New Federal Initiatives Project

Key Provisions of the Regulatory Accountability Act

26 Jan 2012 21:40:01 GMT

Background

On December 2, 2011, the United States House of Representatives passed the Regulatory Accountability Act of 2011 (H.R. 3010). This legislation would amend the Administrative Procedure Act (APA), which governs the federal rulemaking process. It would codify existing rulemaking requirements contained in executive orders and create new rulemaking requirements.

Key Provisions

Specifically, the bill would:

1) Require Agencies to Conduct Cost-Benefit Analysis of Their Regulations

Agencies already are required to conduct cost-benefit analysis under existing executive orders. The proposed legislation would codify this requirement in the APA.

When considering the potential costs and benefits, agencies shall consider "direct, indirect, and cumulative costs and benefits and estimated impacts on jobs (including an estimate of the net gain or loss in domestic jobs), economic growth, innovation, and economic competitiveness."

2) Generally Require Agencies to Adopt the Least Costly Alternative

A cost-benefit analysis requirement would have little meaning if the analysis were simply an academic exercise. The legislation requires that agencies "shall adopt the least costly rule considered during the rule making�that meets relevant statutory objectives."

This last provision is important because it clarifies that the objectives of the statute are not to be compromised simply because a proposed rule may be less costly.

But, an agency may adopt a more costly alternative that achieves statutory objectives "only if the additional benefits of the more costly rule justify its additional costs and only if the agency explains its reason for doing so based on interests of public health, safety or welfare that are clearly within the scope of the statutory provision authorizing the rule."

3) Expand Requirements to Independent Agencies

The new rulemaking requirements also would be imposed on independent agencies.

Since executive orders may not dictate the process that these independent bodies must follow, a statutory change would be required to cover their rulemaking.

On July 11, 2011, President Obama issued Executive Order 13579 that requested that independent agencies meet regulatory requirements applicable to executive agencies. Any President would no longer need to make such a request�critical rulemaking procedures would be mandated for all agencies including independent agencies that often promulgate major rules.

4) Require Advance Notice of Proposed Rulemaking for Major Rules, High Impact Rules, and Rules Involving Novel Legal or Policy Issues

Agencies must publish an advanced notice of proposed rulemaking (ANPRM) in the Federal Register at least 90 before publishing a notice of proposed rulemaking (NPRM).

In the advanced notice, the agency must detail several things, including the legal authority for the rule and "solicit written data, views or argument from interested persons concerning the information and issues addressed in the advance notice." Interested parties would have at least 60 days to provide their submissions to the agency.

The following definitions would apply:

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The "Startup Expansion and Investment Act," HR 2941

3 Nov 2011 22:03:39 GMT

By Alex J. Pollock

The much-debated Section 404 of the Sarbanes-Oxley Act of 2002 imposed significant cash expenses and compliance burdens on U.S. public companies, through its requirement for expensive certifications of internal control systems by outside auditors. The auditors became extremely risk averse in the this process--which should not have surprised anyone. The expenses then turned out to be much greater than forecast by the SEC or expected by Congress. The burden is disproportionately heavy on smaller companies. This problem was recognized by the Dodd-Frank Act of 2010, of which Section 989G permanently exempted companies with a market capitalization held by non-affiliates of less than $75 million from the requirements of Section 404(b) � making one deregulatory correction in the midst of a vast expansion of regulation.

Congressman Ben Quayle and several co-sponsors introduced a bill on September 15, 2011, the "Startup Expansion and Investment Act," HR 2941, with the goal of further reducing the regulatory burden of Sarbanes-Oxley, and making conversion to a U.S. public company more attractive. This short bill would make optional the adoption of Section 404 (a)(2) and (b) for companies with a market capitalization of less than $1 billion, which have been public for less than ten years. Thus, such companies could decide to adopt these Sarbanes-Oxley procedures and external accountant's attestation, or to opt out of them. A decision to opt out would be required to be reported to investors in the next SEC filings.

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Sanctions, Transnational Organized Crime

3 Oct 2011 20:12:14 GMT

By Adam R. Pearlman

On July 24, 2011, President Obama signed Executive Order 13581, “Blocking Property of Transnational Criminal Organizations.� In the Order, the President found that “the activities of significant transnational criminal organizations [TCOs] . . . have reached such a scope and gravity that they threaten the stability of international political and economic systems.� Those organizations, defined in the order as persons or groups that engage in “an ongoing pattern of serious criminal activity involving the jurisdictions of at least two foreign states; and that threatens the national security, foreign policy, or economy of the United States,� are determined to “constitute an unusual and extraordinary threat to the national security, foreign policy and economy of the United States,� making them subject to sanctions under the International Economic Emergency Powers Act (IEEPA).

IEEPA authorizes the President to declare a national emergency and regulate or seize “any property in which any foreign country or a national thereof has any interest� to counter “any unusual or extraordinary threat, which has its source in whole or substantial part outside the United States, to the national security, foreign policy, or economy of the United States.�[1] Passed in 1977, IEEPA powers have previously been invoked via Executive Order by President Carter to block Iranian assets during the hostage crisis there in 1979, by President Regan to block trade and travel with Libya in 1986, and President Clinton to block transactions to Middle East terrorists and the Taliban. President George W. Bush also invoked IEEPA shortly after the terrorist attacks of September 11, 2001, when he promulgated Executive Order 13224, “Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism.�

The present Order purports to provide the U.S. government with “new tools to break the economic power of transnational organized crime and protect financial markets.� It blocks all property in the United States and interests in such property of designated groups, and prohibits making any contributions to, or receiving any contributions from such groups. The Executive Order calls upon the Secretary of the Treasury to determine what persons, groups, and supporters of those persons and groups are subject to the sanctions laid out in the Order, similarly to how the Secretary of State may designate Foreign Terrorist Organizations (FTOs) under the Anti-Terrorism and Effective Death Penalty Act of 1996 (AEDPA). The Order itself designates four such groups: the Brothers� Circle in Eastern Europe and Asia, the Camorra in Italy, the Yakuza of Japan, and the Los Zetas drug cartel in Mexico. Los Zetas had already been designated as a sanctionable foreign narcotics trafficker by the Secretary of the Treasury under the Foreign Narcotics Kingpin Designation Act of 1999. Because of the parallels between FTO and TCO designations, and because IEEPA violations are criminally enforceable felonies, this EO has been compared to criminal statutes governing material support to terrorism, governed by laws such as sections 2339A, 2339B, and 2339C of Title 18 of the United States Code.

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Federal Agencies Propose Rules on Incentive-Based Compensation at Financial Institutions

9 Aug 2011 20:10:35 GMT

By Matthew Furman

Section 956 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank�) requires seven federal agencies, including the FDIC and the SEC, to jointly adopt rules regulating incentive-based compensation arrangements at “covered financial institutions� that are excessive or that could lead to material financial loss.

On April 14, 2011, these agencies published a proposed rule implementing Section 956 of Dodd-Frank, kicking off a 45-day comment period that expired on May 31, 2011. The regulators are now in the process of jointly reviewing the comments submitted. They are expected to make the terms of the proposed rule, if adopted, effective six months from publication of the final rule in the Federal Register. Given the current timeframe, the final rule may become effective in the first quarter of 2012.

In general, the proposed rule:

Prohibits “covered financial institutions� (generally, regulated entities with consolidated assets of $1 billion or more) from maintaining incentive-based compensation arrangements that:
- encourage “inappropriate risks� that could lead to “material financial loss� at such institution, or
- encourage “inappropriate risks� by providing “excessive compensation.�

It is important to note that “incentive-based compensation� is defined broadly to include any variable compensation that serves as an incentive for performance.

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Executive Order 13502: Use of Project Labor Agreements for Federal Construction Projects

22 Jul 2011 16:06:15 GMT

By William Messenger

On February 6, 2009, President Obama issued Executive Order 13502, Use of Project Labor Agreements for Federal Construction Projects (“EO 13502�). The Executive Order encourages federal agencies to use union-only project labor agreements (“PLAs�) on construction projects, the cost of which exceeds $25 million. On April 13, 2010, the Federal Acquisition Regulations were amended to implement EO 13502. (Federal Acquisition Regulation; FAR Case 2009�005, Use of Project Labor Agreements for Federal Construction Projects, Fed. Reg. 19168 (13 Apr. 2010) (codified at 48 C.F.R. §§ 2,7,17,22,52)).

A PLA is a union collective bargaining agreement that all contractors must sign to work on a construction project. PLAs generally require that contractors recognize the union as exclusive bargaining representative of all employees who work on the project; contribute to union pension and healthcare funds; operate under union work rules; follow union procedures for hiring, firing, and disciplining employees; and, in non-Right to Work states, require all employees to pay union dues as a condition of employment. A PLA is a species of a union “pre-hire� agreement, as it is entered into without any indication that the affected employees support unionization.

The use of PLAs is controversial in both the private and public sectors. Proponents usually claim that PLAs ensure timely completion of construction projects by reducing labor strife. Opponents contend that these agreements increase construction costs by excluding from the competitive bidding process all contractors who wish to operate nonunion. In the public sector, PLAs are also criticized as being imposed due to union political influence instead of pecuniary benefits.

With Executive Order 13202, President George W. Bush banned federal agencies from imposing PLAs on federal construction projects during his administration. Shortly after coming into office, President Obama reversed this ban with EO 13502, opting to encourage the use of PLAs on federal construction projects.

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An Analysis of the National Defense Authorization Bill

21 Jun 2011 22:26:01 GMT

By Benjamin Wittes

This article describes the detention and Authorization for Use of Military Force (AUMF) provisions in the National Defense Authorization bill, which was passed by the House of Representatives by a 322-96 vote on May 26, how these provisions are different from the provisions in earlier versions of the bill, and where they are likely to generate opposition. House Armed Services Committee Chairman Buck McKeon introduced the bill in early March and provided updated language for the detention and AUMF sections on May 9. For organizational simplicity, I describe the bill in the order in which its sections appear and compare these sections to the analogous ones in the earlier version.

Section 1033 clarifies the ability of a defendant in a military commission to plead guilty in a capital case�a matter that is now legally ambiguous. This provision has not and likely will not engender much controversy.

Section 1034 is an attempt to update the AUMF and to include in it the specific power to detain. It reads in its entirety:

Congress affirms that�

(1) the United States is engaged in an armed conflict with al-Qaeda, the Taliban, and associated forces and that those entities continue to pose a threat to the United States and its citizens, both domestically and abroad;

(2) the President has the authority to use all necessary and appropriate force during the current armed conflict with al-Qaeda, the Taliban, and associated forces pursuant to the Authorization for Use of Military Force (Public Law 107�40; 50 U.S.C. 15 1541 note);

(3) the current armed conflict includes nations, organization, and persons who�

(A) are part of, or are substantially supporting, al-Qaeda, the Taliban, or associated forces that are engaged in hostilities against the United States or its coalition partners; or

(B) have engaged in hostilities or have directly supported hostilities in aid of a nation, organization, or person described in subparagraph (A); and

(4) the President�s authority pursuant to the Authorization for Use of Military Force (Public Law 3 107�40; 50 U.S.C. 1541 note) includes the authority to detain belligerents, including persons described in paragraph (3), until the termination of hostilities.

The current language is largely the same, though with some differences, as the earlier version McKeon introduced, and it would have the same impact. It would put Congress explicitly behind the power to detain the enemy for the first time, and it would serve as an updating of the AUMF, whose focus was mainly restricted to the perpetrators of the September 11 attacks.

This provision has already come under fire from some who argue that it is an expansion of the war just as Bin Laden has been killed. On the other hand, the House Armed Services Committee expressed an intent to follow the Obama administration�s interpretation of the AUMF as pertains to the scope of the conflict and the scope of detention authority in the conflict when it wrote the following language in its report accompanying McKeon�s mark:

The committee supports the Executive Branch�s interpretation of the Authorization for Use of Military Force, as it was described in a March 13, 2009, filing before the U.S. District Court for the District of Columbia. While this affirmation is not intended to limit or alter the President�s existing authority pursuant to the Authorization for Use of Military Force, the Executive Branch�s March 13, 2009, interpretation remains consistent with the authorities provided by Congress.

H.R. 1540�FY12 National Defense Authorization Bill, Chairman�s Mark 18 (2011), available at http://armedservices.house.gov/index.cfm/files/serve?File_id=61e9d0d1-581b-4204-ba0e-f601878bc710.

The source of the argument that the bill expands the scope of the war lies in the language of paragraphs (3) and (4). Paragraph (3) says that the current conflict “includes nations, organization, and persons� who are “part of, or substantially supporting,� the enemy�thus arguably seeming to suggest that Congress has authorized the use of “all necessary and appropriate force� against mere supporters of our enemies. Interpreted this way, the language would arguably go beyond the administration�s understanding the current AUMF in a couple of ways. First, it would authorize force against nations who might give non-trivial support to, for example, the Taliban�thus authorizing force against, say, Iran. Second, it would authorize force against groups and individuals for independent support of the enemy. While the administration has reserved the right to detain such people, it might not generally claim the authority to target mere supporters�even substantial supporters. Paragraph (4) arguably compounds this problem by labeling the people described in paragraph (3), including supporters, as “belligerents��a word that strongly implies that they are legitimate targets.

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The NLRB vs. Boeing: Can Unionized Employers Expand into Right to Work States?

26 May 2011 19:12:07 GMT

By Glenn M. Taubman

On April 20, 2011, the National Labor Relations Board�s Acting General Counsel issued a complaint against the Boeing Company, alleging that the company�s decision to assemble large commercial aircraft (787 Dreamliners) at a new final assembly plant in South Carolina violated the National Labor Relations Act. [Complaint] The complaint alleges that Boeing illegally “transferred� work from its unionized assembly plant in Seattle, Washington to this new South Carolina facility.

According to the complaint, Boeing�s decision to assemble additional 787s at its newly acquired South Carolina facility, rather than in an existing unionized facility in Seattle, was made in retaliation for the Seattle-based employees� prior strikes.The complaint cites news articles and statements to the press Boeing officials reportedly made to unlawfully discourage future strikes and discriminate because of employees� protected union activity.The complaint seeks an order requiring Boeing to cease production of the 787s in South Carolina and instead produce them in Seattle.

In an unusual development, the Acting General Counsel issued two press releases and a “fact sheet� explaining his actions. [Press Release 1] [Press Release 2] [Fact Sheet]

Boeing has forcefully denied the complaint�s allegations. [Boeing Answer 1] [Boeing Answer 2]

According to Boeing, no work has been transferred from Washington to South Carolina; no employee in Washington has lost any employment opportunities; the aircraft assembly work in Washington has continued to expand due to increased customer demand, even as the South Carolina plant opens; and the decision to open a new facility in South Carolina was made for legitimate economic and business reasons.

Boeing argues that legitimate business reasons may lawfully include a desire to diversify production away from facilities that are prone to strikes and other forms of economic pressure by unionized employees.Moreover, Boeing asserts that its contract with the machinists union allows it to open new facilities elsewhere, and that the company negotiated in good faith with the union before it decided to create this new facility, but was unable to reach a no-strike agreement with the union in Washington.Finally, Boeing asserts that the remedy sought in the complaint � a court order to transfer the assembly work to Seattle from South Carolina � is impermissibly punitive and would cause an undue hardship on Boeing, its employees, and the State of South Carolina.

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NRC Delays Judicial Review of the Yucca Project Termination

8 Mar 2011 21:36:26 GMT

By C.J. Milmoe

From its inception, the nuclear power industry has been hounded by its critics, who ask, "What will be done with the spent nuclear fuel?", and its would-be friends, who say, "I'd like to see more reactors, but first we have to solve the spent nuclear fuel problem."

Nuclear fuel goes into reactors as uranium pellets contained in tubes that are bundled into fuel assemblies. After four to six years in the reactor the fuel is "spent." The spent nuclear fuel (SNF) is removed from the reactor and stored on-site for a cool-down period of at least ten years. After the cooling-off period, the SNF can be shipped off-site for recycling (the "closed cycle" approach) or burial (the "open cycle" approach).

SNF is a mix of uranium and radioactive materials formed in the reactor. It is a radiation hazard and remains so for a very long time. Currently, fifty-years' worth of commercial SNF, 57,000 metric tons, is being stored at 131 locations in thirty-nine states. The volume is not large. It would cover an area the size of a football field to a depth of less than ten yards.[i]

The Nuclear Waste Policy Act

The closed and open cycle solutions each have technical advantages and disadvantages, and different countries have chosen one or the other for policy reasons. Initially, in the United States, the industry took the closed cycle approach, with private sector facilities performing the recycling. This lasted until 1982, when Congress passed the Nuclear Waste Policy Act (NWPA).[ii] The NWPA is the solution to the SNF "problem" in the United States. It mandates the open cycle approach managed by the U.S. Department of Energy (DOE) with burial of the SNF in a geologic repository at remote Yucca Mountain, Nevada.[iii] The NWPA requires DOE to:

Conduct a characterization study of the mandated Yucca site,[iv]
Recommend, after public hearings and notice to the State of Nevada, presidential approval of the Yucca site,[v] and
Submit an application for authorization to construct the repository from the Nuclear Regulatory Commission (NRC).[vi]

Based on a comprehensive evaluation by DOE and the recommendations of the Secretary and the President, Congress in 2002 approved, and the President signed, a Joint Resolution approving "the site at Yucca Mountain, Nevada, for a repository."[vii] DOE submitted the Yucca Project application to the NRC on June 3, 2008.[viii] At that point, the matter was in the hands of the NRC. The NWPA requires the NRC to:

Consider an application for a construction . . . of a repository in accordance with the laws applicable to such applications, except that the Commission shall issue a final decision approving or disapproving the issuance of a construction authorization not later than the expiration of 3 years after the date of the submission. . . .[ix]

Funding for the Yucca project is by congressional appropriation from the Nuclear Waste Fund, established by the NWPA,[x] with revenue from a one mil per kilowatt-hour fee charged on nuclear generation. The Nuclear Waste Fund has collected $35.4 billion in fees plus interest since 1983. About $10.8 billion has been spent on the Yucca Project. The fees are considered fuel costs and passed on to utility ratepayers.

DOE completed all the procedures necessary to file the application for the NRC and submitted it in June 2008 despite the persistent opposition of Senate Majority Leader Harry Reid. Senator Reid states:

Since 1995 he defeated "numerous" attempts to bring nuclear waste to the Nevada Test Site for temporary storage and used his position in the democratic leadership to stop eight pro-Yucca bills and ten pro-Yucca amendments;
From 2001 to 2009, he cut over $1 billion from Yucca Mountain Budget Requests and stripped $27 million from the FY2010 budget for the NRC;
He convinced then-presidential candidate Obama to promise to oppose the Yucca Project; and
He persuaded President Obama to promise to eliminate all funding of the project in his FY2011 budget.[xi]

In early 2010, the NRC was on track to complete staff reviews and publish its preliminary environmental and safety findings by November 2010.

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Will the Obama Administration Re-Interpret Federal Law Re: Religious Discrimination When Awarding Federal Grants?

11 Feb 2011 19:17:52 GMT

By Derek L. Gaubatz

INTRODUCTION

Many religious organizations, as a sincere exercise of their religious faith, engage in religious preferences when hiring those who serve in their organizations. Such religious preferences are designed to ensure that a religious organization has in place personnel who affirm and practice the religious beliefs of that organization. Such religious preferences also maintain the religious autonomy of that organization by preventing situations in which that organization is compelled to hire those who do not share the core beliefs of that organization (e.g., a Jewish charity doesn't have to hire Christians or Muslims).

The Obama Department of Justice (DOJ) is currently debating whether to re-interpret federal law so as to allow discrimination, when awarding federal grants, against faith-based organizations who engage in such religious hiring preferences. The outcome of this debate will affect the ability of faith-based providers who engage in religious hiring preferences to compete with secular and other faith-based organizations for federal social service grants.

BACKGROUND

The background to this debate arises out of two competing values in federal law.

On the one hand, there is the principle of non-discrimination. Embedded in the authorizing legislation and/or regulations for numerous federal grant programs (e.g., disaster response, poverty relief, education, rehabilitation, etc.) are generally applicable rules prohibiting organizations that receive federal grants from discriminating in its hiring practices, including religious discrimination. This generally applicable rule against religious discrimination poses little trouble for secular social service providers. However, it does pose a significant issue for many religious organizations that, as an exercise of their faith, engage in religious hiring preferences. The generally applicable ban on religious discrimination in hiring would disqualify such religious organizations from receiving any federal grants.

On the other hand, there is the desire to protect religious exercise against government imposed burdens on religious exercise. This protection of religious exercise, at least with regard to the action of the federal government, is most expansively set forth in the Religious Freedom Restoration Act of 1993 (RFRA). RFRA prohibits the federal government from imposing a "substantial burden" on the religious exercise of any individual or entity unless the government can prove that imposition of that substantial burden passes the strict scrutiny test, i.e., that it is the least restrictive means of achieving a compelling government interest.

In June 2007, the Department of Justice's Office of Legal Counsel (OLC) issued an opinion to provide guidance to all federal agencies on how to resolve these two competing values in federal law. At issue was the eligibility of World Vision, an explicitly Christian aid organization that employs religious preferences in hiring its personnel, to receive a grant pursuant to the Juvenile Justice and Delinquency Prevention Act. That act prohibited grant recipients from engaging in religious discrimination in their employment practices. In a 25 page opinion, the OLC concluded that the protections of religious exercise set forth in RFRA are reasonably construed to apply to religious organizations that seek federal grants. The opinion concludes that because requiring a religious organization to abandon its religious practices in order to receive a grant is a substantial burden on religious exercise, the government may not force a religious organization to abide by the non-discrimination rules as a condition of receiving a grant.

In light of the OLC opinion and RFRA's commands, DOJ's Office of Justice Programs then issued guidance stating that a faith-based organization (FBO) may receive federal funds and be exempt on a case-by-case basis under RFRA from the non-discrimination rules.[i] To be exempt, an FBO must certify to the following, and there must be no reason to question its truthfulness:

The FBO will offer all federally-funded services to all qualified beneficiaries without regard for the religious or non-religious beliefs of those individuals; and
Any activities of the FBO that contain inherently religious content will be kept separate in time or location from any services supported by direct federal funding, and if provided under such conditions, will be offered only on a voluntary basis; and
The FBO is a religious organization that sincerely believes that providing the services in question is an expression of its religious beliefs; that employing individuals of particular religious belief is important to its religious exercise; and that having to abandon its religious hiring practice to receive federal funding would substantially burden its religious exercise.

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The Regulations from the Executive In Need of Scrutiny (REINS) Act

14 Jan 2011 19:16:48 GMT

By Jonathan H. Adler

Last year, the REINS Act was introduced in the U.S. Senate and House of Representatives (as H.R. 3765 and S. 3826, respectively) to prevent federal agencies from implementing major regulatory initiatives without Congressional approval. Equivalent legislation is virtually certain to be considered in the 112^th Congress. As part of their "plan to rein in the red tape factory in Washington, DC" in the "Pledge to America," Republican congressional candidates promised to "require congressional approval of any new federal regulation that has an annual cost to our economy of $100 million or more."[1] The purpose of this requirement is to ensure that significant regulatory initiatives are approved by both Congress and the Executive Branch. As explained in the "Pledge": "If a regulation is so �significant' and costly that it may harm job creation, Congress should vote on it first." [2]

The central provision of the REINS Act provides that new major rules cannot take effect unless Congress passes a Joint Resolution approving the regulation within 90 session or legislative days of the rule's submission to Congress.[3] "Major rules" are defined as those regulations that are anticipated by the White House Office of Management and Budget to impose annual economic costs in excess of $100 million or otherwise have significant economic or anticompetitive effects.[4] The Act further sets up an expedited procedure to ensure prompt consideration of resolutions of approval. In effect, the REINS Act amends pre-existing regulatory statutes to remove federal agency authority to unilaterally adopt regulatory measures, instead requiring agencies to forward "final" rules as proposals for congressional review.

This proposal is a response to concerns that federal regulatory agencies are imposing substantial costs on the American economy without sufficient Congressional oversight or political accountability. Federal agencies routinely issue thousands of regulations every year. In 2009, for instance, federal agencies issued over 3,503 final rules.[5] REINS Act supporters note that many federal regulations are promulgated pursuant to statutes that were passed years, if not decades, ago. Key portions of the federal Clean Air Act, for example, were enacted in 1970 and have not been amended since 1990. These provisions remain the source of substantial regulatory authority, including regulations recently adopted by the Environmental Protection Agency to control emissions of greenhouse gases. These regulations were promulgated to address the threat posed by global warming. According to the EPA, it is obligated to adopt these regulations even though Congress was not focused on global warming when the relevant provisions of the Clean Air Act were adopted over twenty years ago. Under the REINS Act, economy-wide regulatory measures of this sort could only be adopted with subsequent Congressional assent.

In 1996, Congress enacted the Congressional Review Act, creating an expedited process for consideration of joint resolutions to overturn regulations of which Congress disapproved. To be effective, such resolutions must be passed by both Houses and presented to the President for signature. In effect, the CRA created a framework for Congress to enact new laws to overturn or correct administrative implementation of previously enacted laws. This process has only been used once, however, and is not widely considered to have increased Congressional accountability for regulatory initiatives. The REINS Act takes the idea of the CRA one step further by requiring affirmative legislative action for new major rules.

Congress previously attempted to control administrative agency decision-making through the adoption of legislative veto provisions. Between the 1930s and 1980s, Congress enacted legislative veto provisions into nearly 300 statutes. These provisions enabled Congress to delegate broad legislative-like authority to administrative agencies while retaining the unilateral authority to overturn administrative decisions through legislative action, but without Presidential assent or a super-majority vote.

A typical legislative veto provision was contained in the Immigration and Nationality Act, which authorized either House of Congress to invalidate a decision by the Attorney General to allow an otherwise deportable alien to remain in the United States with a simple resolution passed by majority vote. The Supreme Court invalidated such unicameral legislative vetoes in INS v. Chadha on the grounds that a single House of Congress could not overturn an administrative action.[6] Under Article I of the Constitution, legislative action of this type requires bicameralism and presentment - the concurrence of both Houses of Congress and presentation before the President for his signature or veto, the latter of which could be overturned by super-majorities in both legislative chambers.

As then-judge Stephen Breyer explained in a 1984 lecture, a congressional authorization requirement could replicate the function of the legislative veto invalidated in Chadha without the veto's constitutional infirmity.[7] By observing the formal requirements for legislation in Article I, he asserted, congressional oversight of agency activity could be maintained without violating constitutional principles of separation of powers. In addition, unlike the legislative veto, requiring Congressional approval for the adoption of new regulatory initiatives "imposes on Congress a degree of visible responsibility" for new regulatory initiatives.[8]

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The Use of Drones and Targeted Killing in Counterterrorism

13 Dec 2010 19:51:00 GMT

By Michael W. Lewis, Vincent J. Vitkowsky

Shortly after September 11, 2001, President George W. Bush, as Commander in Chief, authorized unmanned aerial vehicles (UAVs), or drones, to target and kill enemy leaders pursuant to Congress' Authorization for Use of Military Force (AUMF) against al Qaeda.[i] The President designated "Afghanistan and the airspace above" a combat zone,[ii] but the United States also launched drone strikes against al Qaeda targets in other countries. The drone program received widespread attention in November 2002, when the C.I.A. launched a Predator drone strike in Yemen, killing the mastermind of the October 2000 attack on the U.S.S. Cole and six other men. Following the Yemen attack, the United Nations Special Rapporteur on Extrajudicial, Summary or Arbitrary Executions asserted that the attack was "a clear case of extrajudicial killing."[iii] In response, the U.S. defended the drone strike as permissible under international law of armed conflict, broadly asserting that al Qaeda terrorists who continue to plot attacks may, in appropriate circumstances, be lawful subjects of armed attack without regard to their location.[iv]

Since taking office, President Obama has expanded the previous administration's use of drones to target al Qaeda and Taliban leaders. Central Intelligence Agency Director Leon Panetta has called the Predator program "the only game in town" in terms of disrupting the al Qaeda leadership.[v] Many have urged the Obama administration to articulate legal justification for the continued use of drones to target and kill terrorists. The administration addressed such concerns on March 25, 2010, when State Department Legal Adviser Harold Koh made a speech to the American Society of International Law (ASIL).[vi]

In his speech, Mr. Koh defended targeted drone killings: "[I]t is the considered view of this Administration . . . that U.S. targeting practices, including lethal operations conducted with the use of unmanned aerial vehicles, comply with all applicable law, including the laws of war."[vii] Mr. Koh cites both domestic law, under the AUMF,[viii] and international law as proof that the U.S. is engaged in armed conflict with al Qaeda, the Taliban, and "associated forces."[ix] Targeted killings, a vital tool in this war, are justified because they are performed in accordance with the laws of war. The U.S., according to Mr. Koh, conducts targeted strikes consistent with the principles of "distinction" and "proportionality" to ensure that the targets are legitimate and collateral damage minimized.[x]

Mr. Koh lists four reasons why targeted drone killings are legal. First, enemy leaders are legitimate targets because they are belligerent members of an enemy group in a war with the U.S.[xi] Second, drones are appropriate instruments for such missions, so long as their use conforms to the laws of war.[xii] Third, enemy targets selected through "robust" procedures require no legal process and are not "unlawful extrajudicial" killings.[xiii] Finally, Mr. Koh argues that using drones to target "high level belligerent leaders" does not violate domestic law banning assassinations.[xiv]

The administration's arguments raise four important questions about the administration's targeted killings policy. Who may be targeted? Where may the targeting take place? Does the use of UAVs for targeted killings comport with International Humanitarian Law (IHL)? And finally, are targeted killings illegal assassinations under U.S. domestic law?

Regarding the question of who may be targeted, IHL divides people into two groups: combatants and civilians.[xv] In order to qualify as a combatant, an individual must belong to a group that has an internal disciplinary system which, inter alia, shall enforce compliance with the rules of international law applicable in armed conflict.[xvi] Those that are not combatants are civilians, and these civilians may only be targeted when they are "directly participating in hostilities."[xvii] In his speech, Mr. Koh argued that "individuals who are part of such an armed group [as al Qaeda] are belligerents and, therefore, lawful targets under international law."[xviii] Critics of the policy, on the other hand, argue that international law must be interpreted more narrowly to exclude the targeted killing of non-combatants when they do not present an immediate threat to others.[xix]

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Criminal Provisions in the Dodd-Frank Wall Street Reform & Consumer Protection Act

10 Dec 2010 21:50:09 GMT

By Tiffany M. Joslyn

The Dodd-Frank Wall Street Reform & Consumer Protection Act of 2009[1] is 848 single-spaced pages in length and contains over two dozen criminal offenses. While some of these offenses are based on existing federal criminal law and simply extend criminal liability to additional types of financial instruments or actors dealing in those instruments, many of these offenses expand the breadth and reach of federal criminal law to criminalize conduct for the first time. Despite the criminal provisions, neither the base text for the final legislation, nor the Act itself, was referred to either chamber's Judiciary Committee.

What follows below is a good-faith attempt to identify the criminal offenses[2] and provide basic explanation of the conduct criminalized by each offense:

Disclosures: Section 202(a)(1)(C)[3] criminalizes reckless disclosures of a "systemic risk determination" by the Secretary of the Treasury under section 203(b),[4] a petition of the Secretary for an "orderly liquidation," or the pendency of court proceedings related to such a petition. This offense is not limited in application to a set of individuals who are on notice, or likely to be on notice, of the prohibition. Other comparable disclosure provisions in the federal code have different mens rea requirements, are limited to a class of defendants, or have civil penalties.[5]
Clearing and Indexing of Swap Transactions: Section 723(a)(2)[6] makes it a criminal offense for any person, other than an eligible contract participant, to enter into a swap unless the swap is entered into on, or subject to the rules of, a board of trade properly designated as a contract market. This offense will be enforced under 7 U.S.C. § 13(a)(5), which makes any willful violation criminally punishable, but prevents imposition of a custodial prison sentence if the defendant "proves that he had no knowledge of such rule or regulation."
Swap Registration and Segregation Requirements: Section 724(a)[7] criminalizes the acceptance of money, securities, or property, or the extension of credit, from, for, or on behalf of a customer to margin, guarantee, or secure a swap cleared by or through a derivatives clearing organization, by individuals who are not registered as futures commission merchants with the Securities and Exchange Commission.[8] Section 724(a) also criminalizes failure to segregate money, securities, or property of swap customers.[9] This offense will also be enforced under 7 U.S.C. § 13(a)(5), as explained above.
Registration Requirement for Swap Data Repositories: Section 728 makes it a criminal offense for any person, unless registered with the Commission, directly or indirectly to make use of the mails or any instrumentality of interstate commerce to perform the functions of a swap data repository.[10] This offense will also be enforced under 7 U.S.C. § 13(a)(5), as explained above. As compared to the registration requirements in Sections 723 and 724 of this Act, which prohibit specific defined actions by unregistered persons, this offense criminalizes a broader range of conduct without providing similar specificity.
Reporting Requirement for Large Swap Traders: Section 730[11] criminalizes the failure to report swap transactions that the Commission finds to perform a significant price discovery function, with respect to registered entities, if the person directly or indirectly enters into the swap in any one day in an amount equal to or in excess of a pre-designated amount (to be determined by the Commission), and the person directly or indirectly obtains a position in the swap in an amount equal to or in excess of an amount to be designated by the Commission. The offense provides an exception to criminal punishment where the individual files certain reports, to be determined by Commission rules and regulations, with the Commission, and maintains necessary records. This offense will also be enforced under 7 U.S.C. § 13(a)(5), as explained above.
Registration Requirement for Swap Dealers and Major Swap Participants: Section 731[12] criminalizes acting as a swap dealer or major swap participant unless registered as such with the Commission. This offense will also be enforced under 7 U.S.C. § 13(a)(5), as explained above.
Registration Requirement for Swap Execution Facilities: Section 733[13] criminalizes the operation of a facility for the trading or processing of swaps unless the facility is registered as a swap execution facility or an appropriately designated contract market. This offense will also be enforced under 7 U.S.C. § 13(a)(5), as explained above.
Fraud and False Statements: Section 741[14] makes it a criminal offense for any person, directly or indirectly, by the use of the mails or any means or instrumentality of interstate commerce, to commit certain fraudulent or deceitful acts, including the making of an untrue statement of a material fact or the omission of a material fact necessary to make the statements made not misleading, in connection with certain orders for commodity futures or swaps. This offense will also be enforced under 7 U.S.C. § 13(a)(5), as explained above.
Insider Trading: Section 746[15] broadens the criminal insider trading prohibition already in the federal code. First, it expands the application of the insider trading prohibition to any employees or agents of the federal government and any individual who uses information imparted by such employees or agents. Second, it broadens the definition of insider information to include "information that may affect or tend to affect the price of any commodity in interstate commerce, or for future delivery, or any swap, and which information has not been disseminated by the department or agency of the Federal Government holding or creating the information in a manner which makes it generally available to the trading public . . . ." Third, it creates a "Theft of Nonpublic Information" offense, which makes it criminal to "steal, convert, or misappropriate" nonpublic information "where such person knows, or acts in reckless disregard of the fact, that such information" is nonpublic. This offense will also be enforced under 7 U.S.C. § 13(a)(5), as explained above.

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The Federal Government Responds to Arizona�s Enforcement of Federal Immigration Law

5 Oct 2010 19:22:44 GMT

By Margaret D. Stock

In recent years, as immigration has become a seemingly intractable political issue in the United States Congress, state and local legislatures have shown increasing interest in passing immigration legislation of their own. State and local enforcement of American immigration laws is thought to be helpful to federal authorities that lack the resources to enforce U.S. immigration laws fully by themselves. The Federal Government has traditionally sought assistance from states in enforcing immigration laws where states do so voluntarily and subject to federal direction and control, but some believe that federal programs that allow state participation in immigration enforcement do not go far enough. In 2010, Arizona's Senate Bill 1070 became the most widely publicized attempt by a State to expand its involvement in enforcement of federal immigration laws. SB 1070 makes certain violations of federal law into Arizona state crimes, thereby allowing unauthorized immigrants who enter Arizona to be charged with state crimes and prosecuted by the State of Arizona as well as the Federal Government. At the urging of the U.S. Department of Justice, however, a United States District Court judge partially enjoined enforcement of SB 1070 in July 2010, and the preliminary injunction remains in place at this writing. Arizona has appealed the court's decision, but the issue of how far States may go in regulating immigration is expected to remain unresolved for several more years.

Abortion and Military Facilities: The Effect of the Burris Amendment in the Department of Defense Authorization Bill

18 Sep 2010 06:15:04 GMT

The U.S. Senate version of the Department of Defense (DOD) authorization bill for FY2011 contains a provision that would change the law regarding abortion in military facilities. Under current law, abortions may not be performed by DOD medical personnel or in Department of Defense medical facilities except when the life of the mother is at risk, or when the pregnancy is the result of rape or incest. A woman is permitted to leave the base and make her own private arrangement for an elective abortion. The "Burris Amendment," added to the DOD authorization bill by the Senate Armed Services Committee, would strike from the law the prohibition on use of military facilities for elective abortions. The amendment does not change a separate provision of the law that prohibits the use of DOD funds for abortion.

Federal Cybersecurity Programs

12 Aug 2010 20:40:36 GMT

On March 2, 2010, the White House declassified a summary of the Comprehensive National Cybersecurity Initiative (CNCI). Initially promulgated by President Bush in January 2008 in National Security Presidential Directive-54/Homeland Security Presidential Directive-23 (NSPD-54/HSPD-23), CNCI lays the groundwork for overhauling, uniting, and coordinating efforts to protect our nation's cyber infrastructure. The declassified summary briefly lays out a series of twelve initiatives that bring together the resources of federal law enforcement, intelligence, and defense communities, as well as state and local authorities and private-sector players, to fulfill three goals that serve to protect national security and economic interests. These goals include: enhancing government-wide situational awareness of present network vulnerabilities; improving counterintelligence capabilities to defend against cyber threats; and coordinating future research and development efforts to deter the constantly-evolving hostile and malicious activities of some cyberspace actors.

Title IX

5 Aug 2010 16:37:35 GMT

"Making Title IX as strong as possible is a no-brainer," Vice President Joe Biden told a cheering crowd at George Washington University this past April. Biden appeared at GWU to announce that schools could no longer demonstrate compliance with Title IX by using the Model Survey, an instrument designed by the Bush Department of Education to help universities assess relative male and female interest in college athletics participation. Like Biden, many critics of the Model Survey see increasing female participation as much as possible as an important moral goal, worth significant costs. But unlike Biden, proponents of the Model Survey hardly see the issue as a "no-brainer." Instead, they are more inclined to emphasize the costs associated with creating new teams for women. Others have also noted that, in order to ensure proportional representation of men and women in athletics, some universities have chosen to eliminate men's teams rather than add more women's teams. This conflict over costs and benefits has animated much of the debate surrounding Title IX, including the sparring over the Model Survey that led to its rescission.