Sunday, March 22, 2009

I'm Confused

Dear Mr. President,

Are you familiar with the “shareholders derivative suit”? It is a standard tool of corporate governance. It allows shareholders to sue the directors of a company for bad results. To be precise, the directors may be held personally liable for losses suffered by the company if they acted in bad faith, engaged in self dealing or failed to exercise due diligence. Making a bad business decision is not grounds for liability; making a bad decision without doing your homework is. Which calls to mind the AIG bailout and claims by various members of the government that they had no knowledge of the retention bonuses. Given your public commitment to transparency and accountability, would you kindly introduce legislation allowing voters to sue, personally, all members of Congress and the Executive who failed to do their homework?

I realize that most of these individuals have not yet ascended to the ranks of the Truly Evil Rich, so it would not be feasible to recover from them the billions they have frittered away. I would propose more modest consequences. Those found liable would be removed from office, disqualified from future office (even dogcatcher), lose all benefits (including campaign funds socked away for a rainy day) and be subjected to audits going back to three years before they first took office.

Applying this new liability to the AIG case does prevent some difficulties. Retroactive penalties are generally disapproved of as ex post facto laws, which are prohibited by the Constitution. Similarly, affected individuals may also claim that, by being singled out for punishment, they are the subjects of a Bill of Attainder, also prohibited by the Constitution. You may recall that the Bill of Attainder was a favorite tool of Henry VIII of England. He used it to legally murder a number of those who opposed, or simply displeased him. Yet, coming from the current Congress and Administration, the claim would would ring false. Recent legislation designed to recover the retention bonuses through punitive taxes certainly seems to be little more than legislation intended to punish a disfavored few.

Curiously, that disfavored few have attained that status by living up to their contracts. They EARNED the bonuses that have caused so much fuss. They kept their end of their deal with their employer – AIG – and the US government. If they snookered us, you and your should be attempting to discover who dropped the ball, not on how to welch on what turned out to be a bad deal for the US.

In sum, I am confused. It would seem that our Republic is in the hands of dishonest, vindictive incompetents willing to sacrifice even our most fundamental protections to preserve their positions of power. Your silence on these questions suggests that either you do not understand them or find no reason to object to them. You promised us “hope” and “change.” I hope you did not intend such an appalling change for the worse.


PS I apologize for the slight deception in my last letter. I know there are not 37 Articles to the US Constitution. I was citing the Constitution of the former Soviet Union.

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