Someone needs to tell Congress that Bills of Attainder are unconstitutional
By Nick Ragone | Related entries in News
Let me see if I have this correct: The administration knew about the AIG bonuses weeks ago and chose to do nothing about it for fear of legal challenges from AIG. Legal challenges. From a company that the government owns.
In fact, Tim Geithner was so afraid of lawsuits that he made Senator Chris Dodd (who seemingly forgot this) change the language in the stimulus bill so that is specifically allowed for these types of bonuses.
Then when the public goes nuts — and rightfully so — the administration back tracks, saying they’ll do anything within their power to get the money back.
Which leads us to this insanely stupid idea — which the House passed overwhelmingly yesterday — to levy a 91 percent tax against the bonus recipients.
Do we really want the Federal government targeting private individuals to retroactively punish them for something that they weren’t necessarily responsible for? Yes, they received the bonuses, but it was AIG’s board and management — along with a complicit Tim Geithner — that made this happen.
The Constitution specifically prohibits “Bills of Attainders” — basically laws that are intended to punish private citizens for past wrong doings without a trial. The Founders feared that legislature could get around jury trials by simply punishing citizens through retroactive legislation. In a sense, that’s what’s happening here. And it’s plain stupid.
The time to prevent these bonuses were weeks ago … when Geithner knew about it, and hadn’t handed out the latest round of bailout dough. Having Congress punish the recipients retroactively is stupid, dangerous, and a waste of time because it’s unconstitutional.
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March 20th, 2009 at 7:35 am
Nick,
I agree that this is a horrible precedent to set, and that Congress is really just diverting our attention from what’s really important here, but as far as the Constitutional arguments go, I’m afraid that it isn’t quite so cut and dry:
http://tinyurl.com/d23sft
March 20th, 2009 at 7:50 am
Oops, bad TinyURL..
Heres the right one:
http://tinyurl.com/d89m7v
March 20th, 2009 at 8:18 am
If there is enough gray area in the Constitution to find a “right to privacy”, then my guess is that there’s enough gray area to think of this AIG tax as first cousin of a bill of attainder.
March 20th, 2009 at 8:29 am
This has nothing to do with bills of attainder. A bill of attainder declares a person or people guilty of a crime and punishes them without a trial. Levying a tax on bonus payments doesn’t declare anyone guilty of any crime.
March 20th, 2009 at 8:38 am
I agree that all this outrage focused on the AIG bonuses is misplaced. The bonuses amount to one tenth of one percent of the money AIG received. In addition, I think it’s a distraction. Congress really needs to be focusing on the bigger picture issues right now.
Still, I’m not sure the law is unconstitutional, for reasons cited Doug.
March 20th, 2009 at 9:06 am
What’s stupid is not going over the bonuses, as well as calling the re-taking of those bonuses “punishment.”
If I am at an airport and I pick up a bag that belongs to me, and people make me give it back: is that punishment?
Use common sense, dude.
March 20th, 2009 at 9:09 am
Oops, let me try that again without typos. :p
—————————
What’s stupid is not giving over the bonuses, as well as calling the re-taking of those bonuses “punishment.â€
If I am at an airport and I pick up a bag that doesn’t belong to me, and people make me give it back: is that punishment?
Use common sense, dude.
March 20th, 2009 at 10:39 am
Jazz,
If that bag contained money that was to be considered part of your compensation package, and that amount was agreed upon by the individuals who negotiated your employment package with you, then, yes, taking it from you is punishment.
March 20th, 2009 at 12:14 pm
Folks views are going to range widely depending on whether they care more about process or product. End vs means, in other words. I don’t do principles in that argument, I weigh both case by case.
Obviously it would have been superior if this were all handled perfectly with flawless foresight. Never hold your breath waiting for that, folks. The way I look at it is that AIG would have collapsed without gov’t intervention, in which case the bonuses would not have been paid or would have been subject to re-negotiation in bankruptcy court. So if they end up getting rescinded via a baroque keystone cops process, rescinded is IMO still better than let to stand.
And it boggles the mind to think that the particular way in which the gov’t bailed out the company ought to matter much. Again, unless you worship process. Which lawyers do, BTW.
I am sympathetic to those who wish to protect the relative sanctity of the contract. But the fact is that in the real world the enforceability of contracts is already somewhat fungible, subject to various variables including lots of forms of power and coercion that exist well outside the bounds of signed papers.
So if current congressional actions in fact set a potentially dangerous precedent, I am not all that perturbed if we must therefore limp along without a slightly more diminished sanctity for contracts. We’ll live.
Folks who want to protect contract sanctity and are arguing against these actions seems to suggest that it will lead right down a slippery slope to a world where the terms of legal contracts will become practically optional.
That feels like rank hyperbole to me, Again, we’ll keep limping.
Rich, suppose for the sake of argument we grant that its punishment. Then we can move on to whether or not such punishment is deserved, right?
Ultimately if these folks are denied these bonuses, it’ll be because the recipients were judged morally undeserving. This does not seem to me to be all that terrible an outcome, the questionable moral character of the gov’t bumbling actions notwithstanding.
Further, I wonder what unstated constraints exist upon the folks who are being denied these bonuses should they decide to contest this outcome. First, they’ll get the public cavity search, where everyone gets to see how richly they profited while constructing complex and unstable investment vehicles that helped collapse the economy. Then, while plaintiffs are dragging this through the courts, enterprising government lawyers get to pore over all the possible angles for finding criminal actions on the part of these folks, probably along the lines of fraud and negligence.
If I were one of the folks who got the really big bonuses, I would be RUNNING to give it back. WAY better to let my combative and unrepentant buddy who insists on his right to the bonus be the public fall guy that goes in the history books in an orange jumpsuit.
March 20th, 2009 at 12:45 pm
Rich,
Your addition of new details into the analogy are unnecessary and not analogous. Let’s work with the assumption of the article that taking back the money is punishment. If that’s punishment, then what would be jailing the AIG execs: a death sentence, murder? Since we’re upgrading the effects of all laws by some paranoid standard, we can see that calling it “punishment” is dishonest hyperbole.
Also, just to give a thorough debunking of your retort, let’s say we did add in your additions to the analogy. Let’s say that bag I picked up is worth $100 and it’s the companies bag. Let’s also add in that I now own 80% of the company, I’ve given the company $10,000 to bailout the failing company, and I also have legal power to seize any bags that are on the premises. So, like AIG, the other party has no right at all to the bag.
* We own AIG
* The Constitution gives the power to tax the bonuses at 90%
* The bastards don’t deserve the bonuses anyway
March 20th, 2009 at 12:50 pm
If exercising your rights as a owner of an entity is punishment, then everything is punishment. The price of milk going up is punishment by the dairy farmers. The store clerk being laid off is punishment of him. By this BS definition of “punishment”, everything is punishment. You can’t just re-define the English language and lie when you get mad.