Monday Jun 24

MONEY MATTERS - Liles Burke and the Get Outta Jail Free Card for Tax Cheats and Money Launderers

As a public school kid, I’d just graduated from UC Santa Cruz, a brand spanking new campus that was perfectly timed for the late sixties. We had a ball exploring parent-free quasi-adulthood, protesting, experimenting, enjoying the early years of oral contraceptives, and on the side, learning. It was a rich time in every way but financial. (UC in those years was astonishingly cheap, by the way.) Graduating in 1970, I got my first “real job” working for the Center for Community Change in DC and moved in April with just an independent study project to finish. Two things impressed: heat and humidity. Oh, and the overwhelming sense that to do something in the political world, as well as to get on track to make a decent “professional” income in the future, becoming a lawyer was the ticket. With that in mind, I joined a volunteer group studying the broadcast industry under the banner of Nader’s Raiders, the moniker given to Ralph Nader’s legions of activist students and young lawyers seeking reform through the legal system.

Law in the late sixties and early seventies was THE vehicle through which law-abiding folks pushing for social and economic justice could make their case. From their lofty perch atop the system, the Supreme Court was a venerable institution that had finally brought the curtain down – at least part way – on the demoralizing effects of Jim Crow laws that perpetuated harsh racism for the century following the end of the Civil War. Under JFK and Lyndon Johnson, Congress followed suit with the Civil Rights Act and the Voting Rights Act. Even Richard Nixon got in the act with the first environmental laws to be signed: Clean Air Act and Clean Water Act, along with the creation of the EPA. It was clear to any of us in that era that the law sat above politics and provided the possibility that the powerless could prevail against determined establishment counterforces.

Of course, lawyers served both sides of legal conflicts, and there was a clear distinction between those who entered the profession for money, and those who sought more altruistic ends. But to the discerning eye of a 20-year-old, one could act with moral purpose and make a decent living, or so it seemed. Thus, in 1971, after finishing a one-year Master’s program at the Eagleton Institute at Rutgers, I took the LSAT and applied to several law schools in the course of which I received a competitive scholarship to NYU. In the end, my father’s cancer diagnosis saw me postpone a legal career in order to move back to California and set me off on a different path, never to return, but I retained my deep respect for the law and for its use as a tool for progressive change.

It is ironic to me that in the same year (1971) I was applying to join the legal profession, a now infamous memorandum was penned by Lewis F. Powell and addressed to the den of corporate political power in DC at the time – the U.S. Chamber of Commerce, still a powerful voice for corporate interests. Less than two months later, Powell was nominated to the Supreme Court by Nixon.

The memo begins with these rather startling statements:

No thoughtful person can question that the American economic system is under broad attack….There always have been some who opposed the American system….

But what now concerns us is quite new…We are not dealing with sporadic or isolated attacks from a relatively few extremists….Rather, the assault on the enterprise system is broadly based and consistently pursued.

The sources are varied and diffused. They include…the Communists, New Leftists and other revolutionaries who would destroy the entire system, both political and economic.

Powell goes on to assert “…the single most effective antagonist of American business is Ralph Nader….” And then he quotes Fortune magazine to describe Nader’s “hatred” of “corporate power.” Fortune posits that Nader’s disaffection for business is because they are “…defrauding the consumer with shoddy merchandise, poisoning the food supply with chemical additives, and willfully manufacturing unsafe products that will maim or kill the buyer.” It’s worth noting that Nader’s book describing the auto industry’s doomed effort to resist safety measures, namely seatbelts (Unsafe at any Speed), had been a best-seller five years prior to Powell’s memo, and the even worse scandal with Ford’s Pinto was not to unfold for another 4 years. Turns out that those Blue-Chip execs were doing exactly what Nader was concerned about. Now, as we watch decades-long efforts to ban cancer-causing glyphosate (Round-Up) come to fruition, the pattern of what I call “corporate sociopathy,” where they avoid responsibility unless and until someone brings the hammer down on them, seems about as clear as day.

The Powell memo is probably the best place to start in thinking about the now apparent success of right-wing strategies to capture the judicial system – a 53-year effort that reached its apex during the first Trump administration when Mitch McConnell orchestrated the complete capture of the Supreme Court in a nakedly partisan manner. Republican presidents have now replaced jurists like Thurgood Marshall and Ruth Bader Ginsberg with Clarence Thomas, Gorsuch, Kavanaugh, Alito, and Amy Coney Barrett who join the Louis Powell clone, Chief Justice Roberts. To the extent that the federal judiciary signals the direction of the “third branch,” I think we can safely say relying on the courts to restrain the slow dismantling of a functioning federal government is at best unwise. Foolhardy might be better. But make no mistake about it: Leonard Leo and his various dark money entities have succeeded in buying the US judicial system, and with the Supreme Court now backstopping their every move, the idea that we are “all equal under the law” is becoming a harsh joke. If you are rich, you can litigate indefinitely using every opportunity to exploit loopholes until everyone else tires. They are turning the law on its head, often motivated by a craven desire for profit. If this is Christian nationalism come to roost, we are more in jeopardy that the talking heads would ever admit.

As we hear about the Supreme Court rewriting the 14th Amendment in Trump’s favor, yet another of a thousand cuts was made to the “rule of law,” similar in some ways to the GOP-led efforts to deprive the IRS with either the people or funds it needs to pursue tax evaders – virtually all of whom are among the 1%. In this case, yet another Trump-appointed federal judge, one Liles Burke presiding in the Northern District of Alabama, decided that the Corporate Transparency Act (CTA) – a part of the Trump-vetoed National Defense Authorization Act for FY 2021, a veto overridden by Congress on January 1st, 2021 – was unconstitutional. The purpose of the CTA was to unmask the shell corporation game that feeds money laundering and criminal subterfuge. It requires businesses to report on so-called “beneficial owners,” in other words those who own or control the shell company which prior to the CTA were hidden from view. Its intent was to support efforts by the financial crimes unit in the Treasury Department that pursues illicit laundering.

The twisted logic of rightwing jurists is becoming more and more apparent. Having opened up the dark money spigots, yet unable to win policy arguments in Congress, they simply revert to friendly courts and have laws or policies ruled “unconstitutional.” Simple. In this case, the judge decided that by requiring businesses to name their owners was Congressional overreach. I’m not sure he’s read the same Constitution I have, but right there in Section 8 of Article 1 it says Congress shall have the power to, “regulate Commerce…” Seems kinda clear, no? And that’s without even getting into the crazy rightwing notion – now part of our legal system – that corporations are “people,” but now this guy wants the corporation people to be able to keep secret who the “people people” are that really own the darn thing. Oy!

And who is to say the world ISN”T flat….