Friday, October 14, 2011

Positive Law and Government Malfeasance

In a previous bit, I noted the blatant and near-commonplace disregard for the Constitution--the Law--shown by Senators via the introduction of revenue-raising bills in that body, prior to the passage of such bills in the House (the body Constitutionally ordained to produce all such bills). This practice is justified with legal trickery, with an assumption that legal maneuverings and loopholes can be freely exploited, whenever possible.

When it comes to the private sector, this is--unfortunately--absolutely true and is a consequence of having a society based on positive--not common or natural--law. Positive law refers to laws enacted (properly) in specific society for that specific society. In positive law, every action is subject to the same tests for legality. Despite the existence of the Bill of Rights, the vast majority of out legal code is positive law. The enumeration of powers in the Constitution is positive law (the assumption that the government has other powers--not expressly given--is not).

But government agents--including elected officials--are not operating within the same basic paradigm as common citizens. Citizens are looking out for their own interests, while government agents are --theoretically--looking out for the interests of society as a whole.

Thus, we expect government to abide by not only the letter of the law, but also the spirit of the law. Of course--as the previous bit made crystal clear--many government agents fail to do so, far too frequently in my opinion. I've been following the Solyndra scandal quite closer--as should be clear to frequent readers here--and the one issue in the mess that troubled me the most, once it became known, was the subordination of the governments investment to those of some private investors. The government--when it loans money--never does this. Government loans are always supposed to take priority, as a matter of law. If that is not acceptable to whomever is to get the loan, the loan doesn't happen.

Yet, the DOE loan to Solyndra was subordinated. This issue was the subject of discussion today on Capital Hill, as Treasury Department officials were called before the House Commerce and Energy Committee to testify about the Solyndra loan deal. According to the given testimony, officials in the Treasury Department did not believe that the loan could be subordinated (duh, that's the law) and thought the DOE's actions might be illegal (might?).

The DOE's response to this:
"Based on a careful analysis of the terms of the restructuring, the career officials in the DOE loan program determined that the restructuring was legal and that it did not require Justice Department review," LaVera said. 
Energy Department officials say the statute cited by the Treasury Department requires the Justice Department to approve a loan "compromise," in which a borrower is allowed to pay back less than the full amount of the loan. That was not the case in the Solyndra deal, they said.  
And while one portion of the law makes clear that a federal debt cannot be subordinate to other financing at the time of the loan, another section provides officials with broad authority to take action to protect the taxpayer in an emergency situation, they said.
Note what's going on here: the DOE is playing games by looking at the letter of the law and ignoring the very clear intent. And regardless, how could it possibly be the case that subordinating the loan (putting other people ahead of the taxpayers) would be a means of protecting the taxpayers?

It's obvious that some people at the DOE are in very serious trouble. The questions are, who benefited from this subordination and did that person or persons have other connections in the government, above and beyond the DOE? Because if--perish the thought--the line goes to the admin, if the subordination helped insure someone who is/was very close to the President, this really is a scandal. And Impeachment would rightfully be on the table, in my opinion.

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