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According to the New York Times, the Treasury Department is pushing a plan which broaden and deepen the reach of the federal government into America's financial markets:
According to a summary provided by the administration, the plan would consolidate an alphabet soup of banking and securities regulators into a powerful trio of overseers responsible for everything from banks and brokerage firms to hedge funds and private equity firms.
While the plan could expose Wall Street investment banks and hedge funds to greater scrutiny, it carefully avoids a call for tighter regulation.
The plan would not rein in practices that have been linked to the housing and mortgage crisis, like packaging risky subprime mortgages into securities carrying the highest ratings.
The plan would give the Fed some authority over Wall Street firms, but only when an investment bank’s practices threatened the entire financial system.
And the plan does not recommend tighter rules over the vast and largely unregulated markets for risk sharing and hedging, like credit default swaps, which are supposed to insure lenders against loss but became a speculative instrument themselves and gave many institutions a false sense of security.
Parts of the plan could reduce the power of the Securities and Exchange Commission, which is charged with maintaining orderly stock and bond markets and protecting investors. The plan would merge the S.E.C. with the Commodity Futures Trading Commission, which regulates exchange-traded futures for oil, grains, currencies and the like.
All of which may sound good now, in the heat of the moment. But so did Sarbanes-Oxley ("SOX") when it was first proposed -- and according to UCLA law professor Stephen Bainbridge, the results haven't been great: "The lesson is that when something MUST be done, the best thing to do may be nothing. Not, to be sure, the politically wise thing, but the right thing. Unfortunately, we’re in the same sort of environment that led to SOX."
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So it just comes down to different judgments about the proper weighing of the costs and benefits of publication. Marty thinks that the legal arguments are bad (high benefit from publication) and suspects that the secrecy of the NSA program was not important (low cost from publication). I don't think that the legal arguments are as bad as he does (for another day...) but, even assuming he is right, it remains the case that he believes that if the benefits of secrecy were high enough, the Times should not have published. Hence the rebuttable (sorry, "almost irrebuttable") presumption. Because Marty admits that he does not know whether the harm caused by disclosure of the program was significant or not, he cannot say whether the presumption was rebutted. So on the merits, Marty is in no position to say that this is an "easy case."
Still, I take his view to be that even if we can't know whether this was an easy case on the merits, the evidence suggests that it was an easy case for the Times, which presumably understood the harm that would be caused by the program's disclosure. Marty takes Lichtblau at his word that the government failed to give The Times persuasive information (new, secret information?) that the harm caused by disclosure would be significant. However, the Times' behavior—the 13 month delay before publication—suggests otherwise. Even on Marty's interpretation of Lichtblau, the Times believed that the national security reasons for holding off publication of the story that the U.S. government was spying on thousands of Americans were justified, until it learned that U.S. government officials had doubts about the program's legality. So the Times anyway did not think the national security argument was trivial. It thought that this argument was good enough to withhold the story that Americans were being spied upon, but not good enough to withhold the story that Americans were being spied upon illegally. This might have been the right decision, but an easy case?
Only if one trusts the Times' judgment about the national security risks and only if one puts tremendous weight, as Marty does again and again, on the weakness of the legal justification for the program. If we don't trust the Times' motives, we are back to the "who decides" question with which I began. Marty uses a lawyer's trick in order to evade the most serious weakness in his argument: that (as he admits) he doesn't know the magnitude of the harm caused by the disclosure and that (as he doesn't admit) we don't know whether the Times' own judgment on this issue was reasonable. This trick is to assert presumptions that favor an outcome that reflects one's normative position. For Marty, what we do know (that the administration broke the law or that the Times plausibly believed that it did) creates the presumption in favor of disclosure. Mere uncertainty (about the magnitude of the harm or the Times' view about the magnitude of the harm) can't, for a lawyer, overcome a presumption. Q.E.D. This is a recurrent tactic in security versus civil liberties arguments like this one.
But there is no reason to assert the presumption in favor of disclosure. One can just as easily argue that the Times should have treated (or did treat) the government's national security justification of the program as creating a presumption against publication that could be rebutted with evidence that failure to disclose would cause significant harm. (I would prefer to see the harm characterized in terms of actual people injured by the activity; Marty claims to be more concerned about the abstract harm of illegality, as if this alone could rebut the presumption, but if he really believes this, I don't see why he would go to the trouble of converting a bunch of legal fictions about congressional intent into fact.) There is no particular reason to think that the presumption should go in one direction or another. This legalistic language just obscures the normative questions at stake: whether the Times acted properly or not, and whether it and other media can be trusted to make the right decisions in the future, when we, the public, don't know the magnitude of the harm. This is why it is so important to determine whether Lichtblau's account of the Times' decision-making process is plausible and appealing.
Finally, in response to Deborah, I recognize that courts are very reluctant to impose prior restraints on publication even for the sake of national security, and that the doctrine allows for only very narrow exceptions which would probably not apply in this case. (Yet, we still don't know what the harm was. ...) I'm raising the question whether these rules make sense anymore but I don't have a firm view myself. I don't see any reason for thinking that the media are in a better position than judges to make the correct decision (the point of discussing Lichtblau in the first place), but it may be, practically speaking, impossible to imagine the doctrine being in any other way. I do think, though, that a judge rather than the executive branch itself should make the decision whether a newspaper can go ahead with publication (how much deference the judge should give to the executive branch's reasoning is another hard question), and I don't believe that this view is inconsistent with my prior work.
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Wow, Eric, you packed a lot into that provocative opening post, and led me to read Lichtblau's how-the-media-sausage-is made story I confess I might not otherwise have read, given the day job. Call me a cynic, but I've invariably come away from such stories believing that the press operates in a deeply, deeply flawed way that is, nevertheless, probably the best among alternatives available in a democracy (modulo some more aggressive professional watchdog NGOs and welcoming suggestions of how one might sensibly deal with runaway profit motives). Pretty much left with the same sense here.
But it strikes me that the conversation so far (involving you, Marty, Orin, David, Dawn) is less about a disagreement over journalistic practices and more about this larger problem of who makes decisions on questions of legality and national security. I take it that you don't think the press should exercise much independent judgment here but rather substantially defer to the executive on questions of effectiveness (though I vigorously join Marty in rejecting your reasons why). But I was perhaps most startled by your suggestion that "in an ideal world," it would be "better for a judge, rather than a newspaper editor, to decide whether a national security program should be compromised because of doubts about its value or legality."
Setting aside all kinds of important First Amendment issues here, I'd love to hear your case for why the judiciary has comparatively greater institutional competence than the media in making such an assessment. If I hadn't read any of your previous work, I might read you as here arguing for an expanded judicial role in reviewing the national security secrecy views of the executive. But it can't possibly be so, can it?
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Eric asks a reasonable but ultimatelyt thetrical quesiton of me: do I think natinal security concerns should wiegh in the balance concerning publication? Of course national security concerns should be part of the calculus as to whether to publish. Just like he n doubt thinks concerns about legality should be weighed as well. After all, he surely knows that reporters every day refrain from publishing all kinds of interesting national security info -- such as troop positions in Iraq. But as I suggested, and Marty amplifies, it's hard to see how the concern he raises could swamp the serious legal concerns in this case. Surely Eric is not saying that any potential national security harm is enough to bar publication. And surely he realizes that by allowing a free press, given the self-selection of who goes into the journalism business, means that in such cases one might well expect the journalists to tilt in favor of publication; we have as a society created a civic culture in which publication is likely when the entire Justice Department is about to quit. (Eric does say that the disclosure prevented an effective and legal program from being put in place but he offers no evidence that this is correct -- who says the settlement reached within the Administraiton is either effective or legal other than, it appears, him and the adminstration itself?) But let's put all that aside. Eric thinks the president should be entitled to seek an injunction to stop publication and that the rules against prior restraint perhaps should be altered to favor the President if he does so. Never mind that not long ago Eric argued on this blog that: "It is easy to understand why certain political freedoms should be put beyond the arena of politics and be protected by courts. Without such rules, the party in power can entrench itself and undermine political competition. It is hard to understand the analogous arguments for constitutionalizing gun rights." But the plain fact is that the President cou;d have sought an injucntion. And the simple fact is that our elected president did not seek an injunction in this case. So the reason no judge weighed in here on whether this should have been published is that no president aksed as judge to do so. So, on Eric's own reasoning, the truly irrepsonsible actor here is none other than President Bush, right? So why take on Mr. Lichtblau?
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Guilty as charged. Yes, careful lawyer that I try to be, I did include a qualification to suggest that maybe there could, one day, be some case in which a newspaper should refrain from publishing a story about rampant illegality, affecting the privacy of tens or hundreds of thousands of U.S. persons, authorized by the President of the United States (in part on a theory that he has the constitutional authority as Commander in Chief to disregard the law). I can't just now think of what that case might be; but who knows? Hence, my assumption that the Times applied a strong, almost irrebuttable presumption in favor of publishing (once it was convinced the program was unlawful), rather than a bright-line rule. But I agree with David -- it's hard to imagine an easier case than this one.
Did the program "benefit the nation," in the sense of providing the intelligence community with relevant and important information it would not have obtained under FISA? I certainly hope so. But then, that would be true, in spades, if the President simply ignored all legal restrictions on intelligence-gathering -- an Executive unbounded by laws regulating surveillance, detention, interrogation, etc., would undoubtedly obtain far more information about the enemy than an Executive who takes care that such laws are faithfully executed.
And therefore . . . what, exactly? If that sort of "benefit" were a sufficient reason to refrain from publishing, then newspapers would never reveal any wrongdoing undertaken for security-related reasons (or for any other public purpose, for that matter). Eric doesn't suggest such a rule, of course -- he would ask the Times to weigh the benefits of lawbreaking against the "costs." I'm sure that at some level, the Times made such a calculation, based on what little they knew (i.e., as with Eric and me, not very much). Indeed, they invited the Administration to make the case that the program was legal, or that this was the rare case in which, despite the illegality of the program, the cost/benefit balance was so out of whack that my presumed "presumption" in favor of publishing a story about gross executive lawbreaking should have been rebutted. As it turns out, however, the Administration gave them very little reason to rebut the presumption -- and what it did say to the Times turned out to include representations that the Times discovered to be blatantly false, which left the Times with no reason at all to think that the presumption should be overcome -- and with a great deal of skepticism that the sky would, indeed, fall.
Callous disregard for the real costs and benefits? Hardly. What the Times knew, and what Eric conspicuously ignores, is that we as a nation had already engaged in a wide-ranging, detailed, and contested debate, over three-plus years, about the various costs and benefits of allowing the executive free reign to engage in domestic electronic surveillance, and we had reached a consensus about the proper resolution of such calculations in the manner prescribed by the Constitution: We enacted a law, by overwhelming majorities of both houses of Congress, and with the support of Presidents of both parties -- the Foreign Intelligence Surveillance Act. And Congress had repeatedly amended that law over the years whenever the executive made the case that the cost/benefit analysis had changed. (Eric confidently states that the NSA program did not, so far as we know, "actually injure anyone." This is just another way of saying that Eric disagrees with the vast majorities of Presidents, legislators and the public who have concluded that there are real harms when the government surveilles its citizens' e-mails and phone calls.)
Continue reading at Balkinization . . .
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Marty puts the case succinctly:
Has there ever been any case in which a serious American newspaper declined to publish information it had about felonious conduct at the highest levels of government? And if that meant the cessation of the program, so be it -- because the program was, after all, unlawful. Unlawful programs should be ended -- or, in any event, the Times was quite justified in acting upon a strong presumption to that effect.
But note the equivocation. He starts of with a ringing call for moral clarity-"unlawful programs should be ended." But, good lawyer that he is, he builds in a safety hatch-there should be "a strong presumption to that effect"-without absolutely committing himself to it. And why a presumption rather than a rule? Do we really need to ask the eminences at the Columbia School of Journalism, as David would advise us to do? Because there are no absolutes in this world, and in some cases-where the damage to national security would be sufficiently high, one can surmise?-The Times would not be justified in publishing the information. Whatever. Lawyers like to talk about rules-and-presumptions. I prefer to talk in terms of balancing costs and benefits. Jack Goldsmith, who can claim a measure of credibility and who has seen classified information that we have not, says: "I agreed with President Bush that revelations by Risen and Lichtblau had alerted our enemies, put our citizens at risk, and done ‘great harm' to the nation."
Marty can't deny the relevance of the benefit of the program to the question of whether The Times should report the story. After all, if the benefit of the program were irrelevant, there is no need for a presumption. Did The Times consider whether the presumption had been rebutted? If The Times had good reason to believe that the national security benefits of the program were small, Lichtblau doesn't tell us what it was.
So what are the costs of the program? Presumably, the harm to innocent people who were inadvertently (or deliberately) spied upon-but no one knows what that is. Instead, Marty emphasizes its sheer illegality-an abstract cost but a real one. But its illegality was in the process of being corrected by Justice Department lawyers before the story was released, indeed before the reporters knew anything at all (which David cleverly interprets as part of the story's newsworthiness).
Goldsmith believed that the problems of illegality could be resolved, and he and others sought to do so by working with the FISA court, restraining the executive branch, and encouraging the White House to cooperate with Congress. He believed that an effective program could be made lawful, and he and his colleagues were in the process of bringing about that result. But The Times made that particular outcome-a lawful program that was also effective because it was secret-impossible by publicizing it to the world.
Marty believes that The Times published the story because it discovered that the NSA program was illegal. I don't agree. But if Marty is right, so much the worse for The Times. I find it hard to believe that Marty thinks that destroying a plausible national security program in order to expose illegal actions that (Goldsmith believed) could have been, and soon were to be, placed on a sounder legal footing, and did not (so far as we or The Times know, so far) actually injure anyone, would be justified. Such a devotion to the forms of legality, without consideration of the practical effects of a course of action, verges on fanaticism. Marty's not a fanatic; if he were, he wouldn't have included that presumption.