December 2011 archive

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

Find the past “On This Day in History” here.

December 16 is the 350th day of the year (351st in leap years) in the Gregorian calendar. There are 15 days remaining until the end of the year.

On this day in 1773, a group of Massachusetts colonists disguised as Mohawk Indians board three British tea ships moored in Boston Harbor and dump 342 chests of tea into the water.

The Boston Tea Party was a direct action by colonists in Boston, a town in the British colony of Massachusetts, against the British government and the monopolistic East India Company that controlled all the tea coming into the colonies. On December 16, 1773, after officials in Boston refused to return three shiploads of taxed tea to Britain, a group of colonists boarded the ships and destroyed the tea by throwing it into Boston Harbor. The incident remains an iconic event of American history, and other political protests often refer to it.

The Tea Party was the culmination of a resistance movement throughout British America against the Tea Act, which had been passed by the British Parliament in 1773. Colonists objected to the Tea Act for a variety of reasons, especially because they believed that it violated their right to be taxed only by their own elected representatives. Protesters had successfully prevented the unloading of taxed tea in three other colonies, but in Boston, embattled Royal Governor Thomas Hutchinson refused to allow the tea to be returned to Britain. He apparently did not expect that the protestors would choose to destroy the tea rather than concede the authority of a legislature in which they were not directly represented.

The Boston Tea Party was a key event in the growth of the American Revolution. Parliament responded in 1774 with the Coercive Acts, which, among other provisions, closed Boston’s commerce until the British East India Company had been repaid for the destroyed tea. Colonists in turn responded to the Coercive Acts with additional acts of protest, and by convening the First Continental Congress, which petitioned the British monarch for repeal of the acts and coordinated colonial resistance to them. The crisis escalated, and the American Revolutionary War began near Boston in 1775.

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Now I have no doubt ??? is a sincere, legitimate, and reputable firm (or not, it’s not really relevant) but one of the things I like about our sites is we’re not constant mendicants.  Like anyone else it’s a monthly expense to keep the power on.  Do we accept donations?  Yes, yes we do.

We’re also open for advertising.  $10 per site (The Stars Hollow Gazette and DocuDharma), per week- $15 for both.  5100+ unique visits as measured by Sitemeter.  Like most publications we don’t screen our ads (when we have them) because to do so implies endorsement of the ones we choose to run (Good Housekeeping Seal of Approval anyone?  Bueller?).

Can you whore your own commercial endeavors?  Sure you can, but you might want to discuss it first because there is a class of spammers who make superficially benign contributions that link to decidedly malicious sites.  If you have a business proposition to make then make it, we don’t have a necessary objection to your including a link to your tie dyed T-shirts or heirloom, handcrafted quilts but transparency is a sign of good faith.

And speaking of transparency, 35% is a damn good rate.  In my club a 35% return on a commercial telemarketing donation campaign for a Children’s Theater, Magic Show, or Semi-Pro Sports Exhibition compares favorably to a $2 Hot Dog at the Town Fair and is much less work for the members.  That said I’m unlikely to approve harvesting your registration email for spam.

$30 a month is less than my cable TV bill and I get far more satisfaction out of providing you a forum.  My wildest financial desire would be to create a trust to pay for servicing in perpetuity.  We do have PayPal links.

I hope I’ve been sufficiently crass and unsympathetic enough that you’re not tempted to open your wallet at a time when things are tough economically and there are plenty of worthier causes.  If you feel a debt of any kind it’s not your money that I’d ask for, it’s your eyeballs and content in the form of pieces, comments, recommendations, and tips.

Germany’s Hidden Risk

By Peter Coy, BusinessWeek

December 14, 2011, 11:00 PM EST

Germany’s Bundesbank-BuBa for short-has quietly, automatically lent €495 billion to the European Central Bank via Target2. That lending has balanced correspondingly huge borrowings from Target2 by the central banks of weaker nations including Greece, Ireland, and Portugal-and lately Spain, Italy, and even France. They are technically “claims,” not loans. To find them you have to root around in the footnotes of the reports of the 17 national central banks of the euro zone.

If the euro zone breaks into sorry little pieces, Germany could possibly lose its entire €495 billion claim. That’s more than $650 billion. It is 60 percent bigger than Germany’s annual federal budget-and larger than the lending under the European Financial Stability Facility and other aid programs that have received more scrutiny.

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Germany’s Bundesbank-BuBa for short-has quietly, automatically lent €495 billion to the European Central Bank via Target2. That lending has balanced correspondingly huge borrowings from Target2 by the central banks of weaker nations including Greece, Ireland, and Portugal-and lately Spain, Italy, and even France. They are technically “claims,” not loans. To find them you have to root around in the footnotes of the reports of the 17 national central banks of the euro zone.

If the euro zone breaks into sorry little pieces, Germany could possibly lose its entire €495 billion claim. That’s more than $650 billion. It is 60 percent bigger than Germany’s annual federal budget-and larger than the lending under the European Financial Stability Facility and other aid programs that have received more scrutiny.

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Here’s how it happened. When a Greek businessperson buys a truck from Germany with money from a checking account, the transaction is carried out between the two nations’ central banks via Target2. The truck seller isn’t interested in financing the purchase-it wants euros now. So the Bundesbank has to come up with money in order to deposit it in the seller’s checking account. In accounting terms, the Bundesbank acquires a liability (what it owes to the truck seller’s checking account) and an asset (a claim on the ECB).

The transformation of the Bundesbank’s balance sheet through this slow-but-steady process has been stunning-and to hard-money Germans, sickening. At the end of 2006, Target claims represented just 7 percent of the Bundesbank’s assets. By this October they represented 64 percent, according to data compiled by economists Aaron Tornell of the University of California-Los Angeles and Frank Westermann of Germany’s University of Osnabrück. The collateral the ECB holds to back those loans is primarily the sovereign debt of the euro zone’s weakest nations. It’s a far cry from the gold that’s the Bundesbank’s second-biggest asset (17 percent).

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As Europe’s financial crisis has worsened, the ECB has benevolently turned a blind eye to the poor quality of collateral posted by the Bank of Greece and others. But a reckoning is due. In an interview with Bloomberg News on Dec. 13, Bundesbank President Jens Weidmann expressed more concern about the collateral than the volume of ECB balances. “In a situation like the current one, where we are providing solvent banks with liquidity,” he said, “for me the size of the Target2 balances is less important than the risks we are taking on. It is my concern that we limit these risks as much as possible.”

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Germany faces a dilemma familiar to anyone who has ever made a bad loan-whether to keep throwing good money after bad to keep the debtor afloat or pull the plug and suffer the consequences. The half-trillion-euro claim the Bundesbank has on the ECB is an important but poorly understood factor in the decisions over the future of the euro.

European Banks Get ‘False Deleveraging’ in Seller-Financed Deals

By Anne-Sylvaine Chassany, Simon Packard and Neil Callanan, Bloomberg News

Nov 22, 2011 7:01 PM ET

Because most buyers of distressed assets fund purchases with debt, which has become increasingly expensive and difficult to obtain, banks are financing transactions themselves, even if it means retaining loans on their balance sheets. That will slow deleveraging and make more asset sales necessary, analysts say.

“A lot of those asset sales might be dependent on the banks themselves, the sellers, providing financing to the buyers,” Raoul Leonard, a London-based RBS analyst covering southern European banks, said on a conference call with clients Oct. 20, without referring to any specific deal. “It’ll be almost false deleveraging going on, but it’s off your book and you can argue that the risk-weighting changes.”

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European banks will dispose of less than 100 billion euros of the more than 500 billion euros of distressed loans and other impaired assets because they can’t afford to take losses on the sales, Huw van Steenis, a Morgan Stanley analyst in London, wrote in a Nov. 13 note. Banks may have to unload some of their good assets to U.S. or Asian competitors, he said. Van Steenis estimated banks in Europe may shrink assets by between 1.5 trillion euros and 2.5 trillion euros in two years.

The IMF-ECB ‘Plan’ – Fig-Leaf Upon Fig-Leaf

Authors: Warren Mosler & Philip Pilkington, EconoMonitor

November 29th, 2011

The latest Euro fashion is for the IMF to fund distressed sovereigns while being, in turn, funded by the ECB – while all this includes the fashiony gimmick that the IMF guarantees the loans.

The end result, of course, is that the ECB writes the check – which is precisely what it takes to make any of these schemes work. In fact, whenever you hear of any of these wacky evasions… er… sensible proposals, you can be safe in the knowledge that it will always work as long as it is the ECB writing the check. But we digress; and so here is how this latest one scheme will function.

When the ECB buys European national government bonds it credits member bank accounts on the ECB’s spreadsheet. Those accounts count as ‘money’ while the bonds did not count as ‘money’ and so, this action is said to be ‘printing money’ – and printing money is bad for some reason or other according to our German friends… and so the ECB undertakes a further step: sterilisation.

The ECB offers different euro accounts – which are also just numbers on an ECB spreadsheet – with relatively short maturities that pay interest. This is called ‘sterilisation’ because these deposits don’t technically count as money. Cool, huh?

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When the ECB buys Special Drawing Rights from the IMF it credits an IMF account with the required euros. This does not count as ‘printing money’. And when the IMF loans those funds on to Italy or whoever, it does not count as ‘printing money’ either even though, when all is said and done, the same euros sit in the same ECB accounts and they effectively come from the same place. How clever.

ECB puts emergency plans in place as German banks feel the heat

Heather Stewart, Jill Treanor and Patrick Collinson, The Guardian

Thursday 8 December 2011 15.33 EST

Following European-wide “stress tests”, Germany’s banks were found to need more than double the amount of capital anticipated, with the focus immediately turning on Commerzbank, in which the German state already owns a 25% stake, and amid speculation the government may need to step in with a fresh capital injection.

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When the initial results of stress tests intended to protect banks against the eurozone crisis were announced in October the European Banking Authority announced that €106bn (£90bn) of extra capital would be needed to shore up banks against the eurozone crisis and restore confidence in the battered sector. But that shortfall was revised up to €115bn and the gap for Germany’s banks raised to €13.1bn from €5.2bn. Commerzbank alone needs €5.3bn of the total for Germany, up from €3bn, Deutsche Bank needs €3.2bn, while the amounts needed by Spanish banks remain unchanged at €26.2bn – with Santander needing to find €15bn of the total. Commerzbank is confident it can find the extra capital by its own means.

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Those banks with shortfalls have been given until 20 January to present their proposals to their regulators and must find ways to fill gaps without leading to a “reduced flow of lending to the EU’s real economy”. The EBA reiterated that they should reduce bonuses and retain their profits to bolster their capital before attempting assets sales. Efforts already announced by French banks reduced their shortfall by €1.5bn to €7.3bn.

Europe Still Heading For Collapse

Author: Tim Duy, EconoMonitor

December 15th, 2011

The half-life of the effectiveness of European summits is growing increasingly shorter.  While I have been a long-term Europessimist, market participants are more willing to trade on whatever appears to be positive news, thus markets jump whenever it appears the Europeans are taking action.  But eventually the game will wear thin as market participants increasingly realize European “solutions” are never more than half-measures intended to kick the can down the road another few months.

And the last summit was no exception.  The reality is quickly sinking in that, relative to the dimensions of the challenge, very little was really accomplished two weeks ago.  And very little will be accomplished until European leaders come to the realization that they continue to treat the symptoms of the disease, not the cause of the disease.  They need to find a mechanism to address Europe’s internal imbalances that does not rely exclusively on deflation as a cure.

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Arguably, European policymakers might see the fundamental problem, but also recognize a real solution in years away.

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Europe doesn’t have years.  The vice of austerity packages will eventually crush to hard, and the cost of staying within the Euro will exceed the costs of exit.

Meanwhile, the ECB is at best having mixed results.  On one hand, recent actions appear to have stabilized government debt markets in Spain, Belgium, and France.  On the other, Italian yields have retraced much of their collapse.  Probably more importantly, however, stabilization of the banking crisis remains elusive.

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Germany needs to issue a massive amount of debt to support demand in Europe, even at the cost of higher relative inflation.  And, better yet, to support debt writedowns in the periphery.  The response from Germany:  Nein.

Bottom Line:  I still don’t see where this ends well.  Play the news cycle if you are so inclined, but keep one eye on the key issue.  Is Europe working to resolve their fundamental internal imbalances with anything other than deflation?  As long as the answer continues to be “no,” be afraid.  Be very afraid.

“Punting the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.

Thanks to ek hornbeck, click on the link and you can access all the past “Punting the Pundits”.

Glenn Greenwald: Bradley Manning deserves a medal

The prosecution of the whistleblower and alleged WikiLeaks source Bradley Manning is an exercise in intimidation, not justice

After 17 months of pre-trial imprisonment, Bradley Manning, the 23-year-old US army private and accused WikiLeaks source, is finally going to see the inside of a courtroom. This Friday, on an army base in Maryland, the preliminary stage of his military trial will start.

He is accused of leaking to the whistleblowing site hundreds of thousands of diplomatic cables, war reports, and the now infamous 2007 video showing a US Apache helicopter in Baghdad gunning down civilians and a Reuters journalist. Though it is Manning who is nominally on trial, these proceedings reveal the US government’s fixation with extreme secrecy, covering up its own crimes, and intimidating future whistleblowers. [..]

Despite pledging to usher in “the most transparent administration in history”, President Obama has been obsessed with prosecuting whistleblowers; his justice department has prosecuted more of them for “espionage” than all prior administrations combined.

The oppressive treatment of Manning is designed to create a climate of fear, to send a signal to those who in the future discover serious wrongdoing committed in secret by the US: if you’re thinking about exposing what you’ve learned, look at what we did to Manning and think twice. The real crimes exposed by this episode are those committed by the prosecuting parties, not the accused. For what he is alleged to have given the world, Manning deserves gratitude and a medal, not a life in prison.

Robert Sheer: There Goes the Republic

Once again the gods of war have united our Congress like nothing else. Unable to agree on the minimal spending necessary to save our economy, schools, medical system or infrastructure, the cowards who mislead us have retreated to the irrationalities of what George Washington in his farewell address condemned as “pretended patriotism.”

The defense authorization bill that Congress passed and President Obama had threatened to veto will soon become law, a fact that should be met with public outrage. Human Rights Watch President Kenneth Roth, responding to Obama’s craven collapse on the bill’s most controversial provision, said, “By signing this defense spending bill, President Obama will go down in history as the president who enshrined indefinite detention without trial in US law.” On Wednesday, White House Press Secretary Jay Carney claimed “the most recent changes give the president additional discretion in determining how the law will be implemented, consistent with our values and the rule of law, which are at the heart of our country’s strength.”

What rubbish, coming from a president who taught constitutional law. The point is not to hock our civil liberty to the discretion of the president, but rather to guarantee our freedoms even if a Dick Cheney or Newt Gingrich should attain the highest office.

(emphasis mine)

Up Date: The Senate voted for final passage for the NDAA conference report (H.R. 1540). The vote was overwhelming: 86-to-13. It now goes to President Obama for his signature.

President Obama has not yet signed the NDAA. It is not to late to tell him to veto this bill which will have a devastating effect on civil liberties and give unprecedented powers to the military and the Executive Branch. Send Obama a strong message sign the petition and send a letter:

President Obama: Veto the National Defense Authorization Act!

VETO the National Defense Authorization Act

This House passed the revised National Defense Authorization Act 283 – 136 with 93 Democrats and 43 Republicans voting against the bill. The Senate is scheduled to take up the bill later today. It inevitably pass with an overwhelming majority and be sent to President Obama to sign. Since the White has stated that they are satisfied with the minor changes, Obama will sign the bill which, as Human Rights Watch said in a press release, “a historic tragedy for rights:

(Washington, DC, December 14, 2011) – US President Barack Obama’s apparent decision to not veto a defense spending bill that codifies indefinite detention without trial into US law and expands the military’s role in holding terrorism suspects does enormous damage to the rule of law both in the US and abroad, Human Rights Watch said today. The Obama administration had threatened to veto the bill, the 2012 National Defense Authorization Act (NDAA), over detainee provisions, but on December 14, 2011, it issued a statement indicating the president would likely sign the legislation.

“By signing this defense spending bill, President Obama will go down in history as the president who enshrined indefinite detention without trial in US law,” said Kenneth Roth, executive director of Human Rights Watch. “In the past, Obama has lauded the importance of being on the right side of history, but today he is definitely on the wrong side.”

The far-reaching detainee provisions would codify indefinite detention without trial into US law for the first time since the McCarthy era when Congress in 1950 overrode the veto of then-President Harry Truman and passed the Internal Security Act. The bill would also bar the transfer of detainees currently held at Guantanamo into the US for any reason, including for trial. In addition, it would extend restrictions, imposed last year, on the transfer of detainees from Guantanamo to home or third countries – even those cleared for release by the administration.

(emphasis mine)

Glenn Greenwald at Salon wrote in his article this morning that there are “several persistent myths that circulating about this bill and President Obama’s position on it that need to be clarified once and for all:

First, while the powers this bill enshrines are indeed radical and dangerous, most of them already exist. That’s because first the Bush administration and now the Obama administration have aggressively argued that the original 2001 AUMF already empowers them to imprison people without charges, use force against even U.S. citizens without due process (Anwar Awlaki), and target not only members of Al Qaeda and the Taliban (as the law states) but also anyone who “substantially supports” those groups and/or “associated forces” (whatever those terms mean). [..]

With a couple of exceptions, this bill just “clarifies” – and codifies – the powers President Obama has already claimed, seized and exercised. [..]

This is the reason why civil libertarians have been so harshly critical of this President. It’s the reason civil liberties groups have been saying things like this even when saying them was so unpopular: it’s because Obama has, for three years now, been defending and entrenching exactly the detention powers this law vests, but doing it through radical legal theories, warped interprations (sic) of the 2001 AUMF, continuities with the Bush/Cheney template, and devotion to Endless War and the civil liberties assults (sic) it entails.

Second, as I documented at length last week, Obama’s veto threat was never about substantive objections to the detention powers vested by this bill; put another way, he was never objecting to the bill on civil liberties grounds. Obama, as I documented last week and again below, is not an opponent of indefinite detention; he’s a vigorous proponent of it, as evidenced by his contiuous (sic), multi-faceted embrace of that policy.

Obama’s objections to this bill had nothing to do with civil liberties, due process or the Constitution. It had everything to do with Executive power. The White House’s complaint was that Congress had no business tying the hands of the President when deciding who should go into military detention, who should be denied a trial, which agencies should interrogate suspects (the FBI or the CIA). Such decisions, insisted the White House (pdf), are for the President, not Congress, to make. In other words, his veto threat was not grounded in the premise that indefinite military detention is wrong; it was grounded in the premise that it should be the President who decides who goes into military detention and why, not Congress.

Third, the most persistent and propagandistic set of myths about President Obama on detention issues is that he tried to end indefinite detention by closing Guantanamo, but was blocked by Congress from doing so. It is true that Congress blocked the closing of Guantanamo, and again in this bill, Congress is imposing virtually insurmountable restrictions on the transfer of detainees out of that camp, including for detainees who have long ago been cleared for release (restrictions that Obama is now going to sign into law). But – and this is not a hard point to understand – while Obama intended to close Guantanamo, he always planned – long before Congress acted – to preserve Guantanamo’s core injustice: indefinite detention.

I need to say that again: long before, and fully independent of, anything Congress did, President Obama made clear that he was going to preserve the indefinite detention system at Guantanamo even once he closed the camp. That’s what makes the apologias over Obama and GITMO so misleading: the controversy over Guantanamo was not that about its locale – that it was based in the Carribean (sic) Ocean – so that simply closing it and then  re-locating it to a different venue would address the problem. The controversy over Guantanamo was that it was a prison camp where people were put in cages indefinitely, for decades or life, without being charged with any crime. And that policy is one that President Obama whole-heartedly embraced from the start.

All the evidence is that debunks the myth that Obama is concerned about the Constitution are there in Glen’s article.

Ironically today 220 years ago in 1791, Virginia became the last state to ratify the Bill of Rights. If the Senate passes this horrendous assault on our civil liberties, most of that historic document will be undermined. I don’t believe this that is what our Founding Fathers intended.

I don’t know if you woke up as horribly depressed today as I did, but I spent a long time looking for a single nugget of good news; that someone, somewhere still believed in Justice and The Rule of Law.

JP Morgan Hit by Ripple Effects of Rakoff Decisions Nixing SEC No Admission Settlements

Yves Smith, Naked Capitalism

Wednesday, December 14, 2011

Alison Frankel at Reuters highlights a new New York appellate court decision where JP Morgan is being hoist on the Rakoff petard. Bear Stearns, which is now owned by JP Morgan, entered into a $250 million settlement in 2006 over allegations that it cheated customers by engaging in impermissible market timing. The agreement contained standard SEC “without admitting wrongdoing or denying” language. The payment broke down into $160 million of disgorgement and $90 million of penalties.

What may surprise many readers is that the $160 million disgorgment was covered by insurance, or at least JP Morgan thought it was.

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The insurers said no dice, and JP Morgan took them to court to try to force them to pay. The lower court decided in favor of JP Morgan, but the appeals court reversed.

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Putting on a public policy, rather than a legal hat, insurance that has the effect of letting companies and boards buy their way out of the economic consequences of bad conduct is a terrible idea. Even though it is widely accepted that no one would become a director of a public company ex directors and officers insurance, the consequences are detrimental. Why should, for instance, the directors of Lehman not be sued into penury? If we didn’t have D&O insurance, companies would have to pay directors a prince’s ransom to do the job, and a director would have to work really really hard at oversight. That would mean he could probably only sit on one board (ending the board as high level social club phenomenon, another plus) and would do a vastly better job. You’d also see an end to directors who serve as mere decoration (nice enough people, say college presidents or heads of heavyweight not for profits) but add bupkis in terms of monitoring management.

Now I’ll admit we have not seen all the implications of the Rakoff decision, but this first one seems entirely salutary. I suspect on balance, the effect will be to give companies fewer “get out of jail free” cards, which is something that everyone but the SEC and public company executive should welcome.

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

How ironic that on this very day, Congress and President Barack Obama are about to approve a bill that will essentially violate at least 5 of these amendments and more.

Find the past “On This Day in History” here.

December 15 is the 349th day of the year (350th in leap years) in the Gregorian calendar. There are 16 days remaining until the end of the year.

On this day 1791, Virginia becomes the last state to ratify the Bill of Rights, making the first ten amendments to the Constitution law and completing the revolutionary reforms begun by the Declaration of Independence. Before the Massachusetts ratifying convention would accept the Constitution, which they finally did in February 1788, the document’s Federalist supporters had to promise to create a Bill of Rights to be amended to the Constitution immediately upon the creation of a new government under the document.

After the Constitution was ratified in 1789, the 1st United States Congress met in Federal Hall in New York City. Most of the delegates agreed that a “bill of rights” was needed and most of them agreed on the rights they believed should be enumerated.

Madison, at the head of the Virginia delegation of the 1st Congress, had originally opposed a Bill of Rights but hoped to pre-empt a second Constitutional Convention that might have undone the difficult compromises of 1787: a second convention would open the entire Constitution to reconsideration and could undermine the work he and so many others had done in establishing the structure of the United States Government. Writing to Jefferson, he stated, “The friends of the Constitution…wish the revisal to be carried no farther than to supply additional guards for liberty…and are fixed in opposition to the risk of another Convention….It is equally certain that there are others who urge a second Convention with the insidious hope of throwing all things into Confusion, and of subverting the fabric just established, if not the Union itself.”

Madison based much of the Bill of Rights on George Mason’s Virginia Declaration of Rights (1776), which itself had been written with Madison’s input. He carefully considered the state amendment recommendations as well. He looked for recommendations shared by many states to avoid controversy and reduce opposition to the ratification of the future amendments. Additionally, Madison’s work on the Bill of Rights reflected centuries of English law and philosophy, further modified by the principles of the American Revolution.

Those of you that read this regular series know that I am from Hackett, Arkansas, just a mile or so from the Oklahoma border, and just about 10 miles south of the Arkansas River.  It was a redneck sort of place, and just zoom onto my previous posts to understand a bit about it.

When I was around four or five years old, around 1961 or 1962, I begged my parents to get a cat for me.  I have always been more of a cat person than a dog person, but I really have nothing against dogs.  Cats and I just understand each other than dogs and I do.  That is while were still living in North Little Rock.

My grandmum had been ill with a thyroid condition that required surgery, so my parents hired a very nice black lady by the name of Sadie to look after us during the day until my grandmum recovered from her surgery.  It just so happened that Sadie new someone who had a couple of kittens to give away, so we drove over to their house one Saturday and got Lucy.

Welcome to the new America. With the “last minute” changes to the National Defense Authorization Act, the White House Press Sectary announced that President Obama will sign it contrary to his earlier threat to veto the bill. The bill would deny suspected terrorists, even U.S. citizens seized within the nation’s borders, the right to trial and subject them to indefinite detention.:

We have been clear that “any bill that challenges or constrains the President’s critical authorities to collect intelligence, incapacitate dangerous terrorists, and protect the Nation would prompt the President’s senior advisers to recommend a veto.”  After intensive engagement by senior administration officials and the President himself, the Administration has succeeded in prompting the authors of the detainee provisions to make several important changes, including the removal of problematic provisions. While we remain concerned about the uncertainty that this law will create for our counterterrorism professionals, the most recent changes give the President additional discretion in determining how the law will be implemented, consistent with our values and the rule of law, which are at the heart of our country’s strength. This legislation authorizes critical funding for military personnel overseas, and its passage sends an important signal that Congress supports our efforts as we end the war in Iraq and transition to Afghan lead while ensuring that our military can meet the challenges of the 21st century.

As a result of these changes, we have concluded that the language does not challenge or constrain the President’s ability to collect intelligence, incapacitate dangerous terrorists, and protect the American people, and the President’s senior advisors will not recommend a veto.  However, if in the process of implementing this law we determine that it will negatively impact our counterterrorism professionals and undercut our commitment to the rule of law, we expect that the authors of these provisions will work quickly and tirelessly to correct these problems.

Benjamin Wittes at Lawfare gives a quick and dirty analysis from conference report for the NDAA (pdf):

• The Senate has prevailed on the question of AUMF reaffirmation. The House bill, recall, would have contained a general reaffirmation of the AUMF, whereas the Senate language would only have reaffirmed that the existing AUMF authorized detention operations. The conference report has adopted the Senate approach. (See Sec. 1021.)
• A watered-down version of the Senate’s mandatory detention provision remains in the bill. (See Sec. 1022.) On the quickest of reads, it seems to apply only to those who are “members of” or “part of” (not supporters of) Al Qaeda and those associated forces that act in coordination with it or at Al Qaeda’s direction, not to the Taliban. It does not extend to citizens and applies to permanent resident aliens only for conduct in the United States to whatever extent the Constitution permits. And it contains the following new disclaimer: “Nothing in this section shall be construed to affect the existing criminal enforcement and national security authorities of the Federal Bureau of Investigation or any other domestic law enforcement agency with regard to a covered person, regardless of whether such covered person is held in military custody.” To put it simply, what has emerged is mush.
• The conferees have adopted the Senate’s approach to codifying the Guantanamo review process. (See Sec. 1023.) The House had laid out detailed procedures to replace those in President Obama’s executive order. The Senate, by contrast, had merely required the promulgation of procedures that tweaked aspects of the executive order around the edges. The final bill, with very minor adjustments, looks like the Senate version.
• The Senate’s requirement for new procedures for status determinations for “long-term detention” has survived-with slight tweaks. (See Sec. 1024.) The House got inserted language that clarifies that these procedures-which include counsel and a hearing before a military judge-are not required for detainees who have access to habeas. And the definition of “long term detention” is left to the Defense Department. So the provision, depending on how the executive branch implements it, could be important or could apply to a null-set of detainees.
• The House bill’s requirement that the administration create a national security protocol governing detainee interactions with the outside world has survived-but with an important change. (See Sec. 1025.) The House version required a national security protocol for each detainee. The conference report, by contrast, requires a single national security protocol governing the Guantanamo population at large.
• The conference report unsurprisingly contains language forbidding the expenditure of fiscal year 2012 money building detention facilities in the United States to house Guantanamo detainees. (See Sec. 1026.)
• It also contains language forbidding the use of fiscal year 2012 money to bring Guantanamo detainees to the United States-including for trial. (See Sec. 1027.)
• It also contains the Senate version of the overseas transfer restrictions for Guantanamo detainees. (See Sec. 1028.)
• The House’s requirement for consultation between prosecutors and the Pentagon before initiating a terrorist prosecution has survived for foreign Al Qaeda figures and detainees abroad. (See Sec. 1029.)
• It also contains the uncontroversial clarification of the right to plead guilty in military commission capital trials. (See Sec. 1030.)
• The House’s prohibition of civilian trials is gone.

h/t David Dayen at FDL

Immigration Officials Picking Up US Citizens for Deportation

By: David Dayen, Firedog Lake

Wednesday December 14, 2011 7:00 am

The Obama Administration swears that their deportation program has only captured criminals and sent them back to their home countries. Recently acquired data shows that to be false. Now we’re learning that not only non-criminals have been caught up in the immigration net. So have American citizens.

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There are few hard statistics on the number of American citizens held for deportation, but obviously when you get more aggressive about deporting people – as the Obama Administration has, with a record 1.1 million deportations during his tenure – you’re going to get a higher number of incidents like this. And these are wrongful arrests, illegal actions being taken by immigration authorities. It’s far more than just the cost of doing business.

The cases profiled here involved individuals charged on misdemeanors. But we know that represents a minority of those deported. So the likelihood is high that there have been cases of American citizens not convicted of a crime somehow falling into the immigration net and getting scheduled for deportation. In fact, a few of them probably were deported, though ICE claims that they cancel any deportation orders if the individual claims citizenship.

And this, from an ACLU lawyer, is correct: “It’s sort of like the canary in the mine. If those who have the full due process rights of U.S. citizens are being detained, it tells us a lot about potentially unlawful people who do not have those protections.” Exactly.

Florida’s Politicians (But Not Its Residents) Love Private Prisons

By: WhyIHateCCA, Firedog Lake

Wednesday December 14, 2011 10:45 am

Congresswoman Debbie Wasserman-Schultz represents Southwest Ranches, Florida, which has been at the epicenter of a debate over a proposed immigration detention facility. Residents of the town have consistently demonstrated their opposition to the facility, which they feel was designed and planned without much public knowledge of the proceedings.

Basically, they think they have been fleeced by CCA, who hopes to build the facility on land it already owns, into having a detention center that they fear will lower property values and present a risk to public safety.

Unfortunately, they’ve got a pretty poor representative in Ms. Wasserman, who’s basically taking a “lesser of available evils” approach. She initially called a town hall meeting to allow residents to voice their opposition and learn more about the project. After more than 250 people showed up to let CCA and the town council know they didn’t want a private prison, Wasserman, who had called the meeting, decided she would support the project. She now thinks it’s a good idea and that the town should move forward, saying she thinks “it is going to be far better to have that ICE detention center there than to have any other facility that would have a much more negative impact on residents there.” Other than a lead paint producing puppy mill, I can’t really imagine what would be worse for a community than a privately operated, for-profit human rights violations incubator. But there’s no chance she could have been partially swayed by the nearly $20 million CCA has spent lobbying the federal government over the past decade. Right?

Unfortunately for the residents of Southwest Ranches, Wasserman isn’t alone in ignoring her constituents interests and supporting a company with a long track record of failing to live up to its contracts. The mayor of Southwest Ranches just basically told his constituents to pound sand, because the deal is done. CCA owns the land, and has for a decade, so he says there’s really nothing residents can do to stop the construction at this point.

After FBI Director Testimony, Veto of Defense Authorization Bill Appears Likely

By: David Dayen, Firedog Lake

Wednesday December 14, 2011 11:32 am

Mueller made the comments despite changes to the bill that attempted to give the Administration several loopholes to bypass indefinite military detention on a case-by-case basis. So coming after the conference committee report, it looks like the White House counter-terrorism advisers will recommend a veto. It’s highly unlikely to believe that Mueller was freelancing here.

As we’ve discussed, this does not reflect a White House uncomfortable with statutory indefinite military detention. The Administration opposes the bill because it would put too MANY constraints on their counter-terrorism activities. They would prefer to exist in a legal gray area, without binding rules on indefinite detention. In this case, Mueller appears upset that the military would get first crack at these terrorist suspects rather than the FBI. So there is no nobility here. But the result could be the one civil liberties defenders advocate: a veto of the NDAA.

Let’s just review where we’re at, then. The government could shut down on Friday. The parties are far apart on a bill to avoid the expiration of a payroll tax reduction and extended unemployment benefits, both of which would create a fiscal drag of up to 1% of GDP. Doctors will see a 27% cut in their reimbursement rate for Medicare on January 1 if nothing is done. And the one area where the parties agree, this defense authorization bill, is likely to draw a Presidential veto.

It’s such a wonder why Americans hold no faith in their government.

Record High Anti-Incumbent Sentiment Toward Congress

by Frank Newport, Gallup

December 9, 2011

PRINCETON, NJ — About three-quarters of registered voters (76%) say most members of Congress do not deserve re-election, the highest such percentage Gallup has measured in its 19-year history of asking this question. The 20% who say most members deserve to be re-elected is also a record low, by one percentage point.

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A substantial majority of Republican (75%), independent (82%), and Democratic (68%) voters agree that most members of Congress do not deserve re-election — a sign of rare consensus about the legislative body in which both parties currently hold a leadership stake.

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How this antipathy toward Congress plays out in next year’s congressional elections remains to be seen. Americans were not as negative last October, before the 2010 midterm elections, yet voters flipped 63 seats from Democratic to Republican control and gave the House to the GOP in the process. This was the largest seat gain by any party since 1948.

More evidence that "independents" don’t "swing"

thereisnospoon, Hullabaloo

Monday, December 12, 2011

“(I)ndependent” voters don’t shift party allegiance from election to election, so much as stay home out of apathy and to punish their preferred party for not doing its job.

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Pollsters looking to see how to “win back” so-called “independent” voters will often do focus groups with people who crossed party lines from one election to another–say, those who voted for Barack Obama in 2008 but then voted for Republicans in 2010. They then analyze the data they get from those people to tell Dem politicians like President Obama what they must do to “win back” those independents.

But this is the wrong way of going about it. Sure, those “switcher” voters are out there. But they’re dwarfed in number by the people who hold an allegiance to the Democratic Party and progressive principles in general, and may have voted in the big presidential election of 2008, but failed to turn out to vote in 2010. That’s a much bigger cohort–and not only is it bigger in size, it’s more winnable and courting it doesn’t create resentment and anger within the Party base.

…

Smart Democratic consultants would do well to do focus groups with Dem voters from 2008 who stayed home in the midterms, and aren’t sure whether they’re likely to come out in 2012. See what is driving their anger and apathy, and what they want in terms of policy and message. And then insofar as decisions are made based on focus groups and polls, tailor the message to those people. My suspicion? You’ll find a lot of those very sorts of people at Occupy protests around the country.

Update:

President Will Not Veto Defense Authorization Bill, Despite Detention Provisions

By: David Dayen, Firedog Lake

Wednesday December 14, 2011 1:32 pm

After its FBI Director told Congress that the revisions to the defense authorization bill did not satisfy his concerns with the bill, the White House issued a statement of Administration policy saying that they would not veto the bill, despite an earlier threat.

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(T)he changes do offer a variety of possible loopholes for the executive branch to carry out counter-terrorism policy as they see fit. Military custody is no longer “required” in the bill, and FBI policies are nominally preserved, though in a strange way that would seem to be impossible to implement. The President has a few extra pieces of discretion to take terrorist suspects out of military custody and into an interrogation process outside military purview. In addition, federal courts could still be used for terrorism cases.

Remember that the White House has little problem with indefinite military detention. They just want to be able to dictate when it gets used and on whom. So they obviously see enough flexibility here to carry out unconstrained intelligence gathering and detention policies.