October 22, 2010

From the Desk of Judicial Watch President Tom Fitton:

More Barney Frank Lies Exposed

If you listen to Rep. Barney Frank (D-MA) defend his role in the meltdown of Fannie Mae and Freddie Mac, he was just as blindsided as the rest of us when the two government sponsored enterprises collapsed, triggering the financial crisis.

Frank has been peddling this fiction ever since the economy collapsed in September 2008. But as the The Boston Globe notes in a new, devastating article published on October 14, not many people are buying Frank’s lies anymore. And Frank knows it. He’s facing a surprisingly tough reelection fight, so he’s on an apology tour through the media to save his seat. (Judicial Watch does not endorse or oppose candidates for public office.)

Here’s an excerpt from the Globe piece (although I highly recommend you read the article in full):

When US Representative Barney Frank spoke in a packed hearing room on Capitol Hill seven years ago, he did not imagine that his words would eventually haunt a reelection bid.

The issue that day in 2003 was whether mortgage backers Fannie Mae and Freddie Mac were fiscally strong. Frank declared with his trademark confidence that they were, accusing critics and regulators of exaggerating threats to Fannie’s and Freddie’s financial integrity. And, the Massachusetts Democrat maintained, “even if there were problems, the federal government doesn’t bail them out.”

Now, it’s clear he was wrong on both points…

Here’s the thing. Frank wasn’t wrong. He was lying.

Frank claims that he “missed” the warning signs with Fannie and Freddie because he was wearing “ideological blinders,” which was just his lame attempt to blame Republicans. But we all know he didn’t miss them. He just chose to ignore them.

Judicial Watch uncovered documents last year proving that members of Congress, including — and perhaps especially — Barney Frank, were well aware that Fannie and Freddie were in deep trouble due to corruption and incompetence and yet they did nothing to stop it.

Remember this statement by Frank during a hearing on September 10, 2003, before the House Committee on Financial Services considering a Bush administration proposal to further regulate Fannie and Freddie?

I want to begin by saying that I am glad to consider the legislation, but I do not think we are facing any kind of a crisis. That is, in my view, the two government sponsored enterprises we are talking about here, Fannie Mae and Freddie Mac, are not in a crisis. We have recently had an accounting problem with Freddie Mac that has led to people being dismissed, as appears to be appropriate. I do not think at this point there is a problem with a threat to the Treasury.

I don’t think there was any question Frank knew then that there was a threat to the Treasury. But let’s say, just for argument’s sake, that you happen to believe Barney Frank honestly “missed” the warning signs in 2003 and 2004. What about 2008?

According to the Globe story:

In July 2008, then-Treasury Secretary Henry Paulson called Frank and told him the government would need to spend “billions of taxpayer dollars to backstop the institutions from catastrophic failure,” according to Paulson’s recent book. Frank, despite that conversation, appeared on national television two days later and said the companies were “fundamentally sound, not in danger of going under.”

Unlike 2003 — when, Frank said, he didn’t realize what was going on — this time, he was deliberately trying to reassure the public, he said.

“It was part of a conscious strategy to say to people, ‘Hey, look, we think we can handle this,’” he said. “It didn’t work.”

Less than two months later, the government seized Fannie and Freddie and the bailout began.

And it hasn’t stopped yet. Just yesterday, we learned that the Obama administration projects losses on the two entities could approach $363 billion. And there is no upper limit to taxpayer losses over the long term.

I find it pathetic and insulting that Barney Frank, the consummate Washington insider, would try to “play dumb” with respect to corruption at Fannie and Freddie. He knew what was happening at Fannie and Freddie. He actively blocked attempts to reform the institutions and then lied, by his own admission, to the American people about the whole sordid affair.

Frank’s unwillingness to hold Fannie and Freddie accountable has nothing to do with wearing “ideological blinders.” It has to do with Frank’s “ethical blinders.”

Florida Court Slams Obamacare

With lawsuits against Obamacare currently winding their way through the courts, there is no question the “law” will eventually arrive before the U.S. Supreme Court. In the meantime, however, a federal judge in Florida recently (and quite colorfully) questioned the constitutionality of Obamacare as he ruled that the state’s pending lawsuit can go to trial.

According to The Washington Times:

A federal court judge in Florida ruled…that key portions of a lawsuit challenging the Obama administration’s health care reform law can go forward, and accused the Justice Department of taking an “Alice-in-Wonderland” approach to its defense of the controversial “penalty” for people who don’t buy insurance.

Though it’s just a preliminary ruling, Senior U.S. District Judge Roger Vinson’s decision to let the case proceed is a victory for opponents of the law, since it means he will ultimately decide the merits of the challenge brought by 20 states.

Judge Vinson said the states can challenge the constitutionality of whether provisions in the law violate state sovereignty through expansion of the Medicaid program and if Congress exceeded its authority by forcing people to obtain health insurance or pay a penalty.

Judge Vinson’s “Alice in Wonderland” comparison relates specifically to some clever word-smithing on the part of Democrats when they rammed Obamacare through Congress. Opponents of Obamacare argued that the penalties associated with the “healthcare mandate” really represented a massive tax increase on the middle class. Liberals scoffed at the notion, arguing that the “healthcare mandate” would result in “penalties,” not taxes. Judge Vinson saw right through this argument in his ruling, which you can read in its entirety here:

Congress should not be permitted to secure and cast politically difficult votes on controversial legislation by deliberately calling something one thing, after which the defenders of that legislation take an “Alice-in-Wonderland” tack and argue in court that Congress really meant something else entirely, thereby circumventing the safeguard that exists to keep their broad power in check.

Judge Vinson’s decision shows that Obamacare is not only a constitutional issue, but also a corruption issue.

As the Times piece points out, this is a preliminary ruling, but it certainly demonstrates that Judge Vinson has some significant concerns regarding the constitutionality of Obamacare, as do most Americans across the country.

The article notes that there are at least 20 states suing over Obamacare, and they include: Alabama, Alaska, Arizona, Colorado, Georgia, Indiana, Idaho, Louisiana, Michigan, Mississippi, Nebraska, Nevada, North Dakota, Pennsylvania, South Carolina, South Dakota, Texas, Utah and Washington. As key components of the law come into effect over the next few years, we can expect more legal challenges.

You may recall that in May Judicial Watch held an educational panel that asked the question, “Is Obamacare Unconstitutional?” (You can check out the video here.) Here’s a quick excerpt from comments by Congressman Jim Sensenbrenner (R-WI), one of our panelists, on the issue of a healthcare mandate:

Consider for a moment the 1994 debate about Hillarycare, which never did pass the Congress of the United States. The Congressional Budget Office said that an individual mandate was an unprecedented form of federal action, and that Congress has never forced people to buy any good or service as a condition of law for residents of the United States. That is exactly the constitutional issue on the individual mandate the courts are going to be called upon to decide.

Your Judicial Watch is also on the case. In addition to monitoring the constitutional challenges, we are investigating the implementation of the Obamacare system by Big Government bureaucrats at HHS and at other government agencies.

JW Pursues Justice against Afghanistan for Victim of 9/11 Terrorist Attacks

More than nine years after the attacks of 9/11, Judicial Watch continues to pursue justice on behalf of a widower of one of the victims that day. In fact, JW attorney Jim Peterson was in a federal court in New York last week arguing our case against the Islamic State of Afghanistan and Osama bin Laden on behalf of our client, “John Doe.”

I have not covered this lawsuit in quite a while, so let’s just take a quick look at the back-story.

On 9/11, our client’s wife, “Jane Doe” was attending a meeting on an upper floor of the south tower of the World Trade Center when United Airlines flight 175 struck the tower several floors below. “Jane Doe” was 47 years old at the time of her death and was survived by her husband, our client and their two children.

In December 2001, Judicial Watch filed a civil lawsuit on behalf of “John Doe” with the U.S. District Court for the District of Columbia against Bin Laden and the State of Afghanistan “for conspiracy and wrongful death under the noncommercial tort exception of the Foreign Sovereign Immunities Act (FSIA).”

This “noncommercial tort exception” provides that a foreign state shall not be immune from liability in any case “in which money damages are sought against a foreign state for personal injury … occurring in the United States and caused by the tortious act or omission of that foreign state….” (“Tortious” is a legal term for “wrongful.”)

Now, catching you up to date quickly on what has transpired since. In 2003, the court clerk filed a default against Afghanistan for failing to respond to the lawsuit. Afghanistan eventually did respond in 2004, moving to vacate the default and filing a motion to dismiss the lawsuit. In September 2008, Judicial Watch earned a major victory when the U.S. District Court “denied without prejudice” Afghanistan’s motion to dismiss. Afghanistan quickly appealed the lawsuit and got it moved to the U.S. Court of Appeals for the Second Circuit, where it now sits.

Lawyers for Afghanistan are attempting to argue, based on a previous (and awful) ruling by the Second Circuit, that Judicial Watch’s client is not entitled to sue under the “noncommercial tort exception” of the FSIA. They say a country can only be held accountable for terrorist acts if they are on the State Department’s list of terrorist supporting countries. (The other decision concerned lawsuits brought by our client and other 9/11 victims against Saudi financiers of the 9/11 attacks.)

As we argued, another court found that the issue is relative simple, ruling that “the noncommercial tort exception applied to ‘all tort actions for money damages’ and ‘seems facially to apply to Doe’s factual allegations.’”

Actually, the Court took it much further than that, saying that Afghanistan’s interpretation of this exception is “peculiar” and would lead to an “absurd” result Congress could not have intended.

I am going to include quite a bit of language from our complaint on this point because I want to drive home the importance of this lawsuit and why Judicial Watch continues to fight so aggressively in court on behalf of our client nine years after the attacks:

…As the District Court correctly observed, the construction of the FSIA advanced by Afghanistan would lead to absurd results, which Congress most certainly did not intend when it adopted § 1605(a)(7) [exceptions to the immunity of a foreign state]. For example, because § 1605(a)(7) applies not only to terrorist attacks, but also acts of kidnapping, torture and extrajudicial killing, Afghanistan’s interpretation of the FSIA would permit foreign sovereigns to kill, torture and hold hostage U.S. citizens on American soil with impunity, so long as they are not designated state sponsors of terrorism.

Furthermore, because jurisdiction under § 1605(a)(7) is available only where the claimant or victim was a national of the United States at the time of the underlying incident, Afghanistan’s theory…would leave aliens killed or injured in terrorist attacks on American soil with no basis for obtaining subject matter jurisdiction over a responsible foreign sovereign for their injuries, even where the responsible foreign sovereign is a designated state sponsor of terrorism.

Likewise, because § 1605(a)(7) does not apply to claims for “property damage,” Afghanistan’s construction of the FSIA would leave victims of property damage caused by terrorist attacks in the United States without any means for obtaining jurisdiction over a responsible foreign sovereign, even if those victims are U.S. nationals and the responsible foreign sovereign is a designated state sponsor of terrorism.

Congress simply could not have intended such absurd results when it provided additional rights to victims of terrorist attacks through the adoption of § 1605(a)(7).

Put another way, Afghanistan’s interpretation of the FSIA exception would allow Judicial Watch to sue Afghanistan if its ambassador ran over our client’s cat, but not for sending terrorists to murder nearly 3,000 innocents, including our client’s wife. This we cannot abide and neither should the court.

Until next week…

Tom Fitton
President

Judicial Watch is a non-partisan, educational foundation organized under Section 501(c)(3) of the Internal Revenue code. Judicial Watch is dedicated to fighting government and judicial corruption and promoting a return to ethics and morality in our nation’s public life. To make a tax-deductible contribution in support of our efforts, click here.

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