U.S. Civil Rights Commission

Dodd-Frank Financial “Reform” Violates Property Rights and Equal-Protection Guarantees

by Hans Bader on January 9, 2011 · 2 comments

in Bailout Watch, Economy, Legal, Property Rights, Regulation

Last week, I described how the Dodd-Frank financial “reform” law passed last summer violates constitutional separation-of-powers safeguards by giving unaccountable bureaucrats the power to seize companies and legislate through administrative fiat.  But that is not the only way Dodd-Frank violates the Constitution.  It also violates property rights and equal-protection guarantees.

For example, it contains racial preferences that were criticized by members of the U.S. Commission on Civil Rights. It “imposes race and gender employment quotas on the financial industry,” noted economist Diana Furchtgott-Roth in the Washington Examiner. Its ”Section 342 states that race and gender employment ratios must be observed by all government agencies that regulate the financial sector, as well as private financial institutions that do business with the government.”

This unconstitutional requirement is the brainchild of Los Angeles Congresswoman Maxine Waters, the Castro-loving, left-wing ideologue who earlier praised the Los Angeles race riots that destroyed scores of Korean-owned businesses as an “uprising” against injustice. Waters once told a CEO in a public Congressional hearing, “This liberal will be all about socializing . . . .uh, uh . . . would be about, basically, taking over and the government running all of your companies.”

Law Professor Richard Epstein notes that Dodd-Frank is also an unconstitutional “taking” of private property, since it deliberately forces certain banks to process debit card transactions at a loss. (That provision is being challenged in a lawsuit called TCF Bank v. Bernanke. Debit cards did not contribute to the financial crisis in any way, but Dodd-Frank regulates them at the behest of large businesses that objected to being charged any fee by banks for processing debit card payments. Thanks to Dodd-Frank, some customers will now be charged annual fees for their debit cards.)

Dodd-Frank itself contains little “reform,” reinforcing the very features of the status quo that spawned the financial crisis.  Congressional Democrats blocked a GOP amendment that would have reformed the government-sponsored mortgage giants, Fannie Mae and Freddie Mac, and the Obama administration lifted a $400 billion limit on bailing them out and showered their executives with $42 million in pay — even though Treasury Secretary Geithner has admitted that “Fannie and Freddie were a core part of what went wrong” in the financial crisis.

Fannie and Freddie helped spawn the mortgage crisis by buying up risky mortgages and repackaging them as prime mortgages, thus creating an artificial market for junk: “From the time Fannie and Freddie began buying risky loans as early as 1993, they routinely misrepresented the mortgages they were acquiring, reporting them as prime when they had characteristics that made them clearly subprime.”

At the direction of the Obama administration, Freddie Mac ran up more than $30 billion in losses to bail out mortgage borrowers, some of whom had high incomes. Federal regulators sought to make Freddie Mac hide the resulting losses from the SEC and the public.

Dodd-Frank is not unique in containing racial preferences. Many bills backed by Obama are riddled with racial set-asides, including the health care law passed last year. Obamacare has attracted criticism from the U.S. Commission on Civil Rights for containing both racial preferences and lower standards for treatment in predominantly-minority institutions, potentially harming both white applicants and minority patients. This racial discrimination appears to violate court rulings like the Supreme Court’s Adarand decision, and the Rothe and Western States Paving decisions issued by the federal appeals courts.

Civil Rights Commission Criticizes Obama Health-Care Plan’s Racially-Discriminatory Affirmative Action

by Hans Bader on August 12, 2009 · 2 comments

in Healthcare, Legal, Personal Liberty, Politics as Usual, Sanctimony

The U.S. Commission on Civil Rights says Obama’s health-care plan is racially discriminatory. The House health-care bill backed by Obama is filled with “sections that factor in race when awarding billions in contracts, scholarships and grants” and give “preferential treatment to minority students for scholarships.” Taxpayers of all races will end up paying more because of these arbitrary racial preferences. The Civil Rights Commission has concluded that this racial discrimination is unjustified, and that it will neither “reduce health care disparities among racial and ethnic groups,” nor “improve health care in underserved areas.”

Earlier, I wrote about other provisions backed by Obama that would mandate affirmative action in health care to promote “cultural competence” — whatever that means — and fund left-wing community organizers. “ObamaCare” also contains preferences for illegal aliens, who are exempt from its taxes and penalties, but can access its benefits due to lack of eligibility verification safeguards. The safeguards were blocked by liberal lawmakers allied with Obama.

Historically, affirmative action did not apply to health-care in general, only to employment, education, and government contracts, although Obama has advocated expanding it to health-care in his published writings. When critics of affirmative action passed state constitutional amendments banning racial preferences in California, Michigan, and Nebraska, they applied such bans only to “employment,” “education,” and “contracting,” because it never occurred to them that anyone would advocate affirmative action elsewhere. But Obama seems determined to go further than any other president in pushing affirmative action. In his 2006 book “The Audacity of Hope,” he advocated race-based “affirmative action” in the form of “targeted programs to eliminate existing health disparities between minorities and whites.”

Earlier, the Civil Rights Commission chided the Obama Administration for letting an Obama poll-watcher and Democratic official get away with racist voter intimidation against non-black voters in Philadelphia (even though they were caught on videotape wielding a nightstick and using racial epithets) and for backing a hate-crimes bill designed to allow people who have been found innocent of hate crimes in state court to be reprosecuted all over again in federal court.

One of Obama’s own advisers says the Obama Administration’s health-care plan will harm people with insurance while raising their taxes. ObamaCare will take away 5 important freedoms, notes a CNN commentary. It will also destroy many affordable health-care plans while breaking Obama’s campaign promises.

U.S. Civil Rights Commission Opposes Federal Hate Crimes Bill on Double Jeopardy and Civil Liberties Grounds

by Hans Bader on June 18, 2009 · 1 comment

in Legal, Personal Liberty, Politics as Usual, Sanctimony

The U.S. Commission on Civil Rights has decided to oppose the federal hate-crimes bill. The Commission calls the bill a “menace to civil liberties” because “its most important effect will be to allow federal authorities to re-prosecute a broad category of defendants who have already been acquitted by state juries.” Thus, it will erode protections against double jeopardy.

In deciding to oppose the bill, the full Commission agreed with the position earlier taken by four individual Civil Rights Commissioners, who sent a letter to House leaders on April 29 opposing the bill. The House approved the hate-crimes bill on a partisan 249-to-175 vote.

Earlier, the Washington Blade and Christian Science Monitor reported that the Senate would likely approve the hate-crimes bill this week, by attaching it to a totally unrelated bill, the Travel Promotion Act. That was a strange legislative tactic, designed to keep Senators concerned about the broad reach of the hate-crimes bill from even having the opportunity to amend its provisions or fix its flaws.

As civil libertarians have noted, the hate-crimes bill’s supporters want to allow people who have been found not guilty in state court to be reprosecuted all over again in federal court. A recent example is a commentary by the Leadership Conference on Civil Rights on May 5 blog entitled, “Pennsylvania Teenagers Acquitted of Hate Crime; Federal Law Needed.” It approvingly quotes the General Counsel of the Mexican American Legal Defense and Educational Fund arguing that the federal hate-crimes bill is needed based on not-guilty verdicts like the recent acquittal in state court of teenagers accused of a hate crime against an illegal alien from Mexico. MALDEF and the Leadership Conference on Civil Rights are not alone in seeking to reprosecute people found innocent in state court. Many supporters of the hate crimes bill want to allow those found innocent to be reprosecuted in federal court. As one supporter put it, “the federal hate crimes bill serves as a vital safety valve in case a state hate-crimes prosecution fails.” The claim that the justice system has “failed” when a jury returns a not-guilty verdict is truly scary and contrary to the constitutional presumption of innocence and the right to trial by jury.

But it is a view widely shared among supporters of the hate-crimes bill. Syndicated columnist Jacob Sullum pointed out in 1998 that Janet Reno, Clinton’s Attorney General, backed the bill as a way of providing a federal “forum” for prosecution if prosecutors fail to obtain a conviction “in the state court.”

Supporters of the hate crimes bill also see it as a way to prosecute people even in cases where the evidence is so weak that state prosecutors have decided not to prosecute. Attorney General Eric Holder has pushed for the hate crimes bill as a way to prosecute people whom state prosecutors refuse to prosecute because of a lack of evidence. To justify broadening federal hate-crimes law, he cited three examples where state prosecutors refused to prosecute, citing a lack of evidence. In each, a federal jury acquitted the accused, finding them not guilty.

Advocates of a broader federal hate-crimes law have pointed to the Duke lacrosse case as an example of where federal prosecutors should have stepped in and prosecuted the accused players — even though the state prosecution in that case was dropped because the defendants were actually innocent, as North Carolina’s attorney general conceded, and were falsely accused of rape by a woman with a history of violence (including trying to run over someone with her car) and making false accusations.

Given the politically-charged nature of many hate-crimes trials, Kimberly Potter of New York University was probably right when she told Congress back in 1998 that if the federal hate crimes bill is enacted, “the acquittal of defendants in state court will frequently trigger demands for federal prosecution.”

The hate-crimes bill also violates constitutional federalism safeguards, such as the Supreme Court’s decision in United States v. Morrison (2000).