FISA, Immunity, Pardons, and Luthor Collins

The recent discussions about immunity in the context of the FISA bill have stirred up a great deal of frustration among people who have been shocked or disapproving of the Bush administration’s apparent cavalier attitude to complying with the law. This resentment no doubt provides some of the fuel for the populist movement that seems to be carrying Obama along. Both Republicans and Democrats have expressed to me frustration that there is not even any meaningful investigation of the charges. The administration does not have immunity but it does seem to operate with impunity.

Part of the public’s outrage about FISA relates to the appearance of hypocrisy. The same law-and-order people who advocate strong criminal sentencing standards advocate immunity for the corporate officials whose conduct apparently involved violation of constitutional rights on a massive scale. The sense of hypocrisy is heightened by the color and class distinctions between the criminal justice defendants and the corporate miscreants.

This frustration is very deep and involves what appears to be a failure of our system of checks and balances. The Republican Congress during the first six years of the Bush administration is widely seen as having allegiance to party over country or over the citizens of the country. During this time effort seemed to be directed to covering up the regularly occurring scandals. The two years of Democratic control of Congress have not been signifiantly different in terms of rendering people in the executive branch accountable for their transgressions. The FISA bill in granting immunity for illegal domestic surveillance was profoundly disillusioning for many. It went beyond disregarding disreputable behavior to condoning it.

FISA’s defender’s chant “national security” and to my knowledge there is nothing more than this rather empty slogan to support the position, a slogan that I had thought was used so much by the Nixon administration that it would not be heard again in connection with domestic activity. This slogan has also been used to justify the treatment of detainees and has been gradually rejected by the courts. Without anything to back it up it is just a slogan famously used around the world throughout the twentieth century. People need more substance to the claim for it to have traction outside of Congress.

The defenders of FISA point out that the guilty can still be prosecuted for crimes that were committed but few doubt that Bush will pardon everyone before leaving office. He, however, can only pardon for federal crimes and at least in theory any enterprising attorney general could investigate and prosecute under state law for crimes committed against its citizens. I doubt that anyone believes this will happen.

Bush is likely to pardon everyone in his administration, making the investigations promised by Obama unlikely. If McCain is elected he would not conduct investigations at all, at least as far as I know. The only way the Bush could be prevented from pardoning everyone would be for him to be impeached. If he were impeached, he could not grant pardons during the process. There appears to be no chance that this might happen.

Thus it appears that this itch to see criminal conduct exposed, or at least investigated, and punished will go unscratched regardless of the party favored in the next election. This rather sorry state of affairs is not without local precedent.

Civilization came to the Seattle area in the middle of the nineteenth century. Settlers first arrives on Alki, then some came to what is now the downtown area. A few located near the mouth of the Duwamish River between the two camps. Civilization, as everyone knows, requires government and the settlers were quick to elect a commissioner: Luthor Collins, our first governmental official. Two years after his arrival he was arrested for lynching a Native American. His civic leadership may have contributed to the dismissal of the charge. Later, having rooted himself in the administration of local affairs, he lynched two Native Americans and presumably it was his his august stature that prevented charges from being made.

Washington Distressed Property Law (2)

It appears that most of the complaints about the equity skimming law are originating with representatives of real estate agents. (See a comment to an earlier entry.) The reason for this is that the law impresses new duties on the agents and with the new duties the prospect of liability. Over the years there has been a good deal of marketing to get you to think of real estate agents as “real estate professionals.” This law they believe is taking this idea too far.

The crux of this concern is that real estate agents might be characterized as “distressed home consultants” who the new law says owe a fiduciary duty to the the distressed home owner, someone facing foreclosure. Courts have described “fiduciary duty” as the highest obligation of care, loyalty and good faith. Most distressed home owners believe that they are getting this from the person who is advising them. (For that matter many people who retain a real estate agent imagine that they are receiving this level of commitment.) Illegal equity skimming, at least the cases I have seen, all involve engendering this level of confidence in the home owner and practicing beneath that level.

Representatives of real estate agents argue that this is not fair to the agents because the standard is vague and broad in scope. Remember though that the law applies only to agents, as well as all other people, who meet the definition of “distressed home consultants.” The law describes two categories of these “distressed home consultants.” The first is a person who solicits or contacts a “distressed home owner” and makes a representation or offer to to provide a service that will avoid the foreclosure.

The statute lists 13 types of offers that render a person a “distressed home consultant.” They include such things as avoiding or delaying the foreclosure, arranging a lease with a purchase option and the like. Do any of these things and you are a “distressed home consultant” with a fiduciary duty to the home owner. Clearly a real estate agent could inadvertently say something that would render him or her potentially liable as a fiduciary. So could anyone else.

The other way a person can be a “distressed home consultant” is by systematically contacting owners of homes that are in foreclosure. If you systematically solicit people in foreclosure you owe them a fiduciary duty. This should reduce the wildly misleading solicitations that are routinely sent to people after a notice of foreclosure is recorded, then published. Home owners in foreclosure receive dozens of these mailed promises of relief. Real estate agents, and others, who do mass mailings and target these people fall under the definition.

“Fiduciary duty” is a court-defined term that has been in use since long before Washington was a state. It is a term imposed by the courts where there is a relationship of trust and dependence. Its scope is defined by published cases, trial judges and juries. Lawyers have a fiduciary duty to their clients. Escrow agents and closers have fiduciary duties to both the buyer and the seller. The successor trustee performing the foreclosure has fiduciary duties. Trustees of real estate trusts and all other trusts have fiduciary duties. Partners in real estate transactions have fiduciary duties to each other. The concept is far from alien in real estate transactions.

What is interesting to me is that the real estate agents who are so confounded by the idea of having a fiduciary duty already have a fiduciary duty to their clients. This was imposed by the courts some time ago. When agents represent the buyer and the seller, a “dual agency,” they have fiduciary obligations to both sides. I hope that they are aware of this.

I presume that the aspect of fiduciary duty that troubles real estate agents the most is the standard of care. If a real estate agent or anyone else presumes to tell a person in foreclosure what to do or promises relief from the foreclosure, he or she should be held to the standard of care of a profession that can give such advise. This is currently the law. A real estate agent has court approval to fill in the blanks on real estate forms. A real estate agent is not permitted to discuss with the client the legal effect of contractual provisions. This would be the unauthorized practice of law. They are supposed to refer the client to a lawyer for legal advise.

In the context of a foreclosure a real estate agent, or any other person offering advise about what steps to take, is usually offering legal advise regarding foreclosure procedure or legal artifices to avoid foreclosure. This is not something most people (including real estate agents) are qualified to do and it has recently led to broad scale disasters for home owners in connection with equity skimming. A real estate person or anyone else finding himself or herself in this situation should refer the home owner to a lawyer rather than offering legal advise. This is already the law.

Government Transparency

Seattle City Councilmember Nick Licata wrote and cosponsored a bill that amazingly enough required lobbyists for the first time to have to register before undertaking to lobby City government. This is his description of that process:

 

LOBBYIST REGISTRATION ORDINANCE

This Monday, March 17, 2008, the Council unanimously passed Council Bill 116154, the lobbyist registration ordinance. I developed this ordinance, and sponsored it, along with co-sponsors Tim Burgess, Richard Conlin, Jean Godden, and Tom Rasmussen.

 

PURPOSE/BACKGROUND

The purpose of the ordinance is to provide greater transparency in government, protect public confidence in government, preserve the integrity of the legislative process, and enable the public to see who is being paid to lobby elected officials. Seattle does not have a lobbyist registration ordinance, unlike every other major city on the West Coast: Portland, San Francisco, Oakland, San Jose, Sacramento, Los Angeles and San Diego all have lobbyist registration ordinances.

For a number of years I believed this needed to be rectified. I started working on such legislation in 2002 and testified before the Seattle Ethics and Elections Commission (SEEC) at that time on a prior version. Years before that another version had been brought before them but it was abandoned because a provision to track grassroots lobbying campaigns might discourage citizen groups in communicating with elected officials. I ran into the same problem in 2002 and in 2007 as well, when some citizen activists thought the legislation was too broad and should be narrowed.

In 2007 I began with a new draft and held a briefing in August in my Public Safety Committee. The following month I hosted a brown bag discussion at City Hall with over 2,000 invitations sent out. Representatives from Washington State, King County and Portland talked about their programs. That fall I met and had discussions with individual citizen activists, and communicated with members of the League of Women Voters and other groups, and gave presentations before Municipal League and other community groups.

As a result over a dozen versions of the ordinance were produced to meet most of the concerns that were raised. Although I felt at times that as each one was addressed the most serious shortcoming of the legislation, a new one would be identified as a must change. Because of the budget period beginning in the fall, I had to put off the ordinance to this year.

But in late 2007, during my term as Council President, I began having the sign-in sheets to the Council offices posted on the Council*s website. Many meetings between Councilmembers and City departments take place in the Council offices, so this allowed the public to see when city departments were meeting with Councilmembers.

I began January with a version that incorporated most of the recommendations, including dropping the grassroots lobbying section, and met again with SEEC. The much amended ordinance was passed by the Culture, Civil Rights, Health and Personnel Committee on February 27, 2008, and I believe now reflects the best practices for lobbyist registration ordinances. Laws in Portland, San Francisco, Los Angeles, San Diego, San Francisco, Denver, Sacramento, Austin, Madison, New York, and Columbus were reviewed in developing this proposal.

SUMMARY OF ORDINANCE

The ordinance requires lobbyists to register if they meet two conditions: 1) they are paid, and 2) they lobby at least four days during a quarter. This is the standard used by Washington State.Lobbying constitutes communication with Councilmembers, the Mayor, and their staff in an attempt to influence them to develop, propose, adopt or reject legislation. The ordinance requires disclosure of who is lobbying, who is paying them to lobby, and the subject and specific legislation they are lobbying on.

The Seattle Ethics and ElectionsCommission will be responsible for administration and enforcement. The reporting requirements are designed to be reasonable, and to use forms similar to those used by the State Public Disclosure Commission. The ordinance will go into effect in 180 days, or 30 days after SEEC adopts rules, whichever comes first. This is to allow sufficient time for implementation.

The ordinance requires the registration of public employees who are specifically employed to lobby, or lobbyists who are retained by an agency of government. Other public employees are exempted. This standard was based on the King County ordinance. Persons who limit lobbying to public sessions are also exempt, as are collective bargaining activities by labor organizations.

IN PURSUIT OF THE PERFECT

I thought writing this legislation should be fairly straight forward since both King County and Washington State have similar laws on the books and we adopted most of their features, recognizing that there were differences between them. In fact in reviewing other municipal lobbying legislation, there is considerable variation in exemptions, definitions, applications, and enforcement. It is difficult to say which is best.

Some reviewers of my legislation, like the Chamber of Commerce, suggested the ordinance be narrowed so as to not include lobbying *on behalf of others*; this could exempt, for example, developers who lobby for themselves (e.g. Industrial Lands, Downtown rezone, would have exempted many of the people lobbying.) I did not include this proposed change.

Others, like the SEEC, wanted employees of other government agencies to register as lobbyists rather than just their designated lobbyists, and some citizen activists wanted city employees to register as well. There was no support for either recommendation on the Council, I think for practical reasons. Elected representatives are paid to communicate with all types of government employees including those from other government bodies. Each communication, including emails, could conceivably have to be listed if someone felt it was influencing legislation. The amount of paper work generated could be staggering. I think that is the reason we have not found other municipal lobbying laws including those provisions.

It*s also noteworthy that among the 48 criteria the Center for Public Integrity used in determining that Washington State had the best state lobbyist registration law in the USA, they made no mention of requiring other governments or employees of a government to register.

My goal has been to get an ordinance passed so that at least Seattle would be on a par with other major west coast cities. This ordinance will accomplish that goal. Once it is up and running and we see how it works in practice, we can examine improvements. Ethics and Elections is required to issue an annual report to the City Council on the effectiveness of the ordinance. This will give us the tool we need to see how it works, and what to look at in the future.

 

 

City of Seattle Audit

For those intrepid souls willing to look at something written by an auditor, the Seattle Auditor’s report for 2007 gives an interesting list of areas in which the City needs improvement. Some are refrains we hear year after year, but the report should be taken as a potentially useful tool for those engaged with the City on any of the listed issues. It covers topics ranging form the massively under financed duty to represent indigents to the substantially disregarded Cable Customer Bill of Rights, which got so much attention when it was passed. The report is here. Those who do not already subscribe might be interested in Nick Licata’s newsletter called “Urban Politics.” To subscribe go to urbanpolitics-subscribe@speakeasy.net.

Seattle’s Mayor and Appearances

Greg Nickels unquestionably politically astute. He ballyhoos his efforts to get the cities to adopt the terms of the Kyoto accord, then his administration in less public forums cow-tows to developers within the City. More recently he promoted a homeless ordinance that is roundly condemned by representatives of the homeless, then this week announces a pilot program offering a small amount of money to people confronting foreclosure.

Seattle’s pilot program sounds like a good template for assisting people facing foreclosure, but its effect on the problem of homelessness is incremental.

Foreclosure Relief

Here’s a promising development. Seattle’s Mayor Nickels announced a pilot program which, through the offices of nonprofits Solid Ground and the Urban League of Metropolitan Seattle, will provide foreclosure relief to householders earning $48,000 to $50,000 per year, about 80% of the mean household income. The program will loan money to forestall foreclosure and provide debt counseling. The loans are limited to $5,000 and the funding is small, $200,000, but the program will be assessed after 6 months to determine its viability.

My guess is that the amount will turn out to be a bit low, as typically people pay their last cent avoiding a foreclosure. By the time a foreclosure is begun they have little money to pay the lender and the cost of curing the default is much higher than the sum of the monthly payments that were missed. Default interest rates, trustee’s fees, attorneys fees, title reports, publication costs and the like quickly escalate the cost of curing a default. It is not terribly uncommon for these foreclosure-related costs to come to $5000.

In reality these will be loans to the vigilant and the informed, as the amount of money offered is most likely to be helpful before the foreclosure has progressed too far and accumulated a lot of extra costs.

The thing about this that appeals to me and which highly recommends it, is that the grant is for a loan and is presumably secured. The borrower agrees to refinance or sell the property to repay the loan. If the borrower is forced to sell the home, the borrower at least gets to receive all the equity in the house. If these loans are properly administered, they should all be repaid, or at least substantially all of them should be. It strikes me as a win-win type of program: the money goes back to the government and the home owner either keeps the house or sells and gets all the equity. The government’s net savings are substantial by avoiding responsibility for any sort of relief to the working family.