Showing papers in "Law and contemporary problems in 2000"

Public Service Law: Privatization’s Unexpected Offspring

Abstract: TONY PROSSER [*] I INTRODUCTION The United Kingdom was the pioneer, if not of privatization, of a large scale privatization program extending to the public utilities: And it remains in the forefront of attempts to introduce forms of the new public management using private sector techniques in public administration. [1] One might think that this means that the role of public law, and of distinctive notions of public service embodied in law, have disappeared in those areas where privatization has taken place. Indeed, this perceived decline in public service law is the characteristic criticism of the British experience by commentators in Continental Europe. The Conservative governments of the United Kingdom certainly intended to replace hierarchical administrative controls with a marketplace in which resort to the courts on public law matters would be unnecessary. [2] In this article, however, I hope to suggest a paradox. The United Kingdom has experienced a new growth of public service law in relation to the privatized utilities. This has resulted in a convergence of the tradition of the United Kingdom and that of nations such as France and Italy, where public service has played a central role in public law, due in part to a unique rhetoric of public service in the Continental tradition. Indeed, it could be argued that the regulatory reform that accompanied privatization has made possible the development of a distinct discipline of public service law in the United Kingdom. [3] In this article, I define public service law as law designed to make basic public services available to all citizens without discrimination. This may require modification of the operation of markets and recognition of the need to compensate for substantive inequalities by providing services to the disadvantaged. Thus, public service law has both a descriptive and a normative dimension. It is descri ptive in that it is concerned with goods and services provided by institutions between the market and the state, which may include public enterprises at arm's length from government. It is normative in the sense that it is based on egalitarian rights derived from citizenship rather than an ability to bid in the marketplace. [4] My discussion of the development of a discipline of public service law in the United Kingdom will be limited to the privatization of public utilities. II THE ABSENCE OF A TRADITION OF PUBLIC SERVICE IN THE UNITED KINGDOM In marked contrast with their Continental neighbors, the British have traditionally been reluctant to enshrine requirements of public service in their system of law. During the nineteenth century, however, a relatively little-known body of common law developed to ensure access to monopoly services and to avoid discrimination in the way in which such access was provided. [5] The best-known of these cases concerned access to a dock monopoly, [6] but other examples included rights of access to ferries, bridges, and other early public utilities. [7] These cases may represent an early attempt to develop competition law in the interest of economic efficiency by minimizing market distortions created by monopoly power. Implications of this trend in the case law reached beyond competition law, however. And as Paul Craig has documented, the cases suggest the recognition of some form of public property rights triggered by the possibility of restrictions on public access to essential, but privately owned, services. [8] These cases could have supported the establishment of principles concerned with rights of equal access to public services, like those that developed in France that are described below. Indeed, in the United States, cases such as Allnutt v. Inglis were influential in forming a basis for the constitutional acceptance of utility regulation. [9] In the United Kingdom, however, they were largely forgotten, especially after the nationalization of the public utilities, culminating in the statutes of the Labour Government in the late 1940s. …

Chinese Privatization: Between Plan and Market

Abstract: LAN CAO [*] I INTRODUCTION Since 1978, when China adopted its open-door policy and allowed its economy to be exposed to the international market, it has adhered to what Deng Xiaoping called "socialism with Chinese characteristics." [1] As a result, it has produced an economy with one of the most rapid growth rates in the world by steadfastly embarking on a developmental strategy of gradual, market-oriented measures while simultaneously remaining nominally socialistic. As I discuss in this article, this strategy of reform--the mere adoption of a market economy while retaining a socialist ownership base--should similarly be characterized as "privatization with Chinese characteristics," [2] even though it departs markedly from the more orthodox strategy most commonly associated with the term "privatization," at least as that term has been conventionally understood in the context of emerging market or transitional economies. The Russian experience of privatization, for example, represents the more dominant and more favored approach to privatization--certainly from the point of view of the West and its advisers--and is characterized by immediate privatization of the state sector, including the swift and unequivocal transfer of assets from the publicly owned state enterprises to private hands. On the other hand, "privatization with Chinese characteristics" emphasizes not the immediate privatization of the state sector but rather the retention of the state sector with the concomitant creation of a parallel non-state sector designed to supplement the state sector and to serve as a social "shock absorber" in the event that the state sector itself is to be eventually "privatized"--or as Chinese officials prefer it, "corporatized" or "securitized." [3] In this article, I use the term "privatization" to describe China's current stage of ownership reform, even though, as I also suggest in Part IV, the Chinese strategy has not been to han d control and equity over to private holders, but, ironically, to bring private savings into state-controlled shareholding enterprises. The distinction between "privatization" and "corporatization" or "securitization" rests on the terms' ideological significance to Chinese officials, who view "corporatization," the conversion of a state-owned enterprise into a shareholding company, or "securitization," the subsequent sale of such shares on a securities market, as ideologically compatible with "socialism with Chinese characteristics." On the other hand, "privatization"--stemming from the word "private" and identified with the institution of private ownership without necessarily ensuring the preservation of the state as the agent of the "entire people" in the social ownership of the means of production [4]--is considered to be anathema from an ideological standpoint to the state's official adherence to socialism. [5] Because China has been ideologically circumscribed by "market socialism"--market-based but only palatable to and compatible with socialism--it has had to opt for a form of privatization that allowed the reformers to argue for market-oriented reform while promising that the state sector itself will be insulated from market encroachments. Despite its blatantly ideological roots, the Chinese path nonetheless should be examined for its arguably legitimate economic and theoretical underpinnings--for example, whether there are valid economic reasons for a strategy that favors retention of the state sector and the concomitant creation of a non-state sector, and whether state-sector privatization, when it is in fact implemented, would be more effective after a full-fledged non-state sector has been created because then the transfer of ownership from state to private hands would be taking place in the context of an already marketized framework. These types of questions will have considerable policy ramifications as m ore and more countries search for an exit from an economic system based on full public ownership of the means of production and compulsory state economic planning. …

Internationalization of Primary Public Securities Markets

Abstract: HAL S. SCOTT [*] I INTRODUCTION In fully internationalized securities markets, issuers in public primary markets should be able to issue securities to investors worldwide using one set of optimal distribution procedures and disclosure documents, and subject to one set of liability standards and enforcement remedies. Rules in which the benefits outweigh the costs are optimal. Optimal standardized issuance ("OSI") across borders would reduce the costs of issuing securities that are in international demand, a benefit that would be shared by both issuers and investors. Also, OSI would result in more perfect competition in the issuing market for such securities (just as in the goods market) and a more efficient allocation of capital worldwide. OSI is only relevant when there is sufficient investor demand for a public international distribution. This article is concerned only with those cases. The significant growth of registered offerings of foreign issuers in the United States, from seventy-eight in 1990 to 526 (with a total value of $145.9 bi llion) in 1998, is a strong indication of such investor demand. [1] This article focuses on public primary markets rather than public secondary markets. While the two markets are related--publicly distributed securities are invariably listed and traded in public secondary markets--they are not the same. Public securities are initially distributed through an underwriting process where securities are sold to investors by the issuer through underwriters; thereafter, the securities are traded in the secondary market. Primary market distributions play a crucial part in the allocation of capital. Investors purchasing in primary markets, as opposed to secondary markets, cannot necessarily rely on prices set in deep liquid markets where rational expectations of the value of the securities have been incorporated into the price. [2] Additionally, public primary markets involve purchases by individual investors; indeed, issuers make such distributions in order to reach these investors. While initial public offerings ("IPO"s)--an important part of the public primary market--are heavily dominated by institutional investors, individual investors participate significantly in these markets, as well. This article assumes that there is no conflict between having standardized and optimal disclosure rules. Merritt Fox, to justify his issuer nationality approach, argues to the contrary when he raises the possibility that the socially optimal level of disclosure may differ for different countries. [3] He argues, in effect, that the optimal level of disclosure in Germany and Japan, where capital has been traditionally allocated mainly through banking markets, may be lower than in the United States, where securities markets have played a more important role. [4] However, in major markets, including Germany and Japan, securities markets currently play an important enough role that those countries care about how they allocate capital. Securities markets in these countries, as compared to banking markets, are gaining importance. Further, even if one should be more tolerant of less disclosure in Germany, such a rule would only affect allocation of capital within Germany. Such tolerance would not be appropriate in a n international context where the concern is with allocation among issuers of different countries. If Deutsche Telekom raises significant capital outside Germany, we should be concerned with choosing the right set of rules for the world, not just Germany. Part II of this article discusses the current obstacles to achieving OSI. It argues that the imposition of U.S. rules for disclosure, distribution, and enforcement, within and to some extent outside the United States, impedes the achievement of OSI. It also argues that the solution is not merely to abolish mandated disclosure. The article then proceeds to examine options for dealing with the problem. …

Constitutional Approaches to Privatization: An Inquiry into the Magnitude of Neo-Liberal Constitutionalism

Abstract: DAVID SCHNEIDERMAN [*] I INTRODUCTION It is common in the literature on globalization to find the claim that there is an "irreducible heterogeneity" in the world today--that there is, at present, an ongoing competition between different political cultures with no predetermined structure out of which emerges a predominant winner. Roland Robertson and Frank Lechner argue, for instance, that the global scene is "highly 'pluralistic"' and that there is a "proliferation" of competing definitions of the global situation. [1] Similarly, sociologist Martin Albrow writes that there is "no axial principle underlying global institutions." [2] Rather, he argues, there is a pluralism reflecting "no theory of the greater good, simply the historic accumulation and interplay of national experiences and expertise coming to terms with each other." [3] This view fails to account adequately for the determinate rules and structures associated with "economic globalization," the ensemble of legal rules and structures for the promotion and protection of foreign investment. These rules and structures cumulatively attempt to fashion a global vision of economic policy, property rights, and constitutionalism that institutionalizes the political project called "neo-liberalism." In the post-1989 global scene, political alternatives seem to have narrowed in scope. The structures that influence political and economic life now are shaped by the global consensus that states must be made safe for trade and foreign investment. States are expected to remove regulatory restraints on the movement of capital, goods, and services, to divest themselves of publiclyowned enterprises--to privatize or denationalize real or financial assets--and to facilitate the private supply of certain goods and services by "contracting out" and "commercialization." [4] A number of options to achieve privatization and denationalization are available to states, but two prevailing themes emerge, each corresponding to a different vision of constitutionalism. The first is the "state capitalist" model, designed to enhance the capacity for state control and public participation. [5] The other is the "neo-liberal" model, which places legal limits on the state's regulatory capacity. [6] This article asks whether constitutional rules in the state capitalist mode that redistribute property ownership more widely can survive the pressures generated by the neo-liberal model of constitutionalism. As a means of examining this question, this article takes up processes of privatization expressed in constitutional rules that grant ownership preference to employees of privatized state enterprises. Contemporary debates about the direction of constitutional design in an era of economic globalization are better understood in light of the interplay between these two contrasting models of constitutional thought. Contrary to Albrow's characterization, [7] there appears to be a structural tilt to the global scene generating an emerging structure with a likely winner. Privatization programs take a variety of forms. This article considers only those programs that concern the divestiture of state assets, or denationalization through the sale of shares or assets to employees and employee associations. It neither purports to discuss the assumed benefits of privately owned over publicly owned enterprises [8] nor the benefits or pitfalls of this particular form of privatization over other methods, such as unrestricted sales to outsiders or equal-access vouchers. Among the alleged perils, it is feared that selling shares to employee "insiders" fails to bring new capital or new skills to divested companies, [9] a case of "private benefits being had at public cost." [10] This discussion, instead, proceeds on the assumption that enabling employee access to public property is a politically valid objective to achieve in the privatization context. The pertinent question is: Can this objective survive the regime of transnational rules for the promotion and protection of foreign investm ent? …

Rethinking Welfare Rights: Reciprocity Norms, Reactive Attitudes, and the Political Economy of Welfare Reform

Abstract: AMY L. WAX [*] I INTRODUCTION A spate of recent reports on President Clinton's 1996 welfare reform initiative, the Personal Responsibility and Work Opportunity Reconciliation Act ("PRA"), indicates that the new welfare regime appears to be working. Although results vary by state, welfare rolls have dropped dramatically as many former recipients have gone to work. [1] It remains to be seen whether the welfare population is better off and whether current trends will persist if the economy slows down. [2] For the time being, welfare reform correlates with reduced dependency on federal poor relief programs. The public also seems pleased with the new welfare system. Public opinion surveys consistently reveal staunch support for key features of President Clinton's reform initiative, including work requirements for the able-bodied and time limits on benefits. [3] A majority of voters approve of providing services such as job training, child care, child support collection, short-term loans, and transportation subsidies that help the poor become self-supporting. The new welfare reform package gives states the flexibility to make those services available. Although the public staunchly supports President Clinton's welfare reform initiative, the academy has been somewhat more critical.4 What is notably missing from the critique, however, is any call to place support for the poor on a more secure legal footing. No significant voice in the debate today argues that so-called "economic rights" should be elevated to constitutional status. The debate proceeds almost entirely in terms of ordinary, or normal, politics. [5] This is not surprising. Establishing an unassailable right to welfare was once an important goal of legal academics and activists, but is no longer. Initially, the objective was not to amend the Constitution, but to identify within it previously unrecognized, positive entitlements for citizens and affirmative duties for government.6 Although academicians still make fitful efforts along these lines,7 litigators rarely do. [8] The diminishing interest in this project is partly a product of the courts' decisive rejection of the notion that the federal Constitution, as currently written, requires government to reduce inequality and relieve want. [9] Consequently, proponents of a right to basic economic security have all but given up on constitutional exegesis in favor of normative ideal theory. Drawing on liberal theorists like John Rawls and Ronald Dworkin, scholars have asked what a liberal, democratic society should provide by way of assistance to the least well off or, even more broadly, to all its citizens. These discussions implicitly recognize that our present system diverges from what a liberal society defensible on first principles might recommend. [10] Ours is a regime that permits, but does not require, quite extensive redistribution of resources. As such, the choice of whether and how to aid the poor is not built into the basic political order, but rather is relegated to ordinary, or normal, processes of democratic governance. [11] The normative and theoretical questions of what entitlements citizens should have and what duties liberal democratic governments should assume are clearly distinct from the issue of what legal and institutional status should be accorded obligations and rights. Perhaps liberal democratic societies, to be regarded as just, should make some provision for the poor. Does it follow that such provision should be guaranteed as part of the constitutional order? Even theorists who attempt to justify affirmative economic rights as a fundamental component of just liberal societies differ in their views of how those economic rights should be secured, and who should have the authority to decide upon their precise contours. [12] Nonetheless, the belief is currently widespread that welfare programs for the poor in particular, and programs of economic redistribution in general, are quite important and even central to the basic well-being of citizens. …

Liberalization and Democratization: The Forum and the Hearth in the Era of Cosmopolitan Post-Industrial Capitalism

Abstract: SOL PICCIOTTO [*] I INTRODUCTION THE MISNOMER OF PRIVATIZATION The processes described under the misleading term "privatization" have been part of a major social restructuring in both the political and economic spheres. Most notably, widespread state failures have resulted in significant changes in the form and functions of the state. This reform encompasses not only the collapse of state socialism, but also crises and radical reforms in developed capitalist states, including U.S. regulated corporatism, European-style social-democratic welfare states, and the developmental states of Japan and the Asian "tigers." The causes of these changes have been equally diverse, involving a mixture of both political and economic factors. Nevertheless, these processes have much in common, entailing a transition to post-industrial capitalism, or what Manuel Castells has called the "Information Age." [1] The crisis of the state has been most evident in eastern Europe and the former Union of Soviet Socialist Republics, which experienced a systemic social crisis of both political autocracy and economic centralization. Elsewhere, the relationships between the political and economic aspects have been less explicit, and thus the overall nature of the processes has been harder to grasp. One linking element has been the increased difficulty of legitimizing public expenditures from general taxes--especially those paid by direct taxes on income. This problem applied not only to social and welfare spending, but also to public funding of the renewal of infrastructure, in particular, expenses to keep pace with emerging needs and technologies in areas such as transportation and telecommunications. At the same time, political systems found it increasingly difficult to resolve conflicting claims and demands in public services. New mechanisms were devised to decentralize decisionmaking and introduce "market principles" into public sector resource allocation. Although these changes were often presented as a decentralization or devolution of power, this characterization was in many respects misleading because the power devolved was generally limited to micro-management of shrinking resources within the parameters defined from above. I had first-hand experience of this process as an elected school governor from 1989 to 1991, not long after the British Conservative government had introduced devolved budgetary management in schools. That system was billed as a transfer of power from local education authorities to head-teachers and governors. In practice, it relieved our local authority of the responsibility for difficult decisions, such as deciding whether to close small rural schools or balancing staffing ne eds against book purchasing; however, central government essentially determined the parameters for these decisions by setting the weighting criteria for budgetary allocations to schools. Similar attempts were made in other public services, such as health care. Thus, although there has been much political talk of "rolling back the state," the process has largely consisted of remodeling the "public" sphere of politics and its relationship to the "private" sphere of economic activity. This is shown even by crude measures, such as state expenditure as a proportion of Gross Domestic Product ("GDP"), which has scarcely fallen even in countries where there has been extensive privatization. [2] At the same time, major transformations have also been occurring in the forms of organization of so-called private enterprise, that is, the business economy dominated by the giant corporation. Large-scale mass manufacturing has been reorganized, and the centralized bureaucratic firm has become the "lean and mean" corporation, concentrating on its "core competencies" but operating within a web of strategic alliances, supplier chains, and financial and governmental networks. [3] Many of these changes have been driven by social pressures from below. …

Presidential Non-Enforcement of Constitutionally Objectionable Statutes

Abstract: DAWN E. JOHNSEN [*] I INTRODUCTION In February 1996, Congress presented President Bill Clinton with a dilemma. The National Defense Authorization Act for Fiscal Year 1996 included a provision requiring the armed forces to discharge individuals infected with the human immunodeficiency virus ("HIV"), including asymptomatic individuals. [1] President Clinton concluded that this provision "violate[d] equal protection by requiring the discharge of qualified service members living with HIV who are medically able to serve, without furthering any legitimate governmental purpose." [2] Yet the bill also appropriated $265 billion for military programs the President deemed "of great importance" to national security interests. [3] President Clinton had vetoed an earlier version of the law due in part to the same HIV provision, [4] but decided against a second veto because of the military's need for the money appropriated by the bill. [5] President Clinton then faced the prospect of either enforcing the HIV provision, which in his view would both violate the constitutional rights of more than a thousand members of the armed forces and diminish military effectiveness, or disregarding the dictates of an act of Congress he had signed into law. President Clinton's dilemma was far from novel. More than a century earlier, the House of Representatives impeached President Andrew Johnson because he claimed the authority to disregard a statute that he viewed as unconstitutional. [6] President Johnson fired the Secretary of War without first obtaining the consent of the Senate when consent arguably was required by the Tenure of Office Act, [7] which Congress had enacted over President Johnson's veto. [8] The Senate came within one vote of convicting and removing President Johnson from office for failing to enforce a law that the U.S. Supreme Court eventually agreed was unconstitutional. [9] A contemporary example: Congress continues to enact provisions that purport to allow a single house (or committee) of Congress to block executive branch action despite the Supreme Court's declaration that such "legislative vetoes" are unconstitutional. [10] Presidents routinely announce that they are not bound to comply with such provisions. [11] This fundamental issue of the constitutional allocation of powers remains hotly contested. Constitutional commentators, as well as the political branches of our federal government, continue to debate the existence and parameters of the President's authority to refuse to enforce constitutionally objectionable statutes. [12] What should the President do if he believes enforcing a statute would violate the Constitution? In this article, I consider the legitimacy of what I will term "presidential non-enforcement," [13] that is, whether and when the President may disobey an unambiguous congressional command enacted in conformity with the constitutionally prescribed lawmaking process on the ground that the President believes the law is unconstitutional. Presidential non-enforcement in this narrow sense differs significantly from some other far more common executive branch responses to constitutionally objectionable statutes. Presidents often avoid constitutional problems, as they should, through their interpretation of ambiguous statutes or through the exercise of enforcement discretion. [14] These less controversial practices typically leave Congress free to consider the constitutional issue and enact more specific legislation if it disagrees with the President's views. Presidential non-enforcement, in the sense I will use the term, constitutes a more direct conflict with the core constitutional function of another branch of government. [15] In Part II of this article, I review the two prevailing approaches to presidential non-enforcement found in the academic literature. Current views span the same constitutional spectrum as in the days of President Johnson's impeachment. …

Piracy in Russia and China: A Different U.S. Reaction

Abstract: CONNIE NEIGEL [*] I INTRODUCTION The development of copyright law in Russia and China is similar in several respects. Both countries developed their copyright laws much later than did Western Europe. Both countries refused to adopt international copyright agreements until pressured by other members of the international community, particularly the United States. Both countries refused adequately to protect foreign works. Despite these similarities, however, Russia and China have experienced very different treatment from the United States when U.S. copyrights have been violated. On the one hand, the United States has aggressively pursued trade sanctions against China to force it to adopt stricter intellectual property laws. With Russia, on the other hand, the United States has adopted a much milder approach and has not threatened trade remedies, despite the widespread piracy of U.S. works in Russia. In general, the United States has appeared to pursue different political, economic, and military goals in its relationships with Russia and China . For example, the United States supported the Russian government after the collapse of the Soviet Union and sought to strengthen the Russian economy, rather than possibly weakening it with threats of trade sanctions. In contrast, the United States threatened trade sanctions against China in an attempt to reduce the U.S. trade imbalance with China. In addition, U.S. policy toward China has been influenced by events in Tiananmen Square and other human rights abuses as well as China's policy of exporting arms and nuclear technology to Third World countries. By contrast, the United States has sought to maintain good relations with Russia to influence its policies of disarmament and nuclear non-proliferation. Finally, the United States has attacked piracy more aggressively in China because China exports its pirated works from the United States into Western markets, resulting in the direct competition of these low-cost, pirated works with legitimate U.S. works. For all of these reasons, the United States has pursu ed China's copyright abuses more aggressively than it has pursued similar abuses by Russia. This article attempts to explain the reasons for this disparate treatment. This article supplements the treatment of intellectual property law in Law and Contemporary Problems, including the Spring 1996 issue on the Lanham Act. Part II of this article traces the indigenous historical development of Russia's copyright system during the era of tsarist rule in Russia up to the Soviet era and explores more recent responses to external pressures from other members of the international community, in particular the United States. In similar fashion, Part III traces the historical development of China's copyright system, indigenously as well as in response to U.S. trade pressures. Part IV then examines the U.S. response to piracy in Russia and China and attempts to explain the disparate treatment. II HISTORY OF RUSSIA'S COPYRIGHT LAW Although Russia developed its first copyright law in the early nineteenth century, it did not adhere to international copyright agreements until almost 150 years later, when external pressures forced the then-Soviet Union to adapt its laws to more stringent international norms. A. Indigenous Development of Russia's Copyright Law Russia produced many of the great composers and authors of the world, but it lagged behind Western Europe in its development of copyright law by almost a century. [1] Western European countries published books in Slavic languages--and even used the Cyrillic alphabet--soon after the, invention of the printing press in 1476, but Russia did not publish its first known book until 1564, almost a century later. [2] Despite its late development, Russia's copyright law followed a similar path to the laws of Western Europe in the early years. Like its European counterparts, the Russian monarchy sought to control the dissemination of information by controlling printing. …

Premises for Reforming the Regulation of Securities Offerings: An Essay

Abstract: JAMES D. COX [*] I INTRODUCTION One of the most significant characteristics of the Federal Securities Act of 1933 [1] is its durability. Even though the Securities Act has been amended several times since its enactment, the architecture and fundamental assumptions of the Act remain largely unchanged from their Depression-era beginnings. The Securities Act's underlying structure has not changed even though remarkable changes in securities markets have occurred, including the evolution of institutional investors' domination of securities markets, investment strategies and capital-raising occurring across borders, and the emergence of digital transmissions to replace the paper-based communication system that existed when the Act became law. The Securities Act's critics may see the continuing presence of regulatory tenets formed in the 1930's as further evidence of the necessity of radical reform of the U.S. securities laws. They may also argue forcefully that continuing adherence to the status quo reflects the political truth that powerful co alitions--regulators, investment bankers, accountants, and attorneys--have an interest in preserving the provisions of the Securities Act of 1933. [2] Any change in the public offering process introduces the potential for lost rents for each of these constituencies; therefore, that change meets resistance. On the other hand, we can argue that the continuing vitality of a securities law enacted seven decades ago underscores the wisdom of its fundamental tenets, its inherent flexibility, and the SEC's wise oversight of its provisions. In this article, I discuss six fundamental tenets that should guide the regulation of public offerings of securities. The approach followed in Part II assumes that regulation is to be re-examined from the ground up, with no political or regulatory constraints. Political reality is, however, re-introduced in Part III, which examines the reach of the exemptive authority that the SEC currently possesses, in order to determine whether the principles advanced in Part II can be carried out without Congressional action. Consideration of the scope of the SEC's authority to change its regulatory approach reflects a stark political reality: It is not likely that a major overhaul of the U.S. securities laws will be undertaken by Congress. Even if legislative reform were undertaken, it is unlikely to achieve better results than those that can be accomplished under the existing framework of the Securities Act. II REGULATORY TENETS Whether it is the debates within Congress or the frequent expressions of courts, the incantations regarding the broad objective of the securities laws are the same: to provide full and fair disclosure for the protection of investors and to enhance the allocational efficiency of U.S. capital markets. These regulatory goals are not unique to the United States. The quest for improved allocational efficiency, deterrence of fraud, and enhanced investor decision-making are the objectives pursued by securities laws throughout the world community. [3] Moving from these objectives to their implementation within a digital, globalized economy requires that the underlying tenets of regulation be isolated and reexamined. Six such tenets are considered below. A. The Filtration Process in the Digital Age The dominant theme animating the securities laws is the facilitation of informed, intelligent investment decisions. At the same time, the current view is that the individual investor does not read the prospectus produced by the registration process. The Securities Act's provisions support this hiatus between its stated objective and the reality of practice among individual investors by mandating only that the prospectus reach the investor after the security has been purchased. [4] Nevertheless, the Securities Act still can be seen as fulfilling its objective despite this important omission, because its realistic objective transcends the information needs of the individual purchasing investor. …

Taxing the Market Citizen: Fiscal Policy and Inequality in an Age of Privatization

Abstract: LISA PHILIPPS [*] I INTRODUCTION A new emphasis on privatization is rippling through many fields of state policy in various countries. The restructuring of tax policy to foster a more privatized social and economic order is often overlooked as an example of this pattern. Focusing on Canada, this article argues that recent efforts to revise important facets of the income tax system are best understood through the lens of privatization. That is, Canadian tax policy increasingly discourages people from relying upon government programs or services to meet their basic welfare needs, but encourages them to rely instead upon private resources obtained through the market, or, if necessary, from family or charity. I argue that by promoting personal responsibility in this manner, the tax code is contributing to an erosion of the ideal of social citizenship and replacing it with a new model of market citizenship. While the reforms may offer immediate fiscal benefits to some, the overall effect will heighten social inequalities, with specific effects o n gender inequality. Part II of the article expands on the concepts of privatization and market citizenship and considers their broad implications for social equality. Though privatization is often associated with deregulation and the withdrawal of the state, I suggest that it is better seen as a new regulatory project in which the state's role has merely shifted away from redistribution toward the legitimization and enforcement of market outcomes. Fiscal reform is a key element of this project, not only because of its role in allocating and distributing resources, but also because of its normative power. Changes to the tax law are actively reconstituting the ideal subject of politics around a norm of market citizenship. I compare the concept of social citizenship associated with the welfare state to the new market citizenship of neoliberalism, in terms of their respective understandings of inequality and of gender relations. Just as feminists have exposed the gendered nature of social citizenship, they are beginning to discern how the gender order is being reconstituted within market citizenship. Drawing on this literature, I explain why the privatization of tax policies may exacerbate gendered inequalities. The last two decades offer many examples of reforming Canadian tax law to encourage sell-reliance. These reforms include greater tax incentives to save privately for retirement [1] and post-secondary education, [2] or to donate personal wealth to charities, which increasingly are assuming responsibility for social services. [3] The tax system also has been used to convert formerly universal transfers such as the family allowance into means-tested programs that attempt to create incentives for wage earning. [4] Part III of the article focuses on two current tax policy debates in Canada: the trend toward personal income tax cuts and the campaign for tax recognition of unpaid caregiving work. I argue that each of these developments demonstrates how tax policy is being deployed to promote the norms and practices of market citizenship. My case studies parallel the two private sectors that are meant to supply most of the resources for personal self-reliance: the market and the family. I analyze both areas of tax policy change in terms of their effect on gendered patterns of social inequality, including their likely impact on the distribution of income and on women in their capacities as market actors, unpaid caregivers, and welfare state clients. Together they illuminate the contradictory pressures placed on women to increase their market incomes while simultaneously absorbing more unpaid caregiving responsibilities in the family household. These initiatives demonstrate how tax policy is redistributing the costs of cari ng for people away from those who fare best in the market--including some women--to those who fare poorly. II FROM SOCIAL CITIZENS TO MARKET CITIZENS: PRIVATIZATION AND TAX POLICY The central theme of this article is that recent tax reforms in Canada are promoting private responsibility for human welfare, signaling a shift away from the solidaristic ideals of social citizenship toward a more individualistic model of market citizenship. …

Kids Who Kill: A Critique of How the American Legal System Deals with Juveniles Who Commit Homicide

Abstract: MIRAH A. HOROWITZ [*] I INTRODUCTION Twenty years ago, sixteen-year-old Brenda Spencer shocked the nation when she opened fire at Grover Cleveland Elementary, killing the principal and custodian, and wounding eight children. [1] In today's world, such horrifying school shootings have become almost commonplace. In 1997, two separate shooting rampages took the lives of seven students. The first occurred on October 1 in Pearl, Mississippi, when sixteen-year-old Luke Woodham killed his mother before killing three students and wounding seven others at his high school. [2] The second school shooting that year occurred on December 1 in West Paducah, Kentucky, when fourteen-year-old Michael Carneal killed three students at a morning high school prayer meeting. [3] In 1998, almost three times as many students lost their lives in school shootings. On March 24 in Jonesboro, Arkansas, thirteen-year-old Mitchell Johnson and eleven-year-old Andrew Golden killed four schoolmates and a teacher after setting the fire alarm to draw their victims out into their l ine of fire. [4] On May 21 in Springfield, Oregon, fifteen-year-old Kip Kinkel killed his parents and later opened fire in the school cafeteria, shooting twenty-four classmates, two fatally. [5] The largest, most frightening school massacre occurred on April 20, 1999, in Littleton, Colorado, when Eric Harris, eighteen, and Dylan Klebold, seventeen, opened fire at Columbine High School, killing thirteen people before taking their own lives. [6] As these high profile events escalate, so do the thousands of less visible homicides that occur daily in inner cities and in poor, minority neighborhoods. Approximately twenty-three thousand homicides occur each year in the United States, roughly ten percent of which involve a perpetrator who is under eighteen years of age. Between the mid 1980s and the mid 1990s, the number of youths committing homicides had increased by 168%. [8] Juveniles currently account for one in six murder arrests (17%), [9] and the age of those juveniles gets younger and younger every year. For example, in North Carolina in 1997, seventy juveniles under eighteen years of age were arrested on murder charges. Thirty-five were seventeen, twenty-four were sixteen, seven were fifteen, and four were thirteen or fourteen. [10] In 1999, for the first time in North Carolina's history, two eleven-year-old twins were charged with the premeditated murder of their father as well as the attempted murder of their mother and sister." As a result of both the increase in the juvenile homicide rates and the increase in highly publicized school shootings, Americans are demanding harsher punishments for the juveniles that commit them. For example, "[i]n the days after the Jonesboro, Arkansas, shootings in March 1998, an opinion poll revealed that about half the adults in America believed that the two boys who shot their classmates should receive the death penalty." [12] Those boys were thirteen and eleven years of age. Facing strong, punishment-oriented constituencies, legislators and prosecutors are seeking to impose the death penalty on younger and younger offenders, both through the legislation they propose and the punishments they seek in trial. When seeking the death penalty for juveniles under the age of sixteen, these legislators and prosecutors do not seem to be concerned with the United States Supreme Court constitutional requirement that offenders be at least sixteen before they can be sentenced to death. [13] The issue of whether the imposition of the death penalty is constitutional under the cruel and unusual punishment prohibition of the United States Constitution has long been debated. On February 3, 1997, the American Bar Association ("ABA") called for a moratorium on the death penalty until serious flaws in its administration could be corrected. [14] Among the most serious problems cited was the Supreme Court's refusal to prohibit the execution of juvenile offenders under the age of eighteen. …

Constitutionalism in the Shadow of Doctrine: The President’s Non-Enforcement Power

Abstract: DAVID BARRON [*] I INTRODUCTION May a President refuse, on constitutional grounds, to enforce a statute that requires the firing of all HIV-positive military personnel? May a President rely upon the Fifth Amendment to bar federal prosecutors from using unwarned statements notwithstanding a federal statute that expressly validates their use? May a President invoke a constitutional norm of equality to decline to enforce a provision requiring the adoption of differential business regulations for similar professions that he "knows" to be the product of nothing more than special interest dealing? There is a tendency among those sympathetic to the Supreme Court's rights-protecting role to be wary of an affirmative answer to such questions. There is lurking in the background a concern that the vigorous assertion of a President's independent authority to interpret the Constitution will be destructive of the rule of law, a concern that once the Supreme Court's preeminence as constitutional adjudicator is called into question, judicially enforceable individual rights will be called into doubt. For that reason, it is perhaps not surprising that the Clinton Administration, eager to disassociate itself from its predecessors' grander claims to independent presidential interpretive authority, [1] has approached with delicacy the question of the scope of the non-enforcement power. The Clinton Administration did not, it must be said, swing so far in the other direction that it disavowed the non-enforcement authority entirely. It rejected the position of those who contend that the executive's obligation to take care that the laws be faithfully executed deprives the President of the power to decline to enforce a statute on constitutional grounds and makes the veto power the sole means by which the President may give tangible effect to his independent constitutional views. [2] Neither was the Administration willing to join, however, with those who suggest that the President's obligation to take care that the laws, of which the Constitution is the supreme one, be faithfully executed leaves the President no choice but to decline to enforce a statute whenever he believes it to be unconstitutional. [3] Instead, the Clinton Administration's Office of Legal Counsel issued an important, nuanced opinion on the scope of the non-enforcement power. The opinion attempts to be respectful of the Supreme Court's "special role" in the constitutional structure, even as it is hospitable to the exercise of the executive's discretion to refuse to enforce a statute on constitutional grounds. [4] The opinion attempts to perform this feat by arguing as follows. Insofar as the President intends to be a faithful constitutional actor, he may exercise the non-enforcement power. The power should generally be exercised, however, in a manner that ensures that the ultimate resolution of a statute's constitutionality will be consistent with the resolution that the Supreme Court would reach if it were presented with the question in a justiciable controversy. The President may decline to enforce a statute, the opinion therefore concludes, when it is "probable" that the Supreme Court would vindicate his independent constitutional judgme nt. [5] Even then, however, the President should generally enforce statutes he believes to be unconstitutional in order to render justiciable constitutional questions that the exercise of the non-enforcement power would otherwise insulate from judicial review. [6] For in many cases, there will be no injury sufficient to support a court challenge unless the President enforces the statute. In her thoughtful contribution to this symposium, Professor Johnsen elaborates on this court-centered approach to presidential non-enforcement. [7] She agrees that a President should generally enforce statutes that he believes to be unconstitutional. She adopts this view in significant respects because of the importance of ensuring that constitutional disputes between the branches are made justiciable. …

Appendix: The Constitutional Separation of Powers Between the President and Congress

Abstract: This memorandum provides an overview of the constitutional issues that periodically arise concerning the relationship between the executive and legislative branches of the federal government. Although that relationship is shaped in part by the policy and political concerns of the President and Congress of the day, the political interaction between the President and Congress takes place within an enduring constitutional framework that confers powers and responsibilities on both elected branches. In this memorandum we discuss the general principles underlying separation of powers analysis, and we address certain specific questions that have arisen in the past. Any set of examples is necessarily illustrative rather than exhaustive, however, and the Office of Legal Counsel is always available to assist in reviewing legislation or other congressional action for potential separation of powers issues. [1] I GENERAL PRINCIPLES The Constitution reflects a fundamental conviction that governmental \"power is of an encroaching nature, and that it ought to be effectually restrained from passing the limits assigned to it.\" The Federalist No. 48, at 332 (James Madison) (Jacob E. Cooke ed., 1961), quoted in Metropolitan Washington Airports Auth. (\"MWAA\") v. Citizens for the Abatement of Aircraft Noise, Inc., 501 U.S. 252, 273 (1991). The founders, not content to rely on paper definitions of the rights secured to the people, \"viewed the principle of separation of powers as a vital check against tyranny.\" Buckley v. Valeo, 424 U.S. 1, 121 (1976) (per curiam). In order to safeguard liberty, therefore, the Constitution creates three distinct branches of government--Congress, the President, and the federal judiciary--and assigns to them differing roles in the exercise of the government's powers. The resulting division of governmental authority is not a mere set of housekeeping rules indicating which branch presumptively performs which functions ; it is, rather, a fundamental means by which the Constitution attempts to ensure free, responsible, and democratic government. See MWAA, 501 U.S. at 272 (\"The ultimate purpose of this separation of powers is to protect the liberty and security of the governed.\"). The constitutional separation of powers advances this central purpose by \"assur[ing] full, vigorous, and open debate on the great issues affecting the people\"; [2] by \"placing both substantive and procedural limitations on each [branch]\"; [3] and by maintaining a \"system of ... checks and balances\" among the three branches. [4] Although the structure of the Constitution is designed to obviate the danger to liberty posed by each of the branches, [5] the founders were particularly concerned with the Congress's potential for improvident or overreaching action: \"the tendency of republican governments is to an aggrandizement of the legislat[ure] at the expense of the other departments.\" The Federalist No. 49, at 315-16 (James Madison) (Clinton Rossiter ed., 1961), cited in United States v. Brown, 381 U.S. 437, 444 n.17 (1965). Many specific aspects of the Constitution's separation of governmental powers embody the founders' \"profound conviction . . . that the powers conferred on Congress were the powers to be most carefully circumscribed\" and the founders' recognition of the particular \"'propensity\"' of the legislative branch \"'to invade the rights of the Executive.\"' INS v. Chadha, 462 U.S. 919, 947 (1983) (quoting The Federalist No. 73, at 442 (Alexander Hamilton) (Clinton Rossiter ed., 1961)). Executive branch lawyers thus have a con stitutional obligation, one grounded not in parochial institutional interests but in our fundamental duty to safeguard the liberty of the people, to assert and maintain the legitimate powers and privileges of the President against inadvertent or intentional congressional intrusion. As Attorney General William Mitcheli put it long ago: Since the organization of the Government, Presidents have felt bound to insist upon the maintenance of the Executive functions unimpa[i]red by legislative encroachment, just as the legislative branch has felt bound to resist interferences with its power by the Executive. …

The Culture of Belief and the Politics of Religion

Abstract: WILLIAM P. MARSHALL [*] I INTRODUCTION Religion has stood at the center of the American stage during the years of the Clinton presidency. The Congress passed, and the President signed, the Religious Freedom Restoration Act ("RFRA") [1]--the most dramatic and extensive piece of legislation addressing freedom of religion issues in our nation's history. [2] In a dramatic upset, the Republican Party took over Congress in 1994, fueled in large part by the mobilization of Christian conservatives. [3] The House of Representatives voted on a prayer-in-the-schools amendment for the first time in almost thirty years. [4] Governments began experimenting with providing social services through faith-based organizations because of dissatisfaction with the success rate of secular-based efforts. [5] Instances of school violence that had captured national attention were ascribed by some to have been caused by the absence of religion from public education. [6] Religiously defined hate groups and militias proliferated. [7] The most controversial and inflammatory law enforcement event of the decade involved the efforts of the federal government to arrest the leader of a religious cult in Waco, Texas. [8] Congress passed the International Religious Freedom Act, which established the fight against religious persecution as an international relations priority and established an office in the State Department to promote international religious freedom. [9] The United States intervened in a war in Europe that had been stoked by religious hatred and division. [10] The list goes on. [11] Against this background, Professors Randy Lee and Marci Hamilton offer diametrically opposed normative and descriptive assessments of the role of religion in politics. Normatively, Lee believes that in our constitutional system, religion should be an active player in political affairs. [12] Hamilton contends that the role of religion should be more circumscribed. [13] Descriptively, Lee believes that religion has been inappropriately marginalized in American political life. [14] Hamilton asserts that, if anything, religion has been too active a participant in the political scene. [15] Lee and Hamilton, however, share one common point of agreement. Lee, explicitly, and Hamilton, implicitly, both recognize that religion can be, and often is, a potent political force. Part II of this comment will address and support the point explicitly offered by Professor Lee--the claim that religion is political. This section will argue, however, that the political manifestation of religion is not confined to the instances when religion becomes involved in express political activity, such as lobbying or partisan politics. Rather, religion must be understood as a pervasive social force that has an inevitable political effect. Part III will address whether religion has been inappropriately marginalized in the public culture. It will show that the purported marginalization is more a matter of perception than reality. While it is true that there is a popular perception that religion has been inappropriately marginalized in American life, the reality is that religion has retained its power as a social and political force. Part III will also attempt to explain the discrepancy between the reality and the perception of the marginalization claim. Part IV will address the normative debate regard ing the role of religion and politics, and suggest that there are legitimate reasons why the overt involvement of religion in politics should be treated with some caution. Finally, Part V will use the example of school prayer as an example of why the mix of religion and politics can be harmful to the interests of both politics and religion. II RELIGION AS POLITICS Religion is a powerful force in the American political scene. Its political role, however, has many guises. Some are explicit, as when churches, religiously affiliated organization, or religious leaders become directly involved in partisan politics or legislative lobbying. …

Beyond Bond Markets 2000: The Electronic Frontier and Regulation of the Capital Markets for Debt Securities

Abstract: STEPHEN WALLENSTEIN [*] I INTRODUCTION On October 18-19, 1999, more than fifty securities lawyers, representatives of ratings agencies, regulators, and academics gathered in Washington, D.C., for a conference on the regulation of capital markets for debt securities. The conference, generously cosponsored by the Bond Market Foundation and the Duke University Global Capital Markets Center, was organized by Executive Director Stephen Wallenstein of the Duke University School of Law and the Fuqua School of Business. The purposes were to examine the characteristics of debt capital markets and to assess the role of government policy and self-regulation on the operation of these markets. The program was organized around the following three topics: 1. Distinctive Features of Debt Markets; 2. Regulatory Issues Driven by Risk and Liquidity Considerations; and 3. Technology and the Regulation of Debt Markets This article summarizes some of the recurrent themes and conclusions arising from deliberations by conference participants, and applies those themes and conclusions in an examination of issues concerning electronic markets that have emerged since the conference took place. We hope to move the debate beyond the existing regulatory framework, to consider how recent technological developments necessitate a new approach to the regulation of corporate debt transactions. In the process, we relied on a complete transcript of the proceedings, which omits the names of all participants in accordance with our agreement that remarks would go unattributed. This article represents a synthesis of the stimulating and thoughtful ideas offered at the conference, and their application to the ever-dynamic debt capital markets of today. II CORPORATE DEBT MARKETS AND SELF-REGULATION Empirically, corporate bond markets have been one of the most understudied areas of the economy, especially relative to other assets prevalent in American capital markets. This theme was prominent in the discussions, as participants repeatedly noted the paucity of data that would be the building blocks for research in this area. Reasons for this absence of information include lack of centralized reporting of trades, lack of transparency, and the relatively small size of the markets for exchange-traded bonds--a small fraction of the total market--which predominantly trade over the counter. Many conference participants echoed regulators' concern about the lack of information available to anyone other than dealers and their institutional clients. The institutional nature of corporate debt markets complicates attempts to apply broad regulatory principles to this segment of the capital markets. Because institutions have substantial access to high-end advisory services, as well as the recommendations of ratings agencies, they are far more sophisticated and less vulnerable to misinformation than are retail investors. Because more than four million individual debt securities are currently outstanding in the United States, including government, corporate, municipal, mortgage, and asset-backed debt (versus approximately ten thousand equity securities), bond advisory and information services face a daunting task. This task is more difficult because trading in the vast majority of these debt securities is quite infrequent. Moreover, administrative and information services must account for a greater number of variables, such as time to maturity, coupon rate, and benchmark treasury rates. In addition, external factors--such as dealer inventory and the size of a purchase or sale in relation to the amount of that security outstanding--can have a serious impact on bond prices in ways that are incompatible with regulatory paradigms based on an equity-style approach. Furthermore, institutions enjoy a superior pricing power with respect to their dealers, which allows them to purchase securities at lower bid/ask spreads. …

Measuring Securities Market Efficiency in the Regulatory Setting

Abstract: RANDALL S. THOMAS [*] JAMES F. COTTER [**] I INTRODUCTION In November 1998, the Securities and Exchange Commission ("SEC") proposed a modification to the federal securities law disclosure requirements to facilitate the process of issuing new securities. In a massive document, nicknamed the Aircraft Carrier, [1] the SEC sought public comments on a variety of proposed changes to the federal securities laws that were designed to minimize the cost and delays associated with issuing securities, while continuing to provide the public with the information that it needed to make investment decisions. Although the public comment period on these proposals has passed without any apparent action by the SEC, the policy questions raised by the Aircraft Carrier continue to be important ones. This article addresses one of the key issues that the Aircraft Carrier raised: How can we determine when companies should be able to issue simplified disclosure documents? In this proposed regulatory regime, the SEC suggested the use of a simplified registration statement, Form B, for larger, more experienced issuers, while other companies would continue to make traditional extensive disclosures using Form A whenever they sell securities to the public. [2] The SEC's proposal would have limited Form B disclosure to firms who had a public float greater than $250 million, or had a combination of $75 million in public float and average daily trading volume ("ADTV") greater than $1 million. [3] Similar to the way that the short form and shelf registration systems introduced by the SEC in the early 1980s allowed companies to take their securities to market more efficiently and quickly, the proposed Form B disclosure rules were intended to decrease the amount of time and to lower the cost associated with selling a company's securities. The theoretical basis for permitting simplified disclosure for some companies, but not for others, rests on the efficient capital markets hypothesis. This theory postulates that the market for a company's securities can be said to be efficient if, for a specific set of information, the security's market price is the same as it would be if all investors possessed this information. [4] Securities that trade in efficient markets have rapid price adjustments to new information, whereas those in inefficient markets do not. Today, it is well accepted that the efficient capital markets hypothesis constitutes the theoretical underpinning for the federal securities laws disclos ure policy. [5] The SEC's premise in the Aircraft Carrier proposals was that companies whose shares are traded in an efficient capital market should be permitted to file simplified registration statements that incorporate by reference many of their other federal securities law filings. [6] While we agree with this fundamental premise, we believe that the regulatory criteria that the SEC proposed for issuers to be eligible to file on the new Form B failed to capture market efficiency adequately. In this article, we argue that the SEC's study of the underlying factors that lead to capital market efficiency--which uses analyst following for a company's stock as a proxy for market efficiency--employed too broad a definition of what constitutes an "analyst" for purposes of measuring market efficiency. We also believe that the SEC failed to consider other important available proxies for market efficiency, particularly the level of institutional investors' stock ownership in these companies. When we adjust the definition of analyst to reflect more accurately only those analysts whose research effectively disseminates information to investors in the market, we find that the proposed numerical cutoffs for the use of Form B were set much too low. This conclusion is confirmed when we examine the distribution of institutional investor stock ownership in American companies, and reach the same result. …

A Report Card on the Impeachment: Judging the Institutions That Judged President Clinton

Abstract: SUSAN LOW BLOCH [*] I INTRODUCTION Now that we have lived through one of the most unusual events in American history--the impeachment and trial of the President of the United States--it is appropriate, indeed essential, that we assess how the process worked and learn what we can from it. Specifically, I want to address two questions: First, how well did the impeachment process work? In good academic fashion, I will grade each of the governmental institutions involved-- giving them, if you will, a report card. Second, what did we learn from the experience to guide us if, in the future, we face the impeachment of a President? Let me start by saying that President Clinton's misbehavior was inexcusable. Had he been more disciplined, the nation would have been spared a year of agony. But his "inappropriate" [1] relationship with Monica Lewinsky was neither criminal nor impeachable. [2] Had he been more forthright when confronted in January 1998, we probably also would have been spared the year of torture. However, the $64,000 question is whether his efforts to spare himself, his family, and Monica Lewinsky the embarrassment of disclosure were impeachable offenses. Before beginning the evaluation, I would like to disclose my personal connection with the saga. I first became involved when Paula Jones sued the President in 1994. I argued, in an op-ed, that a private damage action against a sitting President must wait until the President is out of office, unless the plaintiff can show irreparable harm from such a delay. [3] After the Supreme Court ultimately rejected that argument [4] and Independent Counsel Ken Starr [5] sent his referral to the House of Representatives, I urged members of the House not to impeach. [6] I was also one of the law professors who drafted and circulated the letter arguing that the President's actions did not warrant impeachment. [7] Furthermore, I was one of the nineteen constitutional scholars who testified before the House Judiciary Committee on impeachment. [8] After the House voted to impeach the President, I counseled members of the Senate on their role in the President's trial. In short, I am not unbiased but believe I can be fair in ev aluating the performance of the various institutions involved, giving a grade to each of them. II THE INDEPENDENT COUNSEL STATUTE Any critique of the impeachment process should begin with the independent counsel statute. The statute, at least as it has been constituted to date, gets an "F," and we are fortunate that Congress allowed the law to expire last June. [9] To say that we are well rid of the statute is not to say that Starr misused it. Indeed, it is important to note that he seems to have been vindicated by the court for the wrong-doings of which he was accused. [10] In fact, as Professor Gerhardt points out, one of the problems faced by independent counsels is their somewhat unique vulnerability to criticism from their targets. [11] Our recent experiences under the statute have shown the wisdom of those such as Justice Scalia who questioned its constitutionality from its inception. [12] The statute's name emphasized the need for independence, but that independence came at a significant price: the loss of accountability. In effect, independent counsels were not accountable to anyone. They had unlimited time, an unlimited budget , and a singular focus, or target. Judgment was not built into the statute. While the Attorney General could theoretically dismiss an independent counsel "for cause," [13] in reality, dismissal was politically impossible. In fact, no independent counsel was ever fired by the Attorney General nor had his investigation terminated by the Special Division. [14] This tension between accountability and independence was not simply a design defect; in constructing such a statute, there is an unavoidable trade-off between independence and accountability. Both are valuable attributes, but given the inevitability of a trade-off, our recent experiences demonstrate that accountability is more important than independence, and that independence can be achieved without a special statute. …

Deconstructing section 11: public offering liability in a continuous disclosure environment

Abstract: DONALD C. LANGEVOORT [*] I INTRODUCTION Shortly after the Securities Act of 1933 [1] ("1933 Act") became law, critics from the securities industry charged that the civil liability provisions created by Section 11 of the Act made it excessively draconian. Mandatory disclosure and prospectus delivery, even pre-clearance by a federal agency, were troublesome enough. However, strict liability to investors for issuers, and failure of "due diligence" liability for underwriters, accountants, officers, and directors for material misstatements in a registration statement, were quite another matter--making Section 11 the "bete noire," in Louis Loss's words, of the legislative scheme. [2] Opponents ominously warned that the legislation would dry up American capital-raising. [3] Even though they were eventually proven wrong in that particular prediction, [4] the industry was right to see the threat of private civil liability as the engine that drives the 1933 Act. [5] Estimates in the finance literature suggest, for example, that a sizable portion of the unde rwriters' spread is a liability risk premium, [6] and lawyer-disseminated fear of liability casts a harsh shadow over the due diligence process. [7] In the late 1970s and early 1980s, concerns about the relationship between liability and capital-raising efficacy reappeared. Large, seasoned issuers were moving significant capital-raising transactions offshore, into the so-called Eurodollar market. Delays associated with the Securities and Exchange Commission ("SEC") review and limits on publicity and marketing of domestic offerings were blamed. In response, the SEC introduced "short-form" registration for large capitalization issuers via Form S-3 and modernized and expanded the availability of shelf registration, thereby permitting large issuers to move quickly to take advantage of market opportunities without excessive regulatory delays. [8] In the political process and in academic debates, however, the principal risk associated with speeding up the distribution process was readily identified. Disclosure quality is threatened by the de facto loss of opportunity for external due diligence by underwriters and others associated with the issuance from the ti me the decision to sell is made to the time securities are purchased by investors. [9] Underwriters thus found themselves in a world of de jure liability if there were misstatements or omissions; only a vague Commission rule, coupled with some informal suggestions for ex ante "continuous due diligence" as protection, seemed to suggest a more permissive standard of due diligence in such settings. [10] Today, few suggest that we should, or can, backtrack on liberalization of the 1933 Act. [11] Instead, regulatory efforts all point to the opposite: further expansion of the speed and limited disclosure responsibilities associated with large company capital-raising. [12] Yet, this simply focuses all the more attention on liability, and to this point, the Commission has suggested only minimal reform: clarifying the due diligence responsibilities associated with short-form offerings to take account of "practicability" concerns. Indeed, to the consternation of many, the Commission suggested expanding the kinds of issuer-generated information that would otherwise be subject to negligence-based civil liability under the 1933 Act. [13] This article is an effort to rethink civil liability in capital-raising transactions by large capitalization issuers. [14] After a brief digression about who should set liability standards, the article then addresses two related questions. The first deals with a natural question: Should not the primary regulatory effort for large issuers be to assure continuous disclosure in the secondary marketplace, given the far larger volume of such trading in that market compared to that in primary transactions? [15] Second, if we have developed a satisfactory regime of disclosure responsibilities for this setting, what more, if anything, in terms of liability protection, is needed when such issuers sell new stock into an existing market for their securities? …

The First Amendment and Cyberspace: The Clinton Years

Abstract: JAMES BOYLE [*] I INTRODUCTION There are many things one could say about the Clinton Administration's effect on the Constitution. I am tempted to comment generally about the Clinton Administration's concern for constitutional values, but Dean Nichol has already captured many of my feelings on that subject. [1] In any event, my assigned topic was a narrower one: the Clinton Administration's impact on speech in cyberspace. I take as my starting point the bracing skepticism of Professor Volokh's paper on the same subject, a subject about which he has considerable doubt: I was asked to participate in this symposium by discussing the Clinton Administration and free speech in cyberspace, and I will do so. But inquiring into the Clinton Administration's role in cyberspace speech regulation may be asking the wrong question. I'm not sure that particular Administrations generally have much of a direct impact on free speech law (as opposed to the indirect impact, often not seen for decades, flowing from the decisions of the judges they appoint). The Clinton Administration, for instance, has mostly confronted free speech law incidentally and sporadically; the high-profile direct attempts to seriously restrict speech, such as the [Communications Decency Act], have largely come from Congress. Moreover, the words "in cyberspace" in the phrase "restrictions on free speech in cyberspace" are generally, in my view, not terribly significant; the medium by and large does not and should not affect the protection--or lack of protection-given to the content. [2] I am going to disagree, at least in emphasis, with most of these claims. In fact, there are interesting questions to be asked about the Clinton Administration's role in cyberspace speech regulation. Indeed, the actions of this Administration have had and will continue to have a considerable impact on both speech regulation in cyberspace, and on the law of the First Amendment generally. Finally, although Professor Volokh makes the valid point that discussions of free speech should not be medium-specific, certain particular features of cyberspace in general, and of the Clinton Administration's "plan" for cyberspace in particular, are likely to force the courts to confront a series of tensions and omissions in First Amendment doctrine. Admittedly, the Clinton Administration's role of "making" free speech law in some of these cases is similar to the Nixon Administration's role in "making" law on executive privilege, [3] another area in which the current Administration has excelled. [4] However, both in terms of speech regulation and in terms of providing raw material for the legal controversies that shape the law of the First Amendment, the Clinton Administration's legacy is considerable, and nowhere more than in cyberspace. [5] II A WORLD WITHOUT SULLIVAN The most visible examples of the Clinton Administration's role in cyber-speech regulation are the Communications Decency Act ("CDA"), [6] which was struck down by unanimous vote of the Supreme Court in 1997, [7] and the Child Online Protection Act ("COPA"), [8] which is now before the courts. [9] Both of these pieces of legislation were supported by the Clinton Administration even though the CDA had so many First Amendment problems it read like a law school exam question, and the COPA, while much better drafted, is hardly solicitous of speech on the Internet. [10] In my view, Professor Volokh is a little quick to let the Clinton Administration off the hook for its role in these bills; others have certainly been more critical. [11] Although the main impetus for the legislation came from the Congress, not from the Administration, the President publicly supported and signed both bills without any apparent qualms, which is itself quite striking. Even if one believes strongly in the desirability and constitutiona lity of the regulation of minors' online access to indecent material, both prudence and institutional responsibility argue for some level of constitutional scrutiny before the President signs a particular bill; under normal-science constitutional analysis, the CDA was so palpably unconstitutional that the Clinton Administration garners little credit on either front. …

Impeachment as Congressional Constitutional Interpretation

Abstract: NEAL KUMAR KATYAL [*] I INTRODUCTION In the past year, America experienced an intense constitutional debate waged in its newspapers, kitchens, and internet chat rooms. This debate was remarkable, and not only because a constitutional issue--the meaning of "high crimes and misdemeanors"--managed to capture the attention of the public. It was also striking because the constitutional argument took place outside of the one institution that many understand to be the primary interpreter of the Constitution, the Supreme Court. [1] For a textualist, this omission should not be surprising, as the Constitution vests the judiciary with virtually no function in impeachment. Yet the removal of the judiciary from impeachment highlights the ways in which our legislature is called upon to make interpretive constitutional decisions. During the interpretive debate over whether to impeach President Clinton, Democrats in Congress accused their Republican colleagues of being inconsistent in their approach to constitutional interpretation (and vice-versa). The Democrats argued that "high crimes and misdemeanors" had a very narrow meaning at the founding of the Constitution, and the Republicans responded by arguing that they should not be hemmed in by a two-century-old interpretation of a living document. Consider, as one example, what Representative Maxine Waters said during the impeachment debate: I am absolutely amazed at the liberal and loose interpretation of the Constitution that I'm hearing from conservatives. Usually, progressives are accused of loose interpretation and usually conservatives are considered to have strict interpretation of the constitution and law. But sitting in this committee, I have witnessed the most--the loosest interpretation of the Constitution, as my colleagues on the other side of the aisle have dealt with the meaning of high crimes and misdemeanors. [2] The party of originalism had thrown in the towel, and all for political points to boot. This essay contends that this attack on the Republicans was wrong. In defending the Republicans, I am not interested in their political motivations (if any) but rather the jurisprudential issues that their position raised. I argue that one can adhere to originalism in the context of judicial interpretation and, nevertheless, believe in a broader style of interpretation for the legislature. Originalism, as practiced in this way, is a doctrine that constrains unelected judges from an unduly free interpretive approach, but it does not preclude Congress from making constitutional judgments that are more flexible and nuanced. At stake in this project is something larger than the debate over originalism. Constitutionalists have assumed, too quickly in my view, that symmetry should exist between the interpretive styles of the courts and Congress. This assumption, which I shall call the myth of interpretive symmetry, slights the many reasons why an interpretive method may work well in one area and not work as well in another. Instead of mapping out all these possible divergences, I illustrate the point with three examples: the roles of history, precedent, and moral philosophy. I show how, in each instance, arguments can be made to suggest that divergent institutional roles should be taken into account in formulating a comprehensive interpretive philosophy about the Constitution. This essay largely concentrates on the first example, the role of history. It contrasts two prevailing theories of constitutional law, legal process and minority protection, and argues that implicit in each theory is an account of why the role of history might differ depending on whether the decisionmaker is the judiciary or Congress. It is well established at this point that the ultimate purposes of the Constitution will influence what style of interpretation is appropriate. What this essay seeks to show is that those purposes counsel different interpretive theories for different constitutional actors. …

The Special Constitutional Structure of the Federal Impeachment Process

Abstract: MICHAEL J. GERHARDT [*] In commenting on a congressional debate, the late Mo Udall is reputed to have remarked, "Everything that needs to be said has been said, but everybody hasn't said it." [1] It is tempting to think this sentiment aptly characterizes the state of discourse on President Clinton's impeachment proceedings. Throughout the Clinton impeachment proceedings, dozens of commentators in various fora opined on the central question of whether the President's misconduct constituted an impeachable offense. In offering their opinions on this issue, commentators squeezed as much meaning as they possibly could from the meager sources of authority. Such sources included the framers' and ratifiers' sparse debates about the standard for impeachment and removal (including no explicit consideration of whether misconduct without a direct link to a President's official duties may constitute an impeachable offense); [2] the limited range of reasonable inferences from the constitutional structure about the relationship among the electoral process, impeachment, and the President's misconduct (particularly in the aftermath of changes wrought by the Twelfth and Seventeenth Amendments and subsequent electoral reforms); [3] and precedent (consisting of only three serious impeachment efforts previously undertaken against Presidents and a total of only sixteen impeachments ever formally initiated by the House). [4] The hearings uncovered no new evidence from conventional sources on the constitutional standard for presidential impeachment, though the evidence adduced was twisted in just about every conceivable way. Nevertheless, the present symposium features some creative and constructive thinking about President Clinton's impeachment and trial. At the very least, each participant recognizes that in the aftermath of the President's acquittal, a whole new battle is being waged to shape subsequent generations' understanding of the significance of his impeachment and trial. Each participant has a different perspective on the ramifications of the acquittal, especially on the lessons that one can derive from the proceedings. My concern is with the implications of several distinctive features of the constitutional structure for Professors Katyal's and Bloch's articles, [5] as well as for general understanding of the federal impeachment process. The first such feature of the constitutional allocation of power for impeachment and removal is that it facilitates and rewards a pragmatic or flexible analysis and impedes a formalistic analysis of the fundamental question at the cord of President Clinton's impeachment proceedings--whether his misconduct constituted a "high Crime or Misdemeanor." [6] A pragmatic analysis of this issue entails balancing various practical considerations or factors, including the magnitude of harm that an impeachable official's misconduct has caused society or the constitutional order, the nexus between an official's duties and his misconduct, public opinion, and other possible avenues for redress, such as the electoral process or legal proceedings. In contrast, a formalist analysis employs rigid criteria fo r, or extremely well-defined elements of, impeachable offenses, such as treating every violation of the federal criminal law or every breach of the public trust as justifying removal. By vesting the impeachment authority in the politically accountable authorities of the House and the Senate, the framers of the Constitution deliberately chose to leave the difficult questions of impeachment and removal in the hands of officials well versed in pragmatic decisionmaking. Members of Congress are pragmatists who can be expected to decide or resolve issues, including the appropriate tests, by recourse to practical, rather than formalist, calculations. In fact, members of Congress decide almost everything pragmatically, and decisions about impeachment and removal are no exception. The vesting of impeachment authority in political branches necessarily implies the discretion to take various factors, including possible consequences, into consideration in the course of exercising such authority. …

The Constitutional Failure of the Strickland Standard in Capital Cases under the Eighth Amendment

Abstract: AMY R. MURPHY [*] I INTRODUCTION Not until the twentieth century did the United States Supreme Court rule that all criminal defendants, whether in state or federal court, had a right to be represented by counsel under the Sixth Amendment. [1] Until nearly the end of that century, however, the Court went no further than stating that defendants had a right to counsel, without specifying whether that meant competent counsel. In 1984, there were two landmark cases in Sixth Amendment jurisprudence. The first is the source of the requirement that counsel provide effective assistance, although the Court did not clarify what such assistance would entail. [2] Out of this requirement have arisen countless appeals based on ineffective assistance of counsel ("IAC"). Until the Court heard the second landmark case, Strickland v. Washington, [3] that same year, courts ruled on these claims without any guidance. The Court defined effective assistance of counsel according to what it was not: a deficient performance that so prejudiced the defense as to depri ve the defendant of a fair trial. [4] The Court gave little guidance about what constitutes a constitutionally deficient performance, and even less to how prejudicial the effect of the deficient performance has to be in order to be found unconstitutional. As a result, the Court did little more than to sanction the broad discretion already employed by courts in considering IAC claims. This discretion leads to arbitrary determinations in capital cases, which, although they may satisfy the low bar set for Sixth Amendment analysis, violate the Eighth Amendment. In the 1995 Law and Contemporary Problems symposium entitled "Toward a More Effective Right to Assistance of Counsel," Professor Uelmen gave a "guided tour" of the Sixth Amendment from which he gleaned several lessons. [5] First, criminal defense will never have a high funding priority in this nation. [6] Second, the difference between no counsel and incompetent counsel is a judicial fiction that enables courts to make distinctions under the Sixth Amendment that do not exist in reality. [7] Finally, Professor Uelmen noted the shortcomings in the current standards for legal counsel: "[I]f courts regarded the competence of defense counsel as just as essential to the achievement of justice as the competence of the judge, we would certainly see a different standard of competence applied." [8] It is these lessons, combined with the utter lack of any meaningful guidance from the Supreme Court as to what constitutes a prejudicial effect, that makes the Strickland standard a violation of the Eighth Amendment. Just a s legislation that gave juries complete and unguided discretion over the sentencing of capital defendants was deemed unconstitutional because it resulted in arbitrary punishment, [9] so the Strickland standard is unconstitutional because it recreates those same problems at the appellate level. Criminal defendants are guaranteed the right to effective assistance of counsel under the Sixth Amendment, but the Supreme Court's decision in Strickland has given appellate courts overly broad discretion to determine exactly what constitutes ineffective assistance of counsel. As a result, there is little consistency within judicial districts or across districts. [10] Legal assistance that might be constitutionally deficient and prejudicial before one judge may not even be considered unreasonable before another. Although most courts and legal scholars have examined the constitutionality of the assistance of counsel on an individual basis under Sixth Amendment jurisprudence, the appellate review of TAC claims in capital cases itself violates the Eighth Amendment prohibition of cruel and unusual punishment, especially as it is analyzed in Furman v. Georgia," because it results in impermissible arbitrariness in the sentencing of capital defendants. Part II of this note begins with a review of the right to couns el, which leads to a discussion of the importance of this right in capital cases. …

The Clinton Administration and War Powers

Abstract: LORI FISLER DAMROSCH [*] I INTRODUCTION: WAR POWERS IN CROSSNATIONAL PERSPECTIVE The strongest of all governmental powers is the power to engage in war; and the strongest challenge for constitutionalism is to bring the war power of the state under meaningful control. The 1787 Constitution allocated some military powers to the Congress and others to the President as part of the scheme of constitutional checks and balances. To this day, however, the distribution of authority between the branches remains contested and uncertain. The Clinton Administration has had substantial opportunity to contribute to the evolution of constitutional practice concerning war powers, by virtue of numerous occasions of combat deployments, cruise missile strikes, and other forms of military engagement since January 1993. In broad outline, the constitutional practice of the Clinton Administration concerning war powers is similar to that of previous administrations in the sense that sweeping claims of executive authority have been tempered through pragmatic political accommodation. The legal opinions issued to explain the constitutional and statutory rationales for executive military initiatives embody some subtle differences from those of other administrations. This article compares the record of the Clinton Administration with those of its predecessors, after first briefly locating U.S. war powers practice in the context of crossnational comparisons. The subject of the Clinton Administration and war powers can be addressed from a crossnational perspective, along the lines of the comparative constitutional research on war powers I have been pursuing in other writing. [1] In relation to the military intervention in Kosovo, for example, how did President Clinton's exercise of executive power compare to the authority of the heads of state or heads of government in the other member states of the North Atlantic Treaty Organization ("NATO") that participated in the operation? Were other chief executives constitutionally authorized to commit their forces to a military campaign without reference to their national parliaments, as President Clinton effectively did, or are such decisions shared with parliament in the respective constitutional systems? Crossnational comparisons show variations in the degree to which national parliaments participated in determining the nature of a given state's commitment to the NATO engagement in Kosovo. President Clinton was not the only NATO leader who initiated his country's participation in the Kosovo operation without obtaining explicit authorization from the legislative branch. In the parliamentary system of the United Kingdom, Prime Minister Tony Blair may assume support from the House of Commons without necessarily putting the matter to a formal vote. [2] In France's mixed system, President Jacques Chirac operates under Gaullist premises that military decisions belong to the presidential domaine reserve with little scrutiny from the Assemblee Nationale. [3] In other countries, however, parliamentary control is considered a fundamental constraint on executive war-making powers. Germany's postwar constitution broke with the past by renouncing war, but participation in collective defense or collective security organiz ations is constitutionally permitted, subject to parliamentary approval. [4] Notably, as required by a decision of the German Federal Constitutional Court at an earlier stage of the Yugoslav conflict, [5] the Bundestag had to act affirmatively to approve German involvement in the Kosovo campaign. [6] Polities in transition have looked to diverse constitutional models in developing their own approaches to executive-legislative relations with respect to war powers. The newest NATO members and NATO aspirants had their first tests of constitutional control of war powers in the post-cold war era with the Kosovo crisis. Hungary, a front-line state for this conflict, which borders on Yugoslavia and has close ties to ethnic Hungarians in the Vojvodina region of Serbia, submitted certain critical decisions for the affirmative authorization of the national parliament. …

An Economic Analysis of the Religious Freedom Restoration Act

Abstract: TRAVIS C. WHEELER [*] I INTRODUCTION As an attempt by Congress to overturn a Supreme Court ruling by statute, the Religious Freedom Restoration Act ("RFRA"), although passed by a congressional landslide, was one of the most controversial pieces of legislation passed during the Clinton presidency. [1] Enacted by Congress in 1993, RFRA was intended to add a degree of protection to religious practices by requiring courts to evaluate facially neutral, non-religion specific statutes using the compelling interest test. [2] By enacting the statute, Congress attempted to overturn a prior Supreme Court decision [3] by mandating how all courts must decide free exercise cases. In 1997, however, the Supreme Court ruled that RFRA was an unconstitutional congressional usurpation of the judiciary's power to interpret the Constitution. [4] RFRA remains noteworthy, however, because of the means utilized by a dissatisfied Congress to overturn the Court. Instead of adhering to the amendment process outlined in the constitution, Congress, via a statute, effectivel y not only overturned a prior Supreme Court ruling, but also expanded constitutional rights beyond the Court's recent interpretation of the Constitution. This note examines RFRA from a law and economics perspective to show that, as a method by which Congress attempted to impose its definition of a constitutional right upon the courts, the Act was inefficient. II RFRA'S SHORT HISTORY RFRA represented an attempt by Congress to restore the compelling interest test articulated in Sherbert v. Verner, [5] and Wisconsin v. Yoder, [6] for all cases in which religious freedom was substantially burdened. [7] In Sherbert, the appellant was denied unemployment compensation after refusing to work on Saturday, the Sabbath Day for her faith. The Court found it unacceptable that the appellant had been forced to choose between violating a religious tenet and receiving unemployment benefits, and ruled that this conditioning of receipt of benefits unduly burdened her free exercise of religion. [8] The Court likened this burden to a fine imposed on the appellant for worshipping on Saturdays. [9] In Yoder, the Court applied the Sherbert standard in granting Amish children an exception to a Wisconsin law requiring children to attend school until at least the age of sixteen. The Court concluded that the law, as applied in this case, was directly at odds with the purpose of the First Amendment and interfered with the "fundamental tenets" of the appellants' religion. [10] As in Sherbert, the Court held that a facially neutral statute may not unduly burden the free exercise of religion unless there is a compelling governmental interest. [11] Nearly two decades after Yoder, a closely divided Court held that a facially neutral, generally applicable law is not unconstitutional even though it incidentally burdens one's religious beliefs. [12] In Employment Division v. Smith, two Native Americans had been terminated from their employment as private drug rehabilitation counselors for ingesting the illegal hallucinogen peyote, as part of a sacrament in their religion. Because the Employment Division concluded that they had been terminated for misconduct, the two were denied unemployment benefits. [13] Writing for the majority of the Court, Justice Scalia stated that to impose the compelling interest test in such cases would elevate religious doctrine above general law, thereby producing a "constitutional anomaly" in the form of a "private right to ignore generally applicable laws." [14] Smith likely would have resulted in an identical outcome even under the compelling interest test. The government would have had little difficulty establishing that full enforcement of its narcotics laws represented a compelling interest. [15] Indeed, Smith distinguished Sherbert and Yoder because they did not involve conduct prohibited by law. …

Connecting regulations and competition law : a Swiss perspective on liberalization

Abstract: CHRISTIAN BOVET [*] PHILIPPE GUGLER [**] I INTRODUCTION It is debated whether it is possible to liberalize markets successfully by means of introducing unrestrained competition only, or whether it is necessary to have regulators to supervise the opening of markets in adversarial administrative proceedings. Presenting these as the only options, however, oversimplifies the issues involved. That simple opposition suggests that sectoral authorities--which are federal regulatory agencies having jurisdiction over a particular industry--and competition authorities--which are federal agencies with broad jurisdiction over all industries limited to the issue of fostering competition--are antagonistic and that an unrestrained market might, on its own, resolve the problems of liberalization. This view, however, ignores the fact that competition authorities can and do intervene in the market to prevent anti-competitive behaviors such as unlawful agreements and abuse of a dominant market position. Although it is true that regulators often must consider issues related to compet ition, it is also important to have persons with specialized knowledge of the regulated industries working for these authorities, as well as people qualified for activities specific to the regulator's job, such as the granting of licenses. When liberalizing its telecommunications industry--the only former public sector industry that is fully liberalized--Switzerland created a special administrative commission to oversee competition and introduced market regulations designed to protect effective competition. A modus vivendi has been established between the regulative and competitive authorities, with close cooperation on certain issues required by law. Measures aimed at liberalizing the electricity sector are also under way. This article is a description of the problems and solutions found in Switzerland. Part II begins with a description of the factual background. Part III discusses present or proposed regulations for the telecommunications and electricity industries. Part IV concludes with a discussion of national competition law. II FACTUAL BACKGROUND A. Terminology In recent years, the privatization phenomenon has expanded in industrialized countries. In the process, the term "privatization" has taken on several meanings. [1] In everyday use, privatization often is simply equated with market liberalization. However, the terms are not synonymous. "Privatization" in its narrowest sense refers to the opening of the capital of a state-owned industry to private investors. [2] France and England have seen several waves of this sort of privatization as control of their governments has swung from the right to the left and back again. Typically, right-leaning governments move to privatize industrial companies involved in energy production, banks, insurance companies, and national railways. Market liberalization, on the other hand, refers to ending a state monopoly in an economic sector while usually maintaining government regulation of the industry. Once liberalization is realized, consumers have a choice among several operators. Strictly speaking, then, privatization is distinct from market liberalization. However, privatization of some portion of an industry previously under the complete control of the state often entails market liberalization, as demonstrated by the recent liberalization of the telecommunications market in Switzerland, which is discussed below. [3] There has not yet been any real, stricto sensu, privatization in Switzerland; the Swiss Confederation still controls the majority of the share capital of the Swiss Telecommunications Company ("Swisscom"), which was "privatized" in 1998. [4] If this article dealt with privatization in the narrower sense, it would conclude right here. In addition to market liberalization, a third form of privatization, in the broad sense, consists of changing the structure of public services. …

Freedom of Speech, Cyberspace, Harassment Law, and the Clinton Administration

Abstract: EUGENE VOLOKH [*] I INTRODUCTION During the height of the Clinton-Lewinsky scandal, many lawyer pundits talked about impeachment. Some talked about independent counsels and separation of powers. Some talked about the criminal law of perjury, or the rules of evidence, or whether indecent exposure constituted sexual harassment. A few experts, though, focused on a more practical issue: Saying certain things about the scandal, they advised people, might be legally punishable. "Be careful what you say," one headline warned, when you discuss "the Starr report and Clinton/Lewinsky matter" in certain ways. [1] "Talking about Clinton? Tread carefully," says another, pointing out the risk of "a lawsuit from an offended co-worker." [2] Such discussions "ought to be avoided" because of the risk of legal liability. [3] "[I]t's best to choose carefully who you share your remarks, your jokes, with.... 'Attorneys warn us about [legal liability]....' Office humor in particular 'is always quicksand'...." [4] "There's no right [to make certain statements about the Clinton/Lewinsky affair] just because it's a public issue." [5] "We had quite a few clients calling us when Lewinsky jokes... were making the rounds." [6] "People think that if they hear something on TV or the radio they can say it at work [without fear of legal liability]. But that of co urse is not the case." [7] What body of law, one might ask, would suppress jokes about the President or discussion of the Starr Report? Not the most publicized free speech restriction of the Clinton years, the Communications Decency Act of 1996. [8] which was struck down 9-0 by the Supreme Court. [9] Rather, this remarkable speech restriction is hostile environment harassment law. Under this doctrine, speech can lead to massive liability if it is "severe or pervasive" enough to create a "hostile, abusive, or offensive work environment" for the plaintiff and for a reasonable person based on the person's race, religion, sex, national origin, disability, age, veteran status, and in some jurisdictions a variety of other attributes. [10] And this rather vague and broad test has long been interpreted to cover not just face-to-face slurs or repeated indecent propositions, but also sexually themed jokes and discussions, even ones that aren't about co-workers or directed at particular co-workers. [11] The prudent employer is wise to restrict speech like this, whether it is about President Clinton, Monica Lewinsky, Kenneth Starr, or anyone else--not just because of professionalism concerns (which some employers might care more about and others less), but because of the risk that this speech will be found to be leg ally punishable. [12] I was asked to participate in this symposium by discussing the Clinton Administration and free speech in cyberspace, and I will do so. But inquiring into the Clinton Administration's role in cyberspace speech regulation may be asking the wrong question. I'm not sure that particular Administrations generally have much of a direct impact on free speech law (as opposed to the indirect impact, often not seen for decades, flowing from the decisions of the judges they appoint). The Clinton Administration, for instance, has mostly confronted free speech law incidentally and sporadically; the high-profile direct attempts to seriously restrict speech, such as the CDA, have largely come from Congress. [13] Moreover, the words "in cyberspace" in the phrase "restrictions on free speech in cyberspace" are generally, in my view, not terribly significant; the medium by and large does not and should not affect the protection--or lack of protection--given to the content. The CDA and the Child Online Protection Act [14] do pose some interesting cyberspace-specific questions, but even with these laws, most of the important issues are broader free speech questions: May speech be restricted if the restriction is in fact necessary to effectively serve a compelling government interest? …

When a King Speaks of God; When God Speaks to a King: Faith, Politics, Tax Exempt Status, and the Constitution in the Clinton Administration

Abstract: RANDY LEE [*] I INTRODUCTION The Clinton Administration has committed itself to clarifying the role of religion in the public sphere. To that effect, the Administration has released federal guidelines that clarify religious exercise and expression in the federal Workplace [1] and in public schools. [2] These guidelines have, in fact, reduced confusion and litigation in those intersections of religion and public life. [3] Administration activities, however, have clouded, rather than clarified, the role religion is to play in another part of the public sphere, political campaigns. Under the Clinton Administration, the Internal Revenue Service ("IRS") and the Department of Justice ("DOJ") have broken new ground in enforcement of the tax code's ban on "partisan political activity" [4] by tax-exempt religious organizations. [5] Meanwhile, the President himself has used church buildings [6] and religious services [7] for political campaigning, and his speeches endorsing particular candidates aggressively intertwine the political with the religious. [8] Critics of the Administration have seen in this inconsistent behavior the spectre of partisanship because the attention of the IRS appears to have been captured only by those religious groups whose political activities were in opposition to the President or his supporters. [9] Yet, a closer look suggests that the IRS and the President have moved in different directions because they understand the law differently. While the IRS has sought to give meaning to the code provisions tied to then-Senator Lyndon Johnson's efforts to neutralize political opponents, [10] the President has acted in accordance with political and religious norms and a constitutional interpretation that has dominated most of American history. [14] Yet even here, where the Administration's conflicting behavior has created confusion, it has catalyzed efforts to clarify the role of religion in the public sphere. While certainly the Administration cannot claim to have established clear lines for religious involvement in the political realm, as it has in public schools and federal workplaces, it has highlighted a real tension in this area that we have ignored over the years due only to restraint in enforcement and timidity in practice. Now confronted with this tension, we must resolve it. This tension implicates both the Free Exercise [12] and Establishment [13] Clauses of the First Amendment. Does the state prohibit the free exercise of religion when it restricts the questions that religious believers can pose? Does the state prohibit free exercise when it restricts the ability of religious believers to express their answers either to one another or to the outside world? Does the Constitution prohibit the state's establishment of a religion because the document seeks to separate church and state with a wall "high and firm," [14] or, instead, because it seeks to allow the two to function together in a way that preserves the integrity of both? In considering the guidance the executive branch has provided to resolve these questions, this article draws upon the positions of both the IRS and the President. [15] Initially, it concludes that when the state requires churches committed to speaking truth in the public square to choose between publicizing their beliefs and remaining tax-exempt, it burdens the free exercise of religion. In this context, for example, the state burdens free exercise when it restricts the questions that churches may place on voter guides or introduce during public debate. This is so because fundamental to the mission to speak truth is the freedom to select the questions that truly matter. [16] In addition, when the state forecloses churches from attempting to serve as a conscience to power, the state violates the Establishment Clause, because one of the real values of the Establishment Clause is guaranteeing that churches in America retain an unrestricted voice worthy of listening to. …

The Impeachment of President Clinton: An Ugly Mix of Three Powerful Forces

Abstract: KAREN A. POPP [*] I INTRODUCTION President Clinton should not have been impeached by the House of Representatives and, once impeached, was properly acquitted by the Senate. Thus, it should come as no surprise that I agree with much of what Professor Susan Low Bloch has written in her article, A Report Card on the Impeachment: Judging the Institutions That Judged President Clinton. [1] As Professor Bloch indicates, it is essential for us to assess how Congress arrived at the point of impeaching President Clinton, how the impeachment process itself worked, and what we can learn from it. [2] Indeed, much has already been written and said on these topics, and these issues will no doubt continue to be debated and analyzed for years to come. So, how do I rate the impeachment process of President Clinton? I would give it a failing grade. Although the Senate reached the right result by acquitting the President, the fact that the Senate voted as it did is cold comfort. The impeachment process should have never gone that far. In effect, the second parachute finally opened, just before the impeachment process hit the ground. One nevertheless wonders, "Why did the first parachute fail?" As the events were unfolding, it appeared that the 1998-99 impeachment debacle resulted in large part from an ugly mix of three extremely powerful forces: an independent counsel who abused his virtually unlimited power; extreme congressional partisanship that was motivated by the desire to gain control of the government; and media outlets that continuously sought to profit from the sensationalism of it all and consistently flouted standards of professional journalism along the way. These three forces appear all the more responsible for the impeachment now, with the benefit of hindsight. Each of these forces, standing alone, was powerful in its own right. Together, they were insurmountable. Before delving into an analysis of the combined effect of these forces, I must acknowledge that other factors--including the President--played key roles in the events that led to the impeachment. There can be no doubt that President Clinton's reckless and careless personal conduct with Monica Lewinsky contributed to the events of 1998 and 1999. Indeed, there could not have been a "Lewinsky matter" without that conduct. The President's conduct was wrong and regrettable, and he has acknowledged this. [3] The general public also played a role, at least in the beginning. Many people were mesmerized by the events that began to unfold in January 1998 and hence contributed to the media frenzy as cheering spectators. However, as 1998 wore on, the majority of Americans had grown tired of the exhaustive coverage of the Lewinsky matter. [4] Most people, although angry about the President's behavior, did not believe that he should be removed from office. [5] Unfortunately, the public's opinion did nothing to deflect the House Republicans from their chosen path--impeachment. The impeachment itself, which did not occur until eleven months after the story was first reported, however, would not have occurred at all but for the three forces indicated above--the independent counsel, the House Republicans, and the media. Those three forces are the focus of the remainder of my comments. It also is appropriate, for context, to describe briefly the constitutional backdrop against which the players waged the Clinton impeachment debate. II THE CONSTITUTIONAL STANDARD One may well ask whether the Constitution itself played some role in the wrongful impeachment of President Clinton. Does the Constitution set the standard for impeachment of a President too low? Although it may be too soon to know for sure, I would submit that the Constitution sets a sufficiently high bar for the impeachment of a President, but that bar was disregarded in the impeachment of President Clinton. The Framers established the standard for impeachable offenses in language that is now quite familiar. …

Writing off Race

Abstract: GIRARDEAU A. SPANN [*] I INTRODUCION The constitutionality of affirmative action has now become one of the central topics in the politics of race. Ironically, the United States Constitution says absolutely nothing about affirmative action. The text never mentions the term, and the equal protection language in the Fourteenth Amendment simply begs the question of whether equality requires or precludes the use of affirmative action. [1] The intent of the Framers is similarly unhelpful. We know that the drafters of the Fifth Amendment owned slaves, [2] and the drafters of the Fourteenth Amendment envisioned a racially stratified society. [3] But the Fourteenth Amendment was itself an affirmative action measure, [4] and few of us think that the racial prejudices of the Framers should continue to govern contemporary race relations. There are a host of fancier, non-interpretivist constitutional theories, including structural theories, moral theories, civic-republican theories, representation-reinforcement theories, public-choice theories, and postmode rn critical-race theories, [5] but none has sufficiently broad support to claim status as the one "authentic" approach to constitutional interpretation. Rather, they are parochial overlays imposed on a Constitution that is best understood as defining the terms of engagement for political bargaining. Given the increasingly transparent dominance of political policy considerations in Supreme Court constitutional adjudication, it is not surprising that recent strands of constitutional scholarship have chosen to advocate judicial minimalism, [6] and even the curtailment of judicial review. [7] Because the Constitution says absolutely nothing about affirmative action, the Supreme Court should have absolutely nothing to say about it either. Rather, the political branches should set the nation's affirmative action policy, and they should do so with political leadership provided by the President. President Clinton has both advocated and actively practiced affirmative action to the extent that he could do so without offending the racial policy preferences of the Supreme Court. But he has failed to perform a presidential function that has even greater constitutional significance. He has failed to contest the Supreme Court's usurpation of racial policymaking power from the political branches of government. II CLINTON'S SUPPORT OF AFFIRMATWE ACTION Proponents of affirmative action believe that the nature of racial discrimination in the United States is such that only the race-conscious reallocation of resources can promote racial equality. They think that raceneutral, colorblind approaches to civil rights will simply perpetuate the existing inequalities that have been imposed on racial minorities throughout the history of the nation. However, opponents of affirmative action believe that colorblind remedies for past discrimination can eventually provide equal opportunities for oppressed minorities. They think that race-conscious remedies will simply replicate in reverse the racial discrimination of the past. Although the political debate about affirmative action seems largely intractable, President Clinton has chosen to side with the proponents of affirmative action. After a formal review of the nation's affirmative action programs, the President formally adopted a "mend it/don't end it" policy, in the belief that a continued commitment to affirmative a ction remained central to the pursuit of racial justice in the United States. [8] He also attempted to make civil rights a priority on the national agenda by creating a blue ribbon Advisory Panel on Race, headed by historian John Hope Franklin, that gave the President specific policy recommendations on ways to promote racial reconciliation and to enhance equal opportunities for racial minorities. [9] Consistent with those actions, President Clinton has made executive and judicial appointments that have provided an unprecedented level of race and gender diversity in the federal government. …