Whistleblowing, Anonymity, and Impeachment

Donald Trump and the Republicans want to out the anonymous whistleblower who first reported

on the president’s telephone conversation with the Ukrainian president.  Exposing him along with subpoenaing Hunter Biden in the Trump inquiry are at the heart of Trump’s impeachment defense.
The demand to call Biden is diversionary.  By that, try to argue he did something wrong as  an excuse for the president’s demand that Ukraine investigate Biden.  Besides the fact Hunter Biden  was already investigated and cleared, even if he did do something wrong it does not excuse the president’s behavior.  He called on another country to investigate a political opponent and conditioned military aid on it.  This is either abuse of power or a violation of federal campaign laws,  both possible causes of impeachment.
Two, part of the demand to expose the whistleblower is legal–asserting that constitutional  due process demands that the  president has a right to confront his accuser.  This argument fails for an obvious reason–impeachments are not criminal inquiries.  No less an authority than Alexander Hamilton in Federalist number 65 made this point.   The criminal due process protections of the Bill of Rights do not apply.  Two, even if exposed it would not matter because other sources and testimony have independently corroborated the whistleblower’s original report.
But more important, the purpose in outing the whistleblower is simple–we hate snitches.  In labeling the whistleblower as a traitor hits at a culturally deep seated belief in American society. From the time we are very young the most dreaded thing to be called is a tattletale, fink, or stool pigeon.  Remember times in school when someone threw an eraser and the teacher asked who threw it?  No one confessed and all of you detention.  You sat there thinking it was unfair but you never dared raise your hand and snitch on who did less recess would not have been pretty for you that day.
The point is that culturally we hate snitches and Trump is trying to play on the hate.  One of my professors Edward Weisband long ago pointed this out in his Resignation in Protest.  In the US we claim to care about ethics, integrity, and individualism, but then punish the principled public official as disloyal or not a team player who exposes the corruption.  The way to evade culpability for corruption is to expose  the whistleblower, argue he is disloyal, and therefore discredit him.
In attacking and exposing the whistleblower something more dangerous is being undermined–the historical importance of encouraging individuals to report fraud and abuse, often with the need to guarantee anonymity in order to prevent the very type of retaliation that Trump and the Republicans are trying to do.  Dating back to the early days of America, in 1777 Congress passed a law encouraging members of the military to report to them suspected cases of prisoner abuse.  The 1863 False Claims Act encouraged reporting of profiteering and abuse during the Civil War.    The Sarbanes-Oxley Act of 2002 created mandates in the private sector for anonymous reporting of suspected illegal behavior in the corporate world.  The 2010  Dodd-Frank law strengthened these provisions.  Finally, the Inspector General Act of 1978, the Intelligence Community Whistleblower Protection Act of 1998, and the Whistleblower Protection Enhancement Act of 2012  all were adopted to encourage the exposure of political corruption within the federal government.  In many cases, they guarantee the anonymity of the whistleblower.  They do so to prevent reprisals and attacks against them because we hate tattletales. 
American history thus shows the importance of laws to encourage whistleblowing.  Exposing  corruption and abuses of power is critical to the promotion of a free society.  The Trump-Republican  attack on the legal protections afforded to whistleblowers is powerfully shortsighted, both in terms of how exposing this specific whistleblower will not alter the case against Trump, but also in terms of the damage it does to exposing improper and perhaps illegal behavior in government.

Pity the Banker: The Lessons of Financial Meltdown

“Which is the greater crime, to rob a bank or own one?

–Bertold Brecht

“I'm pleased to offer a full repeal of the job-killing Dodd-Frank financial regulatory bill.”

–Michelle Bachmann

            It must be tough times to be a banker.  If one listens to the likes of Michelle Bachmann and the Wall Street Journal crowd the federal government is simply picking on banks too much.  The government so over-regulates the banks that they can no longer make money.  Regulations such as Sarbanes-Oxley (passed in 2002 in response to significant corporate fraud and financial misstatements on Wall Street in companies such as Enron, Credit Swiss, and Arthur Andersen among scores of others) and Dodd-Frank (passed in 2010) to address Wall Street financial self-dealing , conflicts of interest and gambling) are job killers draining down the economy.  Obama is Wall Street’s public enemy number one, with record amounts of their money directed at opposing his re-election after record amounts of their money endorsed his candidacy in 2008.

            All of this pity for banks seems so ironic, and wrong.  Bachmann, as she is prone so often to, proves she don’t know much about history as Sam Cooke once sung, and the Wall Street sympathizers have forgotten the role of the banks in bringing about the worst economic crashes in American history.

            One does not have to go back to the Credit Mobilier scandal of the 1870s in the US which involved the self-dealing of construction contracts by a major bank in building of railroads.  Nor does one have to go back to the roaring 1920s when banks so speculated on securities that their behavior helped precipitate Black Friday and the Depression.  It was this speculation which lead to banking reform in 1933 including the Glass-Steagall Act which created the Federal Deposit Insurance Corporation (FDIC) to ensure depositor’s money and separated investment bankers (those that speculate in securities) from commercial banks (which do mortgages).  Instead, one needs only to look at more recent history to see how banking and Wall Street speculation has wrought economic destruction in America...and across the world.

            The American economy crashed in 2002 after “irrational exuberance” of late 1990s revealed that many companies such as Enron and WorldCom simply lied about their financial health.  Jeffrey Skilling and Bernie Ebbers among others simply lied to the SEC and investors about their finances.  Cynthia Cooper, former chief auditor for WorldCom tells of the misdeeds in Extraordinary Circumstances and the movie/book The Smartest Guys in the Room tells the same at Enron.  Enron financial manipulation was amazing, bankrupting California, bringing down its governor, and wiping out the savings of tens of thousands of investors and employees.  Because of these scandals Congress adopted Sarbanes-Oxley to require companies to impose controls to make sure their balance sheets were accurate, requiring CEOS and CFOs to swear under penalty of perjury that their SEC reports were true and accurate.

            And then it all hit the fan in 2008.  Investment banks, speculating on mortgages and on Wall Street as a result of repeal of Glass-Steagall by the Gramm-Leach-Bliley Act in 1999, extended sub-prime loans to many individuals, often without income verification, sold off the loans to the secondary mortgage market, and then used the proceedings to gamble on Wall Street.  All of the collapsed in 2008 when the bets came due, banks lacked the resources to cover their losses, and the economic crash spread around the world. 

            The Bush presidency offered TARP to bail out the banks and the Obama administration followed up with trillions in credit and loans to help Wall Street.  In fact, Obama was perceived by Wall Street as their savior, bestowing on him record amounts of cash to help him win election.  Obama was the best friend Wall Street could have at the time.  Banks got bailed out ahead of consumers and homeowners and profitability was restored to the financial sector.   Moreover in a effort to prevent some of the worst excesses from returning Congress passed Dodd-Frank in 2010 which imposed minimal new regulations and order to banks and investment houses.

            For all of this, banks and Wall Street demonstrated their gratitude by turning on him.  They accused Obama of using a rhetoric that made them the enemy.  They were instead simply innocent victims of federal regulatory excess.  They were being robbed at gunpoint by federal regulation.

            But look at where banking and Wall Street is today.

            *          Jamie Dimon and JPMorgan fraud on trading hits $5.8 billion

            *          Barclays and other banks have manipulated Libor (London Interbank Offered Rate)

            *          Wells-Fargo agrees to a record payout to settle charges of race discrimination in their steering of people of color to sub-prime loans.

Yet despite these scandals, the Financial Times also notes how Wells-Fargo and JPMorgan have economically recovered, with the former experiencing a 17% increase in second quarter profits.

            Banks and Wall Street today are again solvent thanks to trillions of tax dollar credits and investments.  Many are experiencing record profits, yet many are also continuing to speculate, self-deal, or engage in other anti-social behavior.  And then there is the call for repeal of Sarbanes-Oxley and Dodd-Frank and the ouster of Obama from the presidency.  Biting the hand that feeds them is the understatement of the year.

            Recent news events point not to the need to weaken regulation but to the imperative to do even more.  Banks and Wall Street still lack the oversight and controls necessary to ensure that they serve the interests of the American public.  Restoring Glass-Steagall, further limits on self-dealing, more Wall Street prosecutions, use of anti-trust laws, and even more serious consideration of public control of credit are needed if we want to ensure that the financial sector serves the interests of the people and investors and not simply those who run those institutions.