund” Mr. Cordray built up during his tenure.

The language that authorizes Mr. Mulvaney to slash funding applies equally to spending—after all, determining what is “reasonably necessary” to do the bureau’s business implies determining what that business is. When Congress has made a lump-sum appropriation to an agency without mandates for spending on particular items, the courts have viewed that as authorization for the agency to choose how to spend the funds. The CFPB’s funding mechanism confers even broader discretion on the director given that he controls revenue as well.

It is possible that a court would require funding for the CFPB’s statutory obligations. The statute requires, for example, that the bureau establish an office focused on “traditionally underserved consumers and communities.” That mandate suggests that the director cannot zero out the office’s budget. But it says nothing about how much funding is required or whether assistance to underserved communities is best organized at the state level, with a skeleton crew at the CFPB playing a coordinating role. There is no standard by which a court could review those decisions.

The bottom line is that all of the CFPB’s discretionary spending is at the pleasure of the director, and the bulk of its $630 million budget is discretionary. That gives Mr. Mulvaney the power to reshape the agency radically—and resize it—in short order. And by exerting his powers to their fullest, perhaps Mr. Mulvaney will be able to convince even congressional Democrats that those powers are excessive and ought to be restrained.

Messrs. Rivkin and Grossman practice appellate and constitutional law in Washington.

Source: https://www.wsj.com/articles/the-zero-that-makes-mulvaney-a-hero-1516566319

Can a President obstruct Justice?

Speculation about Special Counsel Robert Mueller’s investigation has turned toward obstruction of justice—specifically, whether President Trump can be criminally prosecuted for firing James Comey as director of the Federal Bureau of Investigation or for earlier asking Mr. Comey to go easy on onetime national security adviser Mike Flynn. The answer is no. The Constitution forbids Congress to criminalize such conduct by a president, and applying existing statutes in such a manner would violate the separation of powers.

The Constitution creates three coequal branches of government, and no branch may exercise its authority in a manner that would negate or fundamentally undercut the power of another. The power to appoint and remove high-level executive-branch officers, such as the FBI director, is a core aspect of the president’s executive authority. It is the principal means by which a president disciplines the exercise of the executive power the Constitution vests in him.

The same is true of Mr. Trump’s request, as purported by Mr. Comey: “I hope you can see your way clear . . . to letting Flynn go.” The FBI director wields core presidential powers when conducting an investigation, and the president is entirely within his rights to inquire about, and to direct, such investigations. The director is free to ignore the president’s inquiries or directions and risk dismissal, or to resign if he believes the president is wrong. Such officials serve at the president’s pleasure and have no right to be free of such dilemmas.

A law criminalizing the president’s removal of an officer for a nefarious motive, or the application of a general law in that way, would be unconstitutional even if the president’s action interferes with a criminal investigation. Such a constraint would subject every exercise of presidential discretion to congressional sanction and judicial review. That would vitiate the executive branch’s coequal status and, when combined with Congress’s impeachment power, establish legislative supremacy—a result the Framers particularly feared.

Mr. Trump’s critics claim that subjecting the president’s actions to scrutiny as potential obstructions of justice is simply a matter of asking judges to do what they do every day in other contexts—determine the purpose or intent behind an action. That is also wrong. The president is not only an individual, but head of the executive branch. Separating his motives between public interests and personal ones—partisan, financial or otherwise—would require the courts to delve into matters that are inherently political. Under Supreme Court precedent stretching back to Marbury v. Madison (1803), the judiciary has no power to do so. And lawmakers enjoy an analogous immunity under the Speech and Debate Clause.

The president’s independence from the other branches does not merely support “energy” in the chief executive, as the Framers intended. It also ensures that he, and he alone, is politically accountable for his subordinates’ conduct. If officials as critical to the executive branch’s core functions as the FBI director could determine whom and how to investigate free from presidential supervision, they would wield the most awesome powers of government with no political accountability. History has demonstrated that even when subject to presidential authority, the FBI director can become a power unto himself—as J. Edgar Hoover was for decades, severely damaging civil liberties.

There are limits to presidential power. The Constitution requires the Senate’s consent for appointment of the highest-level executive-branch officers—a critical check on presidential power. The Supreme Court has upheld statutory limits—although never involving criminal sanction—on the removal of certain kinds of officials. But the decision to fire principal executive-branch officers like the FBI director remains within the president’s discretion. A sitting president can also be subjected to civil lawsuits—but only in a carefully circumscribed fashion, to avoid impeding his ability to discharge the powers of his office.

The ultimate check on presidential power is impeachment. Even though Mr. Trump cannot have violated criminal law in dismissing Mr. Comey, if a majority of representatives believe he acted improperly or corruptly, they are free to impeach him. If two-thirds of senators agree, they can remove him from office. Congress would then be politically accountable for its action. Such is the genius of our Constitution’s checks and balances.

None of this is to suggest the president has absolute immunity from criminal obstruction-of-justice laws. He simply cannot be prosecuted for an otherwise lawful exercise of his constitutional powers. The cases of Richard Nixon and Bill Clinton —the latter impeached, and the former nearly so, for obstruction of justice—have contributed to today’s confusion. These were not criminal charges but articulations of “high crimes and misdemeanors,” the constitutional standard for impeachment.

And in neither case was the accusation based on the president’s exercise of his lawful constitutional powers. If a president authorizes the bribery of a witness to suppress truthful testimony, as Nixon was accused of doing, he can be said to have obstructed justice. Likewise if a president asks a potential witness to commit perjury in a judicial action having nothing to do with the exercise of his office, as Mr. Clinton was accused of doing.

Although neither man could have been prosecuted while in office without his consent, either could have been after leaving office. That’s why President Ford pardoned Nixon—to avoid the spectacle and poisonous political atmosphere of a criminal trial. In Mr. Trump’s case, by contrast, the president exercised the power to fire an executive-branch official whom he may dismiss for any reason, good or bad, or for no reason at all. To construe that as a crime would unravel America’s entire constitutional structure.

Messrs. Rivkin and Casey practice appellate and constitutional law in Washington. They served in the White House Counsel’s office and Justice Department in the Reagan and George H.W. Bush administrations.

Source: https://www.wsj.com/articles/can-a-president-obstruct-justice-1512938781

Mulvaney Can Undo Cordray’s Legacy

When Richard Cordray attempted to install his chief of staff as acting director of the Consumer Financial Protection Bureau, his evident aim was to buy enough time to cement his legacy—particularly a just-finalized rule that the agency expects will wipe out half or more of the short-term lending industry. On Tuesday a federal judge thwarted Mr. Cordray, holding that President Trump acted within his authority by appointing Mick Mulvaney to moonlight as acting CFPB director while continuing to lead the Office of Management and Budget.

On his first day at the bureau, Mr. Mulvaney put a freeze on new rules and guidance. But that doesn’t solve the problem of the payday-lender rule. Mr. Mulvaney acknowledged that he cannot simply recall rules that have already gone out the door. Repealing a final rule typically requires restarting the rule-making process, which can take years to complete.

But Mr. Mulvaney can stop the payday-lender rule by putting on his OMB hat and invoking the Paperwork Reduction Act of 1980. That law is generally thought of as—actually, strike that. Nobody ever thinks about the Paperwork Reduction Act. It has about as much currency in Washington as the Filled Cheese Act of 1896.

The PRA, which was purportedly strengthened in 1995, was an effort to address a real problem. Federal agencies are eager to impose paperwork burdens on citizens and businesses. It costs an agency almost nothing to impose a new record-keeping requirement or reporting mandate. The expense falls on those required to carry it out.

The obvious solution was to put agencies on a paperwork budget and force them to internalize the costs they foist on the public. To ensure that agencies don’t evade that responsibility, the PRA established robust centralized oversight in the Office of Management and Budget, which is part of the White House. Every “information collection request” issued or imposed by a federal agency must be approved by OMB. That includes government forms as well as requirements that private parties collect information. If OMB disapproves a request, the agency cannot enforce it.

In practice, however, the PRA doesn’t have much effect. Disapprovals from OMB are exceedingly rare. In part, that’s because most agencies are subject to presidential control, rendering the act superfluous—if the White House opposes a regulatory proposal, it can simply instruct the agency to drop or amend it. By the time PRA review rolls around, the White House has already had its say.

Then there are the independent agencies insulated from presidential control, such as the Federal Communications Commission, the Securities and Exchange Commission and most other financial regulators. The PRA empowers them to overrule a disapproval by majority vote. The CFPB was designed to be an independent agency, but unlike the others it has a single director. The PRA limits the ability to overrule to “an independent regulatory agency which is administered by two or more members.” So OMB can disapprove any action by the bureau that imposes unnecessary or excessive paperwork burdens, without fear of being overruled.

Mr. Mulvaney should exercise that power. Every single provision of the short-term lending rule is structured around information collection requests subject to the PRA. The rule’s central requirement is that lenders determine a borrower’s ability to repay by demanding financial information from the borrower, verifying it, and then recording the result of various calculations. Each step is its own paperwork burden.

Whether or not the agency can ultimately justify its regulatory approach—and we have our doubts—it has to do its homework under the PRA. That includes accurately assessing costs, considering the need for and utility of each individual paperwork requirement, balancing the costs and benefits, and minimizing collection burdens. The bureau’s final rule differs substantially from its initial proposal, but the agency made little attempt to account for changes in paperwork burden, as the PRA requires it to do. Nor did it engage with the detailed criticisms of its analysis of the proposal’s costs. The three-page analysis published with the final rule can only be described as Mr. Cordray—perhaps unaware of the bureau’s unique status under the PRA—thumbing his nose at OMB and the White House.

That is reason enough to disapprove the rule and send the CFPB back to the drawing board. It would also signal that the Trump administration actually intends to enforce the PRA—to the point that it will halt a major regulation to ensure compliance. That should prompt other agencies to pay attention to paperwork burdens.

Messrs. Rivkin and Grossman practice appellate and constitutional law in Washington. Mr. Rivkin served at the Justice Department and the White House Counsel’s Office. Mr. Grossman is an adjunct scholar at the Cato Institute.

Source: https://www.wsj.com/articles/mulvaney-can-unravel-cordrays-legacy-1512086936

Begging Your Pardon, Mr. President

The Trump presidency has been consumed by Special Counsel Robert Mueller’s efforts to uncover collusion between the Trump campaign and Moscow. Mr. Mueller reportedly has secured one or more indictments that he will announce Monday. Some Republicans now seek a new special counsel to investigate if the Clinton Campaign “colluded” with Russians to smear Candidate Trump, along with other aspects of the Clintons’ relationship with Russia and Russian nationals. But one special counsel already is one too many.

During the 1980s and ’90s, American politics was repeatedly distorted, and lives devastated, through the appointment of independent counsels under the post-Watergate Ethics in Government Act. These constitutionally anomalous prosecutors were given unlimited time and resources to investigate officials, including President Clinton, and scandals, such as Iran-Contra. Once appointed, almost all independent counsels built little Justice Departments of their own and set out to find something—anything—to prosecute. Hardly anyone lamented the expiration of this pernicious law in 1999.
But special counsels, appointed by the attorney general and in theory subject to Justice Department oversight, haven’t proved any better in practice. Mr. Mueller’s investigation has already morphed into an open-ended inquiry. It is examining issues—like Donald Trump’s private business transactions—that are far removed from the Russian question. It also has expanded its focus beyond the original question of collusion with the Russians to whether anyone involved in the Russia investigation has committed some related offense. That is evident from investigators’ efforts to interview White House aides who were not involved in the 2016 campaign, and from leaks suggesting that Mr. Trump’s firing of FBI Director James Comey might have “obstructed” justice.

That claim is frivolous, and it damages America’s constitutional fabric even to consider it. A president cannot obstruct justice through the exercise of his constitutional and discretionary authority over executive-branch officials like Mr. Comey. If a president can be held to account for “obstruction of justice” by ending an investigation or firing a prosecutor or law-enforcement official—an authority the constitution vests in him as chief executive—then one of the presidency’s most formidable powers is transferred from an elected, accountable official to unelected, unaccountable bureaucrats and judges.

Mr. Mueller’s investigation has been widely interpreted as partisan from the start. Mr. Trump’s opponents instantaneously started talking of impeachment—never mind that a special counsel, unlike an independent counsel, has no authority to release a report to Congress or the public. Mr. Trump’s supporters count the number of Democratic donors on the special-counsel staff. The Mueller investigation is fostering tremendous bitterness among Trump voters, who see it as an effort by Washington mandarins to nullify their votes.

Mr. Trump can end this madness by immediately issuing a blanket presidential pardon to anyone involved in supposed collusion with Russia or Russians during the 2016 presidential campaign, to anyone involved with Russian acquisition of an American uranium company during the Obama administration, and to anyone for any offense that has been investigated by Mr. Mueller’s office. Political weaponization of criminal law should give way to a politically accountable democratic process. Nefarious Russian activities, including possible interference in U.S. elections, can and should be investigated by Congress.

Partisan bitterness will not evaporate if lawmakers take up the investigation. But at least those conducting the inquiry will be legitimate and politically accountable. And the question of whether Russia intervened in the 2016 election, and of whether it made efforts to influence U.S. policy makers in previous administrations, is first and foremost one of policy and national security, not criminal law.

The president himself would be covered by the blanket pardon we recommend, but the pardon power does not extend to impeachment. If Congress finds evidence that he was somehow involved in collusion with Russia, the House can determine whether to begin impeachment proceedings. Congress also is better equipped, as part of its oversight role, to determine whether and how the FBI, Justice Department and intelligence agencies might have been involved in the whole affair, including possible misuse of surveillance and mishandling of criminal investigations.

There is ample precedent for using the presidential pardon authority to address matters of political importance. Certainly it is what the framers expected. As Alexander Hamilton explained in Federalist 69, the pardon power was to “resemble . . . that of the king of Great Britain.” In Federalist 74, he observed that “there are often critical moments, when a well-timed offer of pardon to . . . insurgents or rebels may restore the tranquility of the commonwealth.”

Securing harmony in the body politic was President Washington’s motivation when he offered amnesty to participants in the Whiskey Rebellion in the 1790s, and it was President Lincoln’s motivation when he issued an amnesty during the Civil War for Confederates who would return their allegiance to the Union. Similar reasons motivated President Ford to pardon Richard Nixon, and President Carter when he offered amnesty to Vietnam-era draft evaders.

Lincoln’s proclamation of Dec. 8, 1863, is an excellent model of a broadly drafted and complete amnesty: “I . . . do proclaim, declare and make known to all persons who have directly or by implication participated in the existing rebellion, except as hereinafter excepted, that a full pardon is granted to them . . . upon condition that every such person shall take and subscribe an oath” of loyalty to the U.S. A similar pardon can be issued with respect to the Russian affair, ending the criminal investigations and leaving the business to Congress.

Permitting the criminal law again to become a regular weapon in politics is more destructive of democratic government than ham-handed efforts by a foreign power to embarrass one or more presidential candidates. It is true that Washington’s Augean stables need periodic cleaning, but it is Congress that should wield the shovels.

Messrs. Rivkin and Casey practice appellate and constitutional law in Washington. They served in the White House Counsel’s office and Justice Department in the Reagan and George H.W. Bush administrations.

Source: https://www.wsj.com/articles/begging-your-pardon-mr-president-1509302308

‘You’re Fired,’ Trump Should Tell Richard Cordray

Under a dubious statute, the CFPB head can be dismissed only for cause—but there’s plenty of it.

By David B. Rivkin Jr. and Andrew M. Grossman

April 13, 2017, in the Wall Street Journal

The greatest mystery in Washington involves not Russian spies or wiretaps but Richard Cordray’s continued employment as director of the Consumer Financial Protection Bureau. In the face of President Trump’s mandate for change, Mr. Cordray continues the Obama administration’s regulatory crusade against lenders, blocking access to the credit that supports so many small businesses and so much consumer spending.

Why would a president who made a TV show out of firing underlings now suffer a subordinate who refuses to get with the pro-growth agenda he campaigned on? If reports from the West Wing are to be believed, Mr. Trump’s unusual timidity is the result of overcautious legal and political advice.

Mr. Cordray is insulated from presidential control by a New Deal-era innovation: a statutory clause that allows the president to fire an independent agency head only “for cause,” meaning “inefficiency, neglect of duty, or malfeasance in office.” In October a three-judge panel of the U.S. Circuit Court of Appeals for the District of Columbia struck down that restriction an infringement of the president’s constitutional authority to “take care that the laws be faithfully executed.”

When Congress created the CFPB by passing the Dodd-Frank Act of 2010, Judge Brett Kavanaugh explained, it broke with decades of historical practice. Generally the power of independent agencies is diffused among multiple commissioners or directors so as to reduce the risk of abuse. Unless he can be fired, Mr. Cordray, as the sole director of the CFPB, wields more unilateral power than any government official save the president.

The panel’s decision, however, was set aside in February when the full 11-judge court voted to rehear the case. White House lawyers are reportedly waiting to see how the litigation unfolds—a process that could go well past the end of Mr. Cordray’s term in mid-2018.

But it is a mistake to regard the twists and turns of that appeal as a reason to give Mr. Cordray a reprieve. Whatever the D.C. Circuit ultimately decides, no one disputes that the president may dismiss the CFPB director for cause. And the evidence is ample to support firing Mr. Cordray, on all three grounds permitted under law:

Inefficiency. Regulation, the Supreme Court has recognized, should seek to maximize economic efficiency through cost-benefit analysis. Yet the CFPB has pursued an agenda at odds with any clear-eyed view of economic growth and efficiency.

Its rules have made community banks and credit unions more reluctant to issue mortgages, particularly in rural areas, and accelerated consolidation of the industry, reducing competition. Its regulations have limited access to checking accounts, credit cards and other financial products, driving vulnerable Americans to depend on riskier sources of financial services and credit. The agency has even worse policies in the works, such as limits on consumer arbitration and payday lending.

Taken as a whole, the CFPB’s heavy-handed approach to regulation and enforcement has driven up the cost of borrowing, to the detriment of consumers and small businesses.

More prosaically, Mr. Cordray’s CFPB has botched basic administrative procedures meant to ensure efficiency in regulation. About a third of its rules were finalized before being published in the agency’s Unified Agenda, depriving the public of valuable notice and frustrating the regulatory review process. That haste has also led to serious errors: About a quarter of the CFPB’s rules have required correction after being finalized. Further, Mr. Cordray has specifically embraced “regulation through enforcement,” which forgoes orderly rule making entirely in favor of imposing penalties for newly contrived “violations.” This is no way to run a financial watchdog.

• Neglect of duty. Mr. Cordray allowed tens of millions of dollars in cost overruns to pile up for a lavish renovation of the CFPB’s Washington headquarters.

The agency also missed the major consumer-finance scandal of the past decade. It ignored years of complaints about an epidemic of unauthorized customer accounts at Wells Fargo . The CFPB galloped in to exact a penalty only after an investigation by California officials and other regulators was complete.

Malfeasance. What was the CFPB doing all that time? The bureau, it turns out, had spread its resources too thin, focusing on alleged discrimination in auto-dealer lending—an area that Congress specifically excluded from its purview. Not only did the agency run roughshod over that limitation, but its statistical analysis relied on dubious methods such as guessing borrowers’ race based on their surnames.

No such guesswork was required for the Merit Systems Protection Board and Government Accountability Office to find that the CFPB itself had become a hotbed of race and sex discrimination. As early as 2013, a report by Deloitte Consulting revealed that the agency’s internal performance reviews were biased against minority employees, many of whom also reported discrimination at the agency. Years later, claims of discrimination persist, particularly among black employees. Mr. Cordray failed to resolve these issues even years after initial reports.

Any of these things would be sufficient to dismiss Mr. Cordray for cause. All of them together make it necessary to do so.

If Mr. Cordray were to challenge his firing, we have little doubt the courts would support Mr. Trump. Assuming the courts even agreed that they have the power to review a presidential finding of cause for dismissal—which is far from established—they would still grant it substantial deference. The president would prevail, so long as he has documented his findings, explained his reasoning, and satisfied any due-process concerns by affording Mr. Cordray an opportunity to respond.

As far as Mr. Cordray is concerned, no further caution is required. What the president needs is resolve, and his famous TV catchphrase.

Messrs. Rivkin and Grossman practice appellate and constitutional law in Washington.

Source: https://www.wsj.com/articles/youre-fired-trump-should-tell-richard-cordray-1492124207