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Lauren Weinstein: Congress' reaction to AIG bonuses -- am I the only one concerned? -- with comments Some facts frm Prof Tribe
From: David Farber <dave () farber net>
Date: Fri, 20 Mar 2009 12:16:49 -0400
Begin forwarded message:
From: dewayne () warpspeed com (Dewayne Hendricks)
Date: March 19, 2009 11:46:14 PM EDT
To: Dewayne-Net Technology List <xyzzy () warpspeed com>
Subject: [Dewayne-Net] Re: Lauren Weinstein: Congress' reaction to AIG
bonuses -- am I the only one concerned? -- with comments
[Note: This comment comes from reader Randall. DLH]
From: Randall Webmail <rvh40 () insightbb com>
Date: March 19, 2009 8:12:46 PM PDT
To: dewayne () warpspeed com
Subject: Re: [Dewayne-Net] Lauren Weinstein: Congress' reaction to AIG
bonuses -- am I the only one concerned? -- with comments
[Note: This item comes from friend John McMullen. I'm in
with John here. That said, I heard on MSNBC tonight that
the bill is
unconstitutional as is and is unlikely to ever become law.
that Pelosi did a neat Jedi mind trick on the GOP, which got
half their caucus to vote for a major tax increase, something
they've taken a blood oath not to do. DLH]
[[The Wall Street Journal has an obvious dawg in that fight, but
Laurence Tribe doesn't seem to]]:
It's the puzzle of the week down in Washington: how to get the money
back from the AIG bonus-recipients. As we've written before, the Obama
administration seems inclined not to play legal hardball for a variety
of reasons, one of which seems to be that it could wind up on the hook
for more than it would stand to recover.
The most current proposal: tax the bejeezus out of the recipients.
Senate Majority Leader Harry Reid and other congressional Democrats
have proposed a 91 percent tax. There are problems with this, too. The
NYT writes that some of the AIG employees are thought to be foreigners
based in offices abroad and not liable for U.S. taxes.
But could such a tax also run into Constitutional problems? Some
pundits (for example, here and here) have suggested yes. The most
commonly mentioned difficulties include the prohibitions on so-called
Bills of Attainder and retroactive laws (laws passed Ex Post Facto)
mentioned in Article I, Section 9 of the Constitution. Other possible
problems brought to our attention deal with the Contract Clause of the
Article I, Section 10; the Due Process Clause of the Fifth Amendment;
and the Takings Clause of the Fifth Amendment.
For a little help with this, we turned to Harvard's Laurence Tribe, he
of the canonized treatise "American Constitutional Law." In an email
exchange, we asked Tribe to address each of the five possible
constitutional problems and he determined none of them likely poses a
Bill of Attainder: Article I, Section 9 of the Constitution prohibits
Congress from passing Bills of Attainder, laws that punish a single
person or specific group of people without affording them a trial.
Would a law that targeted AIG executives violate the prohibition on
Bills of Attainder?
I do think Congress (and the Executive Branch) could avoid serious
Bill of Attainder problems by passing a sufficiently broad law …
rather than targeting a closed class of named executives even though
the prohibition against Bills of Attainder, unlike that against Ex
Post Facto laws, potentially reaches civil as well as criminal
Ex Post Facto: Article I, Section 9 of the Constitution also,
generally speaking, prohibits Congress from passing laws that apply
retroactively. Would a law that imposed a tax on past-gotten earnings
violate the Ex Post Facto Clause?
The Ex Post Facto Clause applies exclusively to criminal punishment
and poses no difficulty here. And the fact that the measure
contemplated would operate retroactively as well as prospectively
doesn't distinguish it from any number of tax and other financial
measures that the Supreme Court has upheld over the claim that
fundamental fairness precludes retroactively undoing contractual
The Contract Clause: Article 1, Section 10 of the Constitution states:
"No state shall . . . pass any Law . . . impairing the Obligation of
Contracts." Now, what about this? With the passage of the law,
wouldn't the government effectively be impairing contracts made
between AIG and its executives?
Tribe had a quick dispatch for the ol' Contract Clause:
The Contract Impairment Clause applies exclusively to state
legislation and has no federal counterpart that would pose any
difficulty in this setting.
The Due Process Clause of the Fifth Amendment: The Due Process Clause
of the Fifth Amendment states: "No person shall be . . . deprived of
life, liberty, or property, without due process of law."
On the issue of procedural due process — generally speaking, on
whether a person is given adequate access to the legal system and its
procedures — Tribe said this also isn't a problem.
There's no suggestion that people would be targeted for payback
obligations without notice and a fair opportunity to be heard on
questions such as mistaken identity, so procedural due process would
On the issue of substantive due process — that is, whether a "liberty"
has been taken away by a given act of Congress — Tribe said:
And, as to substantive due process, the only relevant requirement
would be that the challenged measure be rationally calculated to
achieve a legitimate government purpose, something nobody could deny
in this instance.
The Takings Clause of the Fifth Amendment: The Takings Clause of the
Fifth Amendment states: " . . . nor shall private property be taken
for public use, without just compensation." The clause is the one that
requires payment for property "taken" by the government's eminent
domain power — the power to, say, grab a piece of property to build a
public road. In response to our question on whether tax on AIG
executives might constitute an unconstitutional "taking," Tribe
Tax measures [generally speaking] are simply not vulnerable to
challenge under the Takings Clause. . . The point of the Takings
Clause is to require compensation for the fair market value of private
property validly confiscated for the public's benefit, not to prevent
the exaction of a tax that Congress is within its constitutional
authority to impose.
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- Lauren Weinstein: Congress' reaction to AIG bonuses -- am I the only one concerned? -- with comments Some facts frm Prof Tribe David Farber (Mar 20)