I’m all in favor of creative ways to solve the foreclosure crisis. But I don’t think this is answer.

The government is soliciting ideas for ways to unload lots–big lots–of foreclosed properties currently owned by Fannie, Freddie, or FHA.

The Federal Housing Finance Agency (FHFA), in consultation with the U.S. Department of the Treasury and Department of Housing and Urban Development (HUD), has announced a Request For Information (RFI), seeking input on new options for selling single-family real estate owned (REO) properties held by Fannie Mae and Freddie Mac (the Enterprises), and the Federal Housing Administration (FHA).

The RFI’s objective is to help address current and future REO inventory. It will explore alternatives for maximizing value to taxpayers and increasing private investment in the housing market, including approaches that support rental and affordable housing needs.

“While the Enterprises will continue to market individual REO properties for sale, FHFA and the Enterprises seek input on possible pooling of REO properties in situations where such pooling, combined with private management, may reduce Enterprise credit losses and help stabilize neighborhoods and home values,” said FHFA Acting Director Edward J. DeMarco. “Partnerships involving Enterprise properties may reduce taxpayer losses and meet the Enterprises’ responsibility to bring stability and liquidity to housing markets. We seek input on these important questions.”

Kevin Drum rightly wonders what the point of this is, given that investors can already buy as many REOs as they want.

The point is volume: basically, the government would share ownership of the houses for such time as it takes the new owner to make them profitable again. And in exchange, the investor would be able to buy a bunch more houses.

The idea is to facilitate investors buying up whole chunks of homes in a particular market.

the agencies look forward to responses from market participants that have the technical and financial capability to engage in large-scale transactions with the Enterprises and/or FHA involving the disposition of REO.
A specific goal is to solicit ideas from market participants that would maximize the economic value that may arise from pooling the single-family REO properties in specified geographic areas. Under the management of a third-party, a joint venture or some other structure may respond to local economic and real estate conditions more effectively than individual sales. For instance, there may be certain metropolitan areas (or some narrower geographic designation) with a substantial number of REO properties and a strong rental market. In such locales economic value in REO disposition may be enhanced (and real estate markets begin to be stabilized) by turning a large number of REO properties into rental housing.

Call me crazy, but it seems the only reason such a program would be lucrative would be because it allowed one investor to corner significant chunks of the housing or rental market in a given city or neighborhood. Which, it would seem to me, would make for really abusive landlords: people with no competitive need to keep up their properties, with market dominance sufficient to raise rents beyond what the economy really supported, and enough pull at city hall to avoid accountability for doing these things.

Now, Jared Bernstein says we shouldn’t worry about using government subsidies to create TBTF slumlords.

I’ve heard two arguments against the idea.

[snip]

Second, investors buying foreclosed properties in bulk make lousy landlords.  It’s a valid concern, but there’s a policy wrinkle in the FHFA/admin’s plan that should help: the proposal—the RFI noted above—should include requirements regarding property management and the Feds should reject proposals that aren’t convincing in that regard.

But really, the language purportedly protecting against TBTF slumlords is flaccid. It lists “address[ing] property repair and rehabilitation needs” as one of six objectives (after, it must be said, “reduc[ing] REO portfolios … in a cost-effective manner” and “reduc[ing] average loan loss severities.” It requires private partners take on “most or all day to day management and operations, including property maintenance and rehabilitation, rental property management, marketing for sale.” And it only requires proposed plans to address, “steps taken to ensure that the properties are well maintained and managed during the period” as item 7, after already emphasizing, as item 2, “a focus on maximizing returns.” Nowhere does it require these hypothetical landlords to charge reasonable rates for rents.

In other words, while this plan may include lip service to the upkeep of these properties, nowhere does it limit what kind of price gouging these TBTF landlords could engage in (indeed, it places more emphasis on financial return than on societal return).

And of course, as happens with most of these Third Way public-private partnerships (cf. health care reform and the Wall Street bailout), it deals away key enforcement mechanisms precisely by helping corporations avoid market forces and encouraging them to become so big they can’t be held to account.

Ultimately, this seems to be an effort to find a shortcut out of the housing crisis by engaging in more corporate subsidies. Plus, it’ll take several months to put the program together, whereas offering subsidies to everyone right now might be faster with less market-distorting effect.

If the government is going to be subsidizing turning these properties around anyway, why not subsidize the average people that have gotten so screwed over by TBTF corporations in the first place? Why not subsidize the people who create stable communities–actual community members–rather than asking corporations to restore communities? Why struggle again to limit market forces in a such a way that only the big boys benefit?

I know Obama likes to claim, falsely, that government can’t create jobs, and because of that claim he believes all government help must be laundered through corporations. But corporations can’t create communities, which is really what’s called for here.

So Ron Bloom, Obama’s manufacturing czar and a key figure in the auto bailout, has announced he is leaving the White House to spend more time with his family.

Today, the White House announced Ron Bloom will be stepping down from his position as the Assistant to the President for Manufacturing Policy at the end of August.

[snip]

Bloom will be returning to his long-time residence of Pittsburgh, PA to take the opportunity to spend more time with his family.  

The press coverage of the timing of Bloom’s departure has focused more on what hasn’t happened yet than on what has. It emphasizes that Bloom is leaving before the government sheds the last of its stake in GM. And also notes that Congress probably won’t ever approve actually doing anything to support US manufacturing (in spite of the near unanimity it should).

Bloom won’t stay on to see the government completely exit the auto industry. The government still owns a 26 percent stake in General Motors Co. and 74 percent of Detroit-based Ally Financial. But it has completely exited Chrysler Group LLC, booking a $1.3 billion loss.

Bloom was initially tapped with working to boost the struggling manufacturing sector in September 2009 and took on the role full-time this year. He also oversaw the successful initial public stock offering of GM.

But efforts to further turn around manufacturing — including funding government programs — are likely to go nowhere since Congress is unlikely to approve any new money. Sperling said the Obama administration would still push Congress to do more to boost manufacturing.

But that misses one key aspect of the timing of Bloom’s departure.

Bloom’s announcement comes just days after reports that Congress will vote on Obama’s trade deals with South Korea, Panama, and Colombia and the Trade Adjustment Assistance. But reports on the deal make it clear that 1) Democrats failed to get a commitment to link the trade deal votes with the vote on TAA, and 2) John Boehner still has not committed to what order he’ll advance the bills.

The White House and Democrats are continuing to negotiate the terms of a vote with Speaker John A. Boehner (R-Ohio), who has said he plans to bring up for a vote the trade deals and the assistance program, known as TAA.

“While some sequencing details remain to be worked out, the speaker has now clearly committed to floor consideration of TAA, along with the trade agreements,” said Carol Guthrie, a spokeswoman for Kirk. “The Senate leaders’ agreement on a way forward is an important step on the path to submission of the pending agreements.”

[snip]

Democrats and the White House have wanted legislation renewing the trade assistance program to be voted on along with the three trade deals. Republicans have insisted that they be considered separately.

In a joint statement released late Tuesday, Reid and McConnell said separate votes would be held, with the vote on the trade assistance program coming first.

In other words, last week’s announcement opened the possibility that the trade deals might pass without the TAA that helps manufacturing workers transition into new jobs. And if TAA doesn’t get passed, that’s a huge chunk of investment in job creation that will be sacrificed to the TeaParty Congress.

And at precisely the same time as this possibility became more likely, the language Obama used to describe the trade deals got a whole lot more Orwellian, suggesting that the trade deals themselves–as opposed to the TAA–would help workers displaced by the trade deals.

Now, I don’t know whether there’s a connected between these trade developments and Bloom’s departure or not.

But I do know that Bloom won’t be around in September when this deal–with or without TAA–will be pushed through Congress.

This WSJ article–purporting to explain the difference between the 2008 crash from this crash (which is basically the extension of the earlier one)–is amusing for the way it avoids discussing the drop in real wages as the common cause for both crashes.

For example, it doesn’t consider why people were using their home as an ATM rather than spending non-existent wages on consumer goods in 2008…

The two crises had completely different origins.

The older one spread from the bottom up. It began among over-optimistic home buyers, rose through the Wall Street securitization machine, with more than a little help from credit-rating firms, and ended up infecting the global economy. It was the financial sector’s breakdown that caused the recession.

And then blames lack of trust (a version of the confidence fairy, I guess), rather than lack of customers, to explain why businesses aren’t investing or hiring.

The current predicament, by contrast, is a top-down affair. Governments around the world, unable to stimulate their economies and get their houses in order, have gradually lost the trust of the business and financial communities.

The two crises had completely different origins.

That, in turn, has caused a sharp reduction in private sector spending and investing, causing a vicious circle that leads to high unemployment and sluggish growth. Markets and banks, in this case, are victims, not perpetrators.

Aside from the way this ignores the “lack of customer” problem, since when does the business press’ flagship newspaper claim that the failure of the government to successfully stimulate business makes those inadequately government-stimulated businesses “victims”?

Someone has watched too many Cialis commercials.

The column continues, pretty much repeating the first difference using different words.

The second difference is perhaps the most important: Financial companies and households had feasted on cheap credit in the run-up to 2007-2008.

When the bubble burst, the resulting crash diet of deleveraging caused a massive recessionary shock.

This time around, the problem is the opposite. The economic doldrums are prompting companies and individuals to stash their cash away and steer clear of debt, resulting in anemic consumption and investment growth.

Once again, however, the column ignores that the same underlying problem–low wages forcing ordinary people to either rely on credit to continue spending, or stop spending–lies behind both crises.

Then, once again, the WSJ restates what is going on, repeating the claim that the failure of the financial bailout to work makes poor helpless businesses victims.

The final distinction is a direct consequence of the first two. Given its genesis, the 2008 financial catastrophe had a simple, if painful, solution: Governments had to step in to provide liquidity in droves through low interest rates, bank bailouts and injections of cash into the economy.

[snip]

The present strains aren’t caused by a lack of liquidity—U.S. companies, for one, are sitting on record cash piles—or too much leverage. Both corporate and personal balance sheets are no longer bloated with debt.

The real issue is a chronic lack of confidence by financial actors in one another and their governments’ ability to kick-start economic growth.

I find this last one the most interesting. The logic goes like this: Governments had to step in to provide liquidity (to banks, mostly). And they succeeded in making companies liquid (except for those burdened by the legal liabilities for the fraud they committed during the previous bubble, the WSJ forgets to mention). But for some reason that didn’t work, which makes these poor victim businesses lose confidence.

Somehow, the WSJ misses the obvious solution. Whether by direct government intervention, or by paying workers, you’ve got to put money in the hands of those who can stimulate the economy.

Our Dying Economy

Update: Reid just named his three picks for SuperCongress: Patty Murray, Max Baucus, and John Kerry. IMO, Kerry is actually a worse choice than Baucus (yeah, that’s me saying that), since Kerry was in favor of the 4T bargain but Baucus voted against the Catfood Commission recommendations. And frankly, we’re probably better off without Durbin, who was bad on these issues.

All those Republicans (and the President) calling on sucking up to the “job creators” to convince them to maybe, one day, create jobs, have Adam Smith’s version of capitalism all wrong.

Jared Bernstein makes an argument that every single Democrat should be making: our problem is not in Medicare, per se. It’s in health care costs (and Bush’s war and tax cuts). As Bernstein says, “An honest analysis of fiscal sustainability would point toward a larger, not smaller, role for publicly provided health coverage.”

A single mother of two from St. Louis rented a plane so she could fly by Wall Street with a banner reading, “Thanks For The Downgrade. You Should All Be Fired.”

H&R Block just agreed to modify $115 million worth of home mortgages in which it discriminated against black and Latino borrowers (presumably meaning it pushed people of color into subprime loans when they qualified for prime). This follows a similar, national settlement from Wells Fargo.

Justice and Injustice

Apparently, you can set out in your F250 after a party, saying, “let’s go fuck with some niggers,” find the first black man you see, beat him repeatedly, run him over with your full-size pickup and kill him, and not be charged with a hate crime. Or, if you weren’t driving the truck, charged with anything more than assault. (What I want to know is why no one at the motel stopped this before James Craig Anderson got killed.)

Back in 1994, Multiple Choice Mitt believed abortion should be safe and legal. Justin Elliott explains why: because when Mitt was 16, Mitt’s sister’s husband’s sister, Ann Keenan, died from an infection caused by an illegal abortion. She was 21 when she died in 1963. (h/t Susie)

The IRS was going to investigate whether a bunch of rich Republicans were evading gift tax laws by donating to 501(c)(4)s. But Republicans like Orrin Hatch and Dave Camp said “boo.” So the IRS backed off its investigation.”Boo!”

Our Dying Empire

The Council for Foreign Relations’ home journal confirms what we’ve heard elsewhere–al Qaeda is weaker than we’ve been led to believe. As it describes, al Qaeda didn’t even have the resources to wire Najibullah Zazi any money to buy hydrogen peroxide.

Carol Rosenberg and the Miami Herald have put together a list of everyone left at Gitmo.

As I noted yesterday, the 7th Circuit has permitted a Bivens lawsuit against Donald Rumsfeld to move forward.

I wanted to turn to a dispute not resolved in the opinion, which should be: whether or not Rummy changed the Army Field Manual after the Detainee Treatment Act so as to permit ongoing use of torture.

As the opinion notes, plaintiffs Donald Vance and Nathan Ertel claim that not only did Rummy ignore the DTA’s prohibition on torture, he secretly changed the Army Field Manual to permit it.

The plaintiffs contend that, after the enactment of the Detainee Treatment Act, Secretary Rumsfeld continued to condone the use of techniques from outside the Army Field Manual. ¶ 244. They allege that on the same day that Congress passed the Detainee Treatment Act in December 2005, Secretary Rumsfeld added ten classified pages to the Field Manual, which included cruel, inhuman, and degrading techniques, such as those allegedly used on the plaintiffs (the plaintiffs refer to this as “the December Field Manual”). Id. The defendants describe this allegation as speculative and untrue, but we must accept these well-pled allegations as true at the Rule 12(b)(6) stage of the proceedings.8

On appeal, the plaintiffs 8 cite a newspaper article reporting on the development of this classified set of interrogation methods. See Eric Schmitt, “New Army Rules May Snarl Talks with McCain on Detainee Issue,” New York Times (Dec. 14, 2005), available at http://www.nytimes.com/2005/12/14/politics/ 14detain.html (last accessed Aug. 4, 2011) (“The Army has approved a new, classified set of interrogation methods . . . The techniques are included in a 10-page classified addendum to a new Army field manual . . .”). The plaintiffs contend that Secretary Rumsfeld eventually abandoned efforts to classify the Field Manual, but that the “December Field Manual” was in operation during their detention and was not replaced until September 2006, after plaintiffs had been released, when a new field manual (Field Manual 2-22.3) was instituted. ¶ 244; Pl. Br. at 11. The dissent criticizes plaintiffs’ reliance on the newspaper report, but plaintiffs’ case for personal responsibility rests on allegations that are far more extensive. In any event, these are disputes of fact that cannot be resolved by a Rule 12(b)(6) motion.

But the thing is, Vance doesn’t need to rely on this newspaper article to prove a version of Appendix M authorizing their torture exists. They can rely on Steven Bradbury’s opinion describing Appendix M as it existed during their torture.

As a reminder, Vance and Ertel were detained by American troops around April 15, 2006 and sent to Camp Cropper a few days later; Ertel was released in May 2006 and Vance was released July 2006. While there, they allege, they were subjected to:

exposure to intolerable cold and continuous artificial light (no darkness day after day) for the duration of their imprisonment; extended solitary confinement in cells without any stimuli or reading material; blasting by loud heavy metal and country music pumped into their cells; being awoken by startling if they fell asleep; threats of excessive force; blindfolding and “hooding”; and selective deprivation of food and water, amongst other techniques.

On April 13, 2006, just days before Vance and Ertel’s torture started, in a memo for the file assessing whether changes to the AFM complied with the DTA, Steven Bradbury described Appendix M as it existed at that time. His description makes it clear that DOD had added six techniques not otherwise allowed by the AFM.

Appendix M of the FM 2-22.3, provides guidance for the use of six “restricted interrogation techniques” that are otherwise not permitted by the Field Manual.

Now, DOJ redacted four of the six techniques in releasing this memo under FOIA (the two left unredacted are “Mutt and Jeff” and “False Flag”). But comments that remain unredacted later in the memo make it clear that they involve precisely the kind of environmental manipulation, sleep deprivation, and solitary confinement inflicted on Vance and Ertel. Bradbury writes:

Similarly, the three “Adjustment” techniques are designed to change the detainee’s environment [3/4 line redacted] but without depriving him of any basic necessities or exposing him to dangerous or tortuous conditions. Whether these techniques are used separately or in tandem, the detainee is guaranteed to received adequate levels of food, water, sleep, heat, ventilation, and light. In addition, the detainee’s health must be continually monitored by medical personnel. These safeguards ensure that these techniques do not involve the infliction of punishment and negate any inference that they represent deliberative indifference.

Finally, the “Separation” technique expressly requires that the “basic standards of humane treatment” be maintained even though the detainee may be isolated from other detainees. A detainee subjected to this technique does not undergo sensory deprivation and thus is far less likely to suffer the adverse physiological consequences associated with that experience. M-51. In addition, the Separation technique is carefully limited in duration, which is not to exceed 30 days without express authorization from a senior military officer. With these limitations in place, and given the important role isolation can play in conditioning detainees for interrogation (including limiting the ability to frustrate or mislead interrogators by sharing information about the interrogation process), the Separation technique does not amount to punishment and is not shocking to the conscience. [my emphasis]

Bradbury’s description of detainees receiving adequate food and water, sleep, warmth, and light make it clear these are precisely the environmental factors manipulated under the “Adjustment” techniques. And his discussion of “Separation” makes it clear Bradbury is describing solitary confinement. Thus, while the description of these techniques may be redacted, they clearly must describe the techniques used on Vance and Ertel.

Now, at one level this memo–if Rummy weren’t pretending it didn’t exist–might help his case. After all, like the Yoo memos before it, this memo gives legal approval for torture, in this case stating that Appendix M techniques did not violate DTA.

But there are several reasons why, as used with American citizen non-combatant, the memo does not apply. Bradbury reveals, for example, that these techniques “may be used only during the interrogation of ‘unlawful enemy combatants’.” Vance and Ertel were actually given a detainee review board, and were called Security Internees, not Enemy Combatants.

Further, Appendix M as it existed when they were tortured “required that detainees receive adequate medical care,” something Vance and Ertel were specifically denied.

In addition, Appendix M prohibited the use of threats; but threats of “excessive force” were used with Vance and Ertel.

There’s one more out that Rummy might try to take. As I described in this post, this memo uses a structure I’ve not seen in any other OLC memo. Bradbury notes that he sent a letter (also on April 13, 2006) to DOD General Counsel Jim Haynes “advis[ing] that these documents are consistent with the requirements of law, in particular with the requirements of the Detainee Treatment Act of 2005.” We don’t have that letter. Rather, we have the memo that Bradbury wrote to the file. In other words, we have no way of knowing whether Bradbury communicated his caveats tying (for example) medical care to his judgment that the techniques described in Appendix M complied with the DTA (though we do know that the highest levels of DOD were involved in this approval process).

Now, aside from the fact that Bradbury’s direct quotes make it clear that those limitations were in Appendix M itself, there’s another problem with this. Both Bradbury’s unusual gimmick–as well as his subsequent failure to disclose it to Congress when specifically asked–is itself evidence that DOD and OLC were trying to hide their efforts to get around the clear meaning of DTA.

Here’s the specific refutation Rummy’s team made that his DOD revised the Army Field Manual before the torture of Vance and Ertel.

Nor is plaintiffs’ allegation that defendant Rumsfeld “modified” the Field Manual on “the same day Congress passed the DTA” to add “ten pages of classified interrogation techniques that apparently authorized, condoned, and directed the very sort of violations that Plaintiffs suffered.” SAC ¶ 244. Apart from relying on pure guesswork about the contents of supposedly classified information plaintiffs have never seen, there is no credible factual basis for the theory that the Field Manual was modified in any manner on December 30, 2005 (the DTA’s date of passage) or even in “December 2005,” id. ¶ 245, or that some portion of it is classified. To the contrary, the only update of the Field Manual since September 1992 was in September 2006, and no part of either of these versions is classified. Both the 1992 and 2006 Field Manuals are matters of public record and can be viewed in their entirety on the Internet at: www.loc.gov/rr/frd/Military_Law/pdf/intel_interrrogation_sept-1992.pdf (1992 Field Manual) [my emphasis]

Rummy claims that his DOD did not have a classified version of Appendix M; Rummy claims they didn’t update the AFM before September 2006.

Except his General Counsel got approval from OLC for that updated classified version of Appendix M just days before the torture on Vance and Ertel started.

This Politico story–“revealing” Obama’s campaign plan to brand Multiple Choice Mitt as “weird”–has gotten a lot of attention in the twittersphere.

Barack Obama’s aides and advisers are preparing to center the president’s reelection campaign on a ferocious personal assault on Mitt Romney’s character and business background, a strategy grounded in the early stage expectation that the former Massachusetts governor is the likely GOP nominee.

The dramatic and unabashedly negative turn is the product of political reality. Obama remains personally popular, but pluralities in recent polling disapprove of his handling of his job and Americans fear the country is on the wrong track. His aides are increasingly resigned to running for reelection in a glum nation. And so the candidate who ran on “hope” in 2008 has little choice four years later but to run a slashing, personal campaign aimed at disqualifying his likeliest opponent.

[snip]

The onslaught would have two aspects. The first is personal: Obama’s reelection campaign will portray the public Romney as inauthentic, unprincipled and, in a word used repeatedly by Obama’s advisers in about a dozen interviews, “weird.”

“First, they’ve got to like you, and there’s not a lot to like about Mitt Romney,” said Chicago Democratic consultant Pete Giangreco, who worked on Obama’s 2008 campaign. “There’s no way to hide this guy and hide his innate phoniness.”

A senior Obama adviser was even more cutting, suggesting that the Republican’s personal awkwardness will turn off voters.

“There’s a weirdness factor with Romney and it remains to be seen how he wears with the public,” said the adviser, noting that the contrasts they’d drive between the president and the former Massachusetts governor would be “based on character to a great extent.”

Now, no matter how reprehensible this campaign strategy is (particularly for the way it feels like Mormon-bashing), and for all Politico probably feels it has “won the morning” by printing it, both are missing something.

This campaign has already been in place.

A significant chunk of the tweets the Michigan Democratic Party sends out, for example, focus on Romney–showing Obama leading him, playing up GOP opposition to him, dissing his fundraising, recalling his stance on the auto bailout, branding his appearance in MI his “hypocrisy tour,” pitching other states’ anti-Mitt swag. While it has gotten better of late, for a while the MDP focused more on Romney-bashing than on Rick Snyder-bashing–which of course meant no one was attacking Snyder’s plan to tax seniors to pay for a tax cut for businesses.

Now, I understand MI may have a particularly driving reason to do this. Not only might Mitt’s ties to MI give him a critical edge over Obama that could flip a crucial swing state. But even at the primary level, MI’s cross-over voting might mean if Democrats support Romney, it could make a significant difference in him winning the Republican primary.

Yet, again, this early focus on Mitt has distracted from where I would like Democratic messaging to be targeted–not only on Snyder, but on the businesses that have looted our country. I would suggest this might explain why MI Dems have such little confidence in their party right now.

Obama may feel like he needs to call Mitt names to win re-election. But if that’s the sole purpose of the Democratic Party between now and then, it will leave a vacuum precisely where the most important messaging needs to be.

The 7th Circuit has just issued a decision in yet another case where a US citizen (actually, two of them–Donald Vance and Nathan Ertel) are suing Donald Rumsfeld for the torture they suffered at the hands of the military. (h/t scribe) The opinion allows the Bivens lawsuit to go forward.

Vance and Ertel are both American citizens who reported the contractor they worked for in Iraq, Shield Group Security, to the FBI for making payments to Iraqi sheikhs. Following the discovery of a cache of guns owned by Shield, Vance and Ertel were ultimately put in Camp Cropper and tortured. As the opinion describes,

After the plaintiffs were taken to Camp Cropper, they experienced a nightmarish scene in which they were detained incommunicado, in solitary confinement, and subjected to physical and psychological torture for the duration of their imprisonment — Vance for three months and Ertel for six weeks. ¶¶ 2, 20-21, 146-76, 212. They allege that all of the abuse they endured in those weeks was inflicted by Americans, some military officials and some civilian officials. ¶ 21. They allege that the torture they experienced was of the kind “supposedly reserved for terrorists and so-called enemy combatants.” ¶ 2. If the plaintiffs’ allegations are true, two young American civilians were trying to do the right thing by becoming whistleblowers to the U.S. government, but found themselves detained in prison and tortured by their own government, without notice to their families and with no sign of when the harsh physical and psychological abuse would end. ¶¶ 1-4, 19, 21, 52- 54, 161.

[snip]

Vance and Ertel were driven to exhaustion; each had a concrete slab for a bed, but guards would wake them if they were ever caught sleeping. ¶¶ 148, 149. Heavy metal and country music was pumped into their cells at “intolerably-loud volumes,” and they were deprived of mental stimulus. ¶¶ 21, 146, 149. The plaintiffs each had only one shirt and a pair of overalls to wear during their confinement. ¶ 152. They were often deprived of food and water and repeatedly deprived of necessary medical care. ¶¶ 151, 153-55.
Beyond the sleep deprivation and the harsh and isolating conditions of their detention, plaintiffs allege, they were physically threatened, abused, and assaulted by the anonymous U.S. officials working as guards. ¶ 157. They allege, for example, that they experienced “hooding” and were “walled,” i.e., slammed into walls while being led blindfolded with towels placed over their heads to interrogation sessions. ¶¶ 21, 157.

The decision, written by Obama appointee David Hamilton, had little patience for Rummy’s defense. It accused Rummy, first of all, of ignoring the detail alleged in the complaint so as to expand the meaning of Iqbal.

The defendants instead argue that plaintiffs have not alleged more than “vague, cursory, and conclusory references to [their] conditions of confinement, without sufficient factual information from which to evaluate their constitutional claim.” This argument, which is more of a pleading argument to extend Iqbal and Twombly than an argument about qualified immunity, is not persuasive. The defendants argue, for example, that while the plaintiffs allege that their cells were extremely cold, they provide no “factual context, no elaboration, no comparisons.” At this stage of the case, we are satisfied with the description of the cells as “extremely cold.” Cf. Fed. R. Civ. P. 84 and Forms 10-15 (sample complaints that “illustrate the simplicity and brevity that these rules contemplate”).
The defendants also suggest that the plaintiffs did not detail in their Complaint whether they sought and were denied warmer clothing or blankets. Even if it was not necessary, the plaintiffs actually specified the clothing and bedding that was available to each of them — a single jumpsuit and a thin plastic mat. The defendants also argue that plaintiffs did not specify how long they were deprived of sleep. That level of detail is not required at this stage, but a fair reading of this Complaint indicates that the sleep deprivation tactics were a constant for the duration of their detention, as was the physical and psychological abuse by prison officials.

It dismisses the argument–submitted in a amicus brief by the military–that regular military justice offered Vance and Ertel alternative means of justice.

For three reasons, however, we are not persuaded by the argument that a Bivens remedy should be barred because detainees who are being tortured may submit a complaint about their treatment to the very people who are responsible for torturing them. First, if, as plaintiffs allege here, there was a problem stretching to the very top of the chain of command, it would make little sense to limit their recourse to making complaints within that same chain of command.

Second, the opportunity to complain offers no actual remedy to those in plaintiffs’ position other than possibly to put a stop to the ongoing torture and abuse. A system that might impose discipline or criminal prosecution of the individuals responsible for their treatment does not offer the more familiar remedy of damages.

Third, during oral argument, plaintiffs’ counsel asserted that Vance and Ertel in fact did complain about their treatment while detained. At least one of the men had face-to-face conversations with the commander of Camp Cropper, who said there was nothing he could do about their treatment.

And it got really outraged when Rummy tried to claim the war constituted a special factor that should exempt the government from prohibitions on torturing its own citizens.

The defendants are arguing for a truly unprecedented degree of immunity from liability for grave constitutional wrongs committed against U.S. citizens. The defense theory would immunize not only the Secretary of Defense but all personnel who actually carried out orders to torture a civilian U.S. citizen. The theory would immunize every enlisted soldier in the war zone and every officer in between. The defense theory would immunize them from civil liability for deliberate torture and even coldblooded murder of civilian U.S. citizens. The United States courts, and the entire United States government, have never before thought that such immunity is needed for the military to carry out its missions.

[snip]

If we were to accept the defendants’ invitation to recognize the broad and unprecedented immunity they seek, then the judicial branch — which is charged with enforcing constitutional rights — would be leaving our citizens defenseless to serious abuse or worse by another branch of their own government. We recognize that wrongdoers in the military would still be subject to criminal prosecution within the military itself. Relying solely on the military to police its own treatment of civilians, however, would amount to an extraordinary abdication of our government’s checks and balances that preserve Americans’ liberty.

Now, the ruling is significant for a number of reasons. The facts here are very close to the facts in Doe v. Rumsfeld–the DC District case which was just allowed to move forward. In both, US citizens who were civilian employees in Iraq were tortured in Camp Cropper. Both took place after the Detainee Treatment Act. That’s particularly significant, since both cases argue that since Congress didn’t address torture of US civilians under the DTA, it both reinforces the notion there is no other remedy, but also rules out the possibility that Rummy simply couldn’t be expected to know that torturing American citizens was wrong.

The plaintiffs have adequately alleged that Secretary Rumsfeld was responsible for creating policies that governed the treatment of the detainees in Iraq and for not
conforming the treatment of the detainees in Iraq to the Detainee Treatment Act.

In fact, this case goes further, pointing to news reports that after DTA, Rummy rewrote part of the Army Field Manual (Appendix M) to permit torture to continue.

The plaintiffs contend that Secretary Rumsfeld eventually abandoned efforts to classify the Field Manual, but that the “December Field Manual” was in operation during their detention and was not replaced until September 2006, after plaintiffs had been released, when a new field manual (Field Manual 2-22.3) was instituted. ¶ 244; Pl. Br. at 11. The dissent criticizes plaintiffs’ reliance on the newspaper report, but plaintiffs’ case for personal responsibility rests on allegations that are far more extensive. In any event, these are disputes of fact that cannot be resolved by a Rule 12(b)(6) motion.

But this ruling–particularly the language about the immunity that a rejection of the Bivens suit would imply–applies in large part to Jose Padilla’s suit against Rummy for almost the same terms (though Padilla wasn’t even seized in a war zone).

This ruling in the 7th Circuit, with another ruling due at some point in Padilla’s 4th and 9th Circuit suits, as well as the DC District Doe case, all raise the chances that SCOTUS will have to answer the question of whether our government can torture US citizens with impunity.

Sure, Justice Roberts and his pals are likely to try to find some way to thread this needle, if not approve such treatment more generally. But it looks increasingly likely they’re going to have to decide the question one way or another.

Our Dying Economy

Banks are slashing jobs. I guess giving all that free money to “job creators” didn’t work out the way it was supposed to.

If Dodd-Frank could do what it was supposed to, the Feds would be busy resolving Bank of America right now–before the many suits, objections to settlements, and put-back claims put it out of business w/the FDIC stuck holding the depositer’s bag.

Helicopter Ben Bernanke’s Chief International Advisor, Nathan Sheets, has done the bureaucratic equivalent of jumping off a sinking ship: leaving, with apparently no notice, the day before the FOMC meets, in the middle of a massive international crisis. He’s cashing out his vacation days so as to give a month’s notice without actually have to stick around.

Justice and Injustice

The Merit System Protection Board has upheld a decision by TSA to fire an air marshall who whistleblew that the government was cutting back air marshall coverage. This is another one of those cases where the government is punishing someone for leaking information that was not even classified (properly).

Our Dying Empire

A McClatchy report notes that the 30 Americans lost over the weekend were fighting in an area where locals, because they’re sick of our night raids, now sympathize with the Taliban. The same article notes that more than 50% of our night raids hit the right target–which is another way of saying almost 50% don’t hit the right target. Also, it seems we have lost track of the guy we thought was mediating peace talks with the Taliban, which is supposed to be the whole point of these attacks against the Taliban. Remind me again how this is helping us beat the fewer than 100 al Qaeda members in Afghanistan?

An Egyptian court fined Hosni Mubarak and two others for shutting down the InterToobz in a bid to stop protests earlier this year. They responded by saying that others–including the current head of the Army Council, Mohamed Hussein Tantawi, that is running the country right now and longtime US ally Omar Suleiman–were involved in the decision. The judge wants to see the meeting notes to prove that. Those details may be very interesting, not least given the Egyptian military’s close ties to the US.

Carol Rosenberg reports that over half the detainees at Gitmo are choosing not to observe the Ramadan fast this year. The story also notes that we very thoughtfully switch to nighttime feeding schedule for those we force feed to prevent hunger strikes. I’m not sure we can make any conclusions about why prisoners are doing what they’re doing given that we talk about religiously observant forced feeding.

The Spy Who Came in from the Cold is back–with the scoop that the Osama bin Laden raid was sourced not to any detainee intelligence, but to a walk-in looking for the $25 million reward. (h/t CTuttle) Apparently, they were going to use a cover story of a drone strike, but the downed chopper made that impossible. I find the timing of this scoop–along with that of the of the New Yorker puff piece–interesting.

Particularly in light of the Administration’s recent rollout of its Transnational Criminal Organization program, the NYT’s article on our escalating war in Mexico raises several concerns. As I laid out, that program basically applies a number of GWOT tools–such as freezing of funds–to the fight against completely arbitrarily designated TCOs.

The NYT article shows how a terrorist approach has already been applied against Mexico’s drug cartels.

In recent weeks, small numbers of C.I.A. operatives and American civilian military employees have been posted at a Mexican military base, where, for the first time, security officials from both countries work side by side in collecting information about drug cartels and helping plan operations. Officials are also looking into embedding a team of American contractors inside a specially vetted Mexican counternarcotics police unit.

Officials on both sides of the border say the new efforts have been devised to get around Mexican laws that prohibit foreign military and police from operating on its soil, and to prevent advanced American surveillance technology from falling under the control of Mexican security agencies with long histories of corruption.

Let’s unpack this language: The US is operating on Mexican soil at least partly to prevent “advanced American surveillance technology” from falling into corrupt Mexican security agency hands. Any bets on what that advanced technology is, particularly given that we could presumably wiretap extensively from the comfort of our own Folsom Street room or similar? How about drones?

The U.S. government has begun deploying drones into Mexico after Mexican officials requested U.S. aircraft to help them fight drug-trafficking organizations.

Although U.S. agencies remained tight-lipped Wednesday on flying drones over Mexico, the chief of the Mexican National Security Council, Alejandro Poiré, admitted that his government asked for this type of support to gather intelligence.

Poiré in a statement said the Mexican government defines the operations, most of which take place in border areas.

“When these operations take place, they are authorized and supervised by national agencies, including the Mexican Air Force,” Poiré said Wednesday.

Furthermore, Poiré said, the governments were not breaking any national sovereignty laws because they were simply assisting in gathering intelligence. The drones are for surveillance only and are not armed.

So, particularly given Benjamin Wittes’ and my earlier agreement that one of the risks of drones is that some entity–a terrorist organization or a drug cartel–would gain control of one or more of them, reflect on the apparent fact that we’re deploying to Mexico, in part, to make sure that Mexico’s corrupt security agencies don’t have control of the drones we’ve got flying over Mexico.

This feels a lot like Pakistan already: the unreliable partner, the transparent fictions to make it appear as if a military invasion is not a military invasion.

Now add in the mercenar–um, I mean, the “team of American contractors.” A way to put boots on the ground while still pretending we’re not putting boots on the ground (don’t want to get into another one of those spats about what constitutes hostilities, you know).

“The government has argued that the number of deaths in Mexico is proof positive that the strategy is working and that the cartels are being weakened,” said Nik Steinberg, a specialist on Mexico at Human Rights Watch. “But the data is indisputable — the violence is increasing, human rights abuses have skyrocketed and accountability both for officials who commit abuses and alleged criminals is at rock bottom.”

Of course, our past use of mercenaries have shown they are susceptible to the same kind of corruption that we point to, in Mexico, as the reason why we need to station our own people there to keep (presumably) drones safe.

Now compare this report on Mexico from the NYT,

“The government has argued that the number of deaths in Mexico is proof positive that the strategy is working and that the cartels are being weakened,” said Nik Steinberg, a specialist on Mexico at Human Rights Watch. “But the data is indisputable — the violence is increasing, human rights abuses have skyrocketed and accountability both for officials who commit abuses and alleged criminals is at rock bottom.”

With this must-read story about how our night raids in Afghanistan–that get their target over 50% of the time (presumably meaning they hit the wrong target almost as often)–have led locals in the area where the 30 Americans got shot down over the weekend to sympathize with the Taliban.

“There are night raids every day or every other day,” said a second doctor who asked not to be identified because he feared for his safety. He said he lives about 100 yards from the parched riverbed where the U.S. Chinook helicopter crashed.

“The Americans are committing barbaric acts in the area and this is the reason that the Taliban have influence,” he said.

We’ve been using the tactics we appear to be rolling out now in Mexico for a decade already in Afghanistan and Pakistan. And while we’re down to just 50 or so members of al Qaeda, we seem to be destabilizing two already dicey countries.

And that’s the thing–and the reason I keep saying that using drones and mercs maybe isn’t the way to fight these transnational threats.

We’re arguing that the Mexican government is not strong enough right now to fly its own drones, much less defeat the cartels (even putting aside questions of the market we refuse to address here in the US). Yet to combat that, we’re chipping away at Mexican sovereignty.

Why, if these transnational threats are so dangerous to nation-states, do we keep using transnational forces to combat them?

I used to have a bit of a party trick last year before I moved out of SE Michigan. At some opportune time, I’d surprise folks by telling them the UndieBomber, Umar Farouk Abdulmutallab, was in a prison just 20 miles from where we were in Ann Arbor, one you’d pass on the way down to Ohio.

Every time I did this, people were surprised to learn he was at that prison.

I raise this because of one of four developments (reported by Josh Gerstein) in the Abdulmutallab case that might make the trial something beyond the routine trial in October I had been expecting. These are:

• Abdulmutallab is asking to have the trial moved out of Michigan
• Abdulmutallab is asking to have statements he made while under sedation suppressed
• Abdulmutallab is asking to have statements he made while at the Milan Correctional Facility suppressed
• The government is asking for a protective order to withhold information from Abdulmutallab that appears to include exculpatory information

Now, from the standpoint of the defense, I think the request for a change of venue is a big mistake (remember Abdulmutallab is defending himself, although he is being assisted by a lawyer who seems to have been very involved in these filings). Given that this is a counterterrorism case, I presume it would only be moved to NY, DC, or VA. I suspect the jury pool would be demographically better for Abdulmutallab in MI than (at least) in VA. And, as my little party trick suggests, even people from among the jury pool who are exposed to counterterrorism issues on a regular basis (because they hear me talk about torture and wiretapping and such things) had pretty much forgotten Abdulmutallab was there just months after the attack. Finally, while I don’t know the entire manifest of the plane that Abdulmutallab allegedly attacked, Detroit is a hub, which means a lot of the passengers on the plane presumably connected on to somewhere else.

More importantly, if Judge Nancy Edmunds does consent to Abdulmutallab’s request, it will likely reignite the debate about what kind of trials alleged terrorists should have, and where. I assume at least some Republicans would use the event of a venue move to argue Abdulmutallab should be tried in Gitmo.

Particularly given the other filings in the case.

As a reminder, Abdulmutallab was detained in Detroit and taken to University of Michigan hospital for treatment. Throughout this period, Abdulmutallab was talking–under a public safety exception, the government has said. Then, 10 hours later, he was read his Miranda rights, and he stopped talking until such time as–weeks later–his family convinced him to talk.

But according to Abdulmutallab, in addition to the Miranda issue during the early period when he was talking (which I don’t expect to get much traction because it seems to fall squarely under a public safety exception), for part of it he was also under sedation, and hospital staff told federal agents he was not fit to be interrogated.

That hospital staff advised federal agents that the Defendant was in no position to conduct a legal interview because he had just been administered 300 mg of fentanyl. [sic–as Jim points out this seems to be the wrong dose]

That hospital staff were direct and clear when advising federal agents that the Defendant would not be able to conduct a legal interview for four to six hours.

In addition to challenging the admission of these statements (note, I think Abdulmutallab did speak to agents even before this), he is also trying to suppress statements made while at the prison they held him. He claims statements he made there–he seems to claim, all of them, which I find dubious–were made in the course of discussions about a plea agreement.

Defendant ABDULMUTALLAB met with government agents on numerous occasions at the Milan Correctional Facility. The government intended to obtain incriminating statements from Defendant regarding the alleged incident on December 25, 2009. In addition, the government engaged in plea negotiations with the Defendant during the meetings.
Before the meetings began, the government agents verbally agreed that they would not use any statements Defendant made, against him. Defendant relied on the government’s representation – as officers of the court – and made incriminating statements. See United States v. Dudden, 65 F.3d 1461, 1467 (9th Cir. 1995) (the government can grant the defendant varying degrees of immunity in an informal agreement). Allowing the government to use these statements at trial will violate the government’s agreement with Defendant.

Now, as I said, I find this much more dubious. There were several stages of interrogation at Milan (pronounced “My-lan,” btw). And I don’t believe all of these would have been in the context of plea negotiations.

Finally, there’s the government’s motion requesting a protective order,

…precluding discovery of certain classified information and precluding the defendant from inquiring of certain subjects during the cross-examination of government witnesses, because cross-examination of these subjects may result in the disclosure of classified information. The classified information the government seeks to protect is either not exculpatory, is privileged, or otherwise not discoverable.

Now part of this seems to stem from the fact that Abdulmutallab is defending himself (and so would get access to all this material himself–with many of the other alleged terrorists in civilian proceedings, their lawyers get such information, but they are forbidden from disclosing the information to their client). But note that last compound statement: this is information that is either not exculpatory or is privileged or is “otherwise not discoverable.”

This filing seems to suggest that some of this information is exculpatory, but is privileged (If it were really “otherwise not discoverable,” then why would it be included in this filing?). And they don’t even bother to say what kind of privilege. Is this a back-door state secrets declaration? The part of the filing that discusses this information is entirely classified.

And think of what kind of information this might possibly be. Just guessing here, but I think it might include,

• Details about interrogation methods used with Abdulmutallab
• Details about any pressure they used to convinced Abdulmutallab’s family to help get him to cooperate (remember Abdulmutallab’s father is a prominent Nigerian banker)
• Information about Anwar al-Awlaki, including (potentially) information that shows AQAP didn’t consider Abdulmutallab a serious member; note this might include SIGINT
• Information about how the government had information about Abdulmutallab, but didn’t act on it

I have no idea which of these they’re trying to hide, or even if I’ve thought of everything. But given how some of these issues–interrogation techniques, pressure on the family–go to behaviors that might otherwise be illegal, but seem to be increasingly used with alleged terrorists tried in civilian courts (both, I believe, were factors in Faisal Shahzad’s treatment), I find it interesting that the government refuses to share it with Abdulmutallab.

What I find interesting about all this, taken together, is what it suggests about our treatment of counterterrorism. This should be an open-and-shut case. There are tens of witnesses that saw Abdulmutallab try to blow up a plane, and at least some of his own statements must be admissible. But because of the way we’ve treated it, it seems to have introduced issues entirely of the government’s own making that will make it harder to try in civilian court. The government seems to be unable or unwilling to cleanly bracket off intelligence gathering. And–if the suggestion they’re hiding exonerating evidence under some kind of privilege is right–they continue to be unwilling to give alleged terrorists access to the exonerating information learned in intelligence collection, either.

I don’t think this makes the case for military commissions, which after all are mostly an attempt to pretend such actions don’t affect the legitimacy of the trial. But they seem to have unnecessarily introduced all the challenges they complain about when they try to justify military commissions.