Tuesday, October 07, 2008
Commentary
Disclosure--or the lack of it--is a root cause of the current financial crisis
By Peter Scheer
Economists and historians will be debating for years the causes of the financial crisis that, like a global array of dominoes, now threatens to take down the “real” economies of countries big and small, both “developed” and “emerging,” in a massive flight from investment risk unlike anything experienced since 1929.
To the experts’ lists of causes, let me add a lack of information--specifically, the systemic failure of lenders to disclose ample information about the risks of the mortgage loans being made to thousands of borrowers whose homes have since tanked in value, resulting in unprecedented rates of default. These defaults leave the holders of the affected mortgage investments--primarily banks around the world--with sizeable loan portfolios that they can’t value and for which there is no functioning market.
It is the absence of information that prevents the markets from valuing so-called mortgage-backed securities--a failure which, in a vicious cycle, forces banks to write down the securities’ value on their balance sheets, resulting in huge losses that precipitate a sell-off in the banks’ stock. The fall in the stock price, in turn, causes the banks to stop lending in order to preserve much-needed capital--which leads to, what: A recession? A depression? Whatever, it isn’t pretty.
What information, exactly, did lenders fail to disclose? Not the fact that large numbers of home purchasers were poor credit risks who could barely afford to service their mortgages. That much the market understood, although it was lulled into complacency by reassuring credit ratings, the prospect of refinancing the mortgages as houses appreciated, and by diversification theoretically achieved through the bundling of multiple mortgages.
The market, however, did not know--or did not understand--that families buying homes would, in many cases, have an incentive to default on their mortgage obligations if, contrary to the supposed birthright of all Americans, and particularly those living on the east or west coasts, housing prices stopped rising or actually declined.
For example, in California, ground zero for the national housing bust, homeowners, by state law, have no personal liability for a first mortgage. Lenders’ only security is the home itself. This means that homeowners whose homes decline in value below the amount of their mortgage may simply stop making monthly payments--with no legal responsibility or liability to the lender. Default for these homeowners is the rational choice in a declining housing market, not the dreaded denouement of families attempting unsuccessfully to claw their way to the middle class.
Although one feels sympathy for any family whose house falls into foreclosure, most homeowners in California who bought their homes in 2004 or later are not victims. Many paid no money down on homes which, had the market continued to rise, would have received equity at no risk. They were like characters in a Las Vegas movie who, staked by a rich stranger, are allowed to keep their gambling winnings but are not responsible for losses. Who wouldn’t take that deal everyday?
The irony is that California’s misguided law shielding holders of a first mortgage from personal liability was enacted in the Depression of the 1930s--one is tempted to say the “last” Depression--to protect homeowners, who obviously vote in larger numbers than owners of banks and mortgage companies.
How could this risk not be adequately disclosed? One reason is that investors are so accustomed to sky-is-falling disclosure rhetoric--written by lawyers whose legal boilerplate describes every investment as insanely risky--that they are unable to distinguish between investments posing an average risk from investments posing an extraordinary risk. When every legal disclosure says, in effect, “you have to be crazy to buy this security,” no security seems more or less risky than any other.
Another reason is complexity. Some securities have become so complicated that even sophisticated institutional investors can’t comprehend their relative risks. Investors were introduced to this phenomenon in the 2002 collapse of Enron. In recent years analysts have pointed out that the transactions that sunk Enron were in fact disclosed, although few could understand them--much less evaluate their likely impact on the company’s earnings--because of their incredible complexity.
Financial markets need meaningful and comprehensible information in order to function. The purpose of the recently enacted federal “rescue plan” is to provide a crucial piece of information that panicked markets have been unable to establish--namely, the value of collateralized securities tied to home mortgages--so that buyers and sellers can resume trading them, even at heavily discounted values.
The financial markets are like representative government. Just as democracy requires transparency so that voters can hold elected officials accountable, so the financial system requires transparency so that investors can understand and place a value on the risks associated with certain assets or transactions. In the recent financial bubble, investors preferred ignorance to credible and understandable information. Now that the bubble has popped, let’s hope investors once again insist on meaningful disclosure.
Peter Scheer, a lawyer and journalist, is executive director of CFAC. Want to comment on this column? Send an email to ps@cfac.org
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Friday, October 03, 2008
News
New state law adds protections for anonymous online speech
California Governor Arnold Schwarzenegger has signed a bill that greatly strengthens the right to anonymous speech online. Assembly Bill 2433 raises procedural obstacles to out-of-state companies that subpoena California-based internet service providers for the IDs of anonymous posters. Unless there is a demonstrable basis for the underlying lawsuit, the subpoena will be thrown out and attorney’s fees charged to the out-of-state company.
Corynne McSherry of the Electronic Frontier Foundation (one of the co-sponsors of the bill) explains:
One of the most pernicious threats to anonymity is the filing of trumped-up lawsuits as an excuse to force ISPs to reveal speakers’ identities. Once such a lawsuit is filed, speakers who want to protect their anonymity must find a way to pay a lawyer to go to court and prevent disclosure of their personal information. That can be a real hardship—in fact, even the threat of having to go to court may discourage many people from speaking out in the first place.
Californians have long had an extra layer of protection against these lawsuits. Thanks to California’s anti-SLAPP law (SLAPP stands for Strategic Lawsuits Against Public Participation) they can file a special motion to strike any cause of action based upon their speech or petition activity. The anti-SLAPP law works fine to stop an abusive subpoena if the underlying lawsuit is filed in California. But there’s a loop-hole: An appellate court recently ruled that the anti-SLAPP provisions don’t apply if the underlying lawsuit is filed outside of California. As a result, speakers and companies in California were exposed to frivolous satellite litigation without the shield of deterrence provided by the anti-SLAPP law. AB 2433 closed this loophole by amending California law to provide that individuals whose information is subpoenaed can move to quash the subpoena (i.e, to prevent production of the requested information) and, if they succeed, seek compensation for the costs of going to court.
Copyright EFF 2008
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Wednesday, September 17, 2008
Editorial
LA Times editorial backs CFAC suit against State Bar
The LA Times, in its lead editorial in today’s newspaper, endorsed CFAC’s lawsuit (filed together with UCLA Professor Richard Sander) to force the California State Bar to make available records needed for Sander’s research on affirmative action in law schools. CFAC’s mission is to provide access--subject to strict confidentiality guarantees--to both Sander and to other researchers who disagree with him.-PS
Los Angeles Times:
Affirmative action and the bar exam
A California professor studying affirmative action should have access to law school performance statistics.
September 17, 2008
Americans have been debating the fairness and efficacy of racial preferences in college and graduate school admissions for more than 30 years. Now a UCLA professor is seeking to test his hypothesis that affirmative action programs actually hurt the career prospects of minority law school graduates. But he has been hampered in his research by the indefensible failure of the State Bar of California to provide the statistics he needs.
The professor, Richard H. Sander, has requested data about the performance of white and minority law school graduates on the bar examination, along with information about the schools they attended and their grades. In resisting his request, bar officials cite the need to protect the privacy of test takers and to honor an agreement that test material will remain confidential. At the same time, some defenders of affirmative action have argued against releasing the data because they think Sander’s project could have only one purpose: to discredit the idea of racial preferences.
The privacy and legal arguments strike us as spurious, a view shared by the executive director of the California First Amendment Coalition, which has joined Sander and his colleagues in asking the state Supreme Court to order the release of the information. Sander has promised that no individual student would be identified by the statistics, which would break down performance by law school.
It’s also unfair to accuse Sander of seeking to dismantle racial preferences. True, his hypothesis is that affirmative action students are disserved because they derive less benefit from an elite law school than students who meet the usual admission standards. This is the “mismatch” theory, which suggests that students who are weaker than their classmates will often do better academically—and on the bar exam—if they attend a less-competitive school.
The mismatch theory may be mistaken. But suppose it were found to be valid? That wouldn’t necessarily lead to the abolition of racial preferences. Another result might be the strengthening of mentorship and other programs to help less-well-prepared students achieve at higher levels.
An additional objection to Sander’s project is that good marks on the bar exam don’t guarantee success in the practice of law. Perhaps so. If the exam does a poor job of measuring the credentials of lawyers, it ought to be revised. But that has no bearing on Sander’s request.
In 2003, the U.S. Supreme Court ruled that carefully tailored affirmative action programs didn’t violate the Constitution. California, when it approved Proposition 209 in 1996, exercised its right under that decision to outlaw racial preferences in public educational institutions. The debate over affirmative action continues.
Regardless of what we think of Sander’s hypothesis, he should be given the data he seeks. Defenders of affirmative action should not fear a serious examination of how well it’s working.
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Friday, September 12, 2008
Response
Equal Justice Society Criticizes CFAC Suit against State Bar for records on affirmative action. Group Says Issue is Privacy, not Political Correctness.
CFAC’s lawyer responds.
CFAC’s executive director recently criticized the California State Bar for its refusal to cooperate with a UCLA professor who is seeking bar records for academic research on affirmative action in law school admissions. CFAC has filed suit, together with the UCLA Professor, Richard Sander, to force release of the data for analysis by Sander--and by other academic researchers who dispute his theory that affirmative action may harm its intended beneficiaries. Here is the Equal Justice Society’s response, which is followed by a reply from CFAC’s lawyer:
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Privacy, Not Political Correctness
By Anthony Solana, Jr. and Sara Jackson
Peter Scheer’s Aug. 20 commentary defended a suit by Sander and CFAC against the State Bar to obtain the academic records and exam scores of applicants to the Bar. Sander wants exam takers’ undergraduate and law school GPA, LSAT as well as bar scores – even though individuals who take the bar cannot access these scores themselves.
Scheer claims that the decision of the State Bar to deny access to these records was motivated by “political correctness.” Since the initial request from Sander was tied to his controversial research asserting that affirmative action puts Black law students in institutions where they are doomed to fail, objections to the release of the data are summarily dismissed as reflecting a benighted adherence to liberal orthodoxy.
Obscured by the charges of “political correctness” is the paramount legal issue Sander’s request presents: privacy. The information provided to the Bar by exam applicants cannot be disclosed by the Bar, irrespective of its relevance in a public policy debate, because state and federal law precludes its disclosure absent consent.
When applicants to the bar applied to take the exam, they were asked to provide personal information on the Bar’s promise that it would be used only for specific and limited purposes: to determine whether an applicant met the requirements to sit for the Bar and for the Bar’s own internal studies.
This express limited written consent does not authorize the Bar to give this highly confidential information to anyone without permission. Because the Bar made this promise it is legally and morally bound to keep it.
Federal law protects the privacy of these educational records as well. One’s private records do not become public records, accessible to anyone, simply because a person applies to take a state exam and becomes part of a database.
It is on these legal grounds that many prominent lawyers support the Bar’s protection of bar exam takers data. In a Nov. 7, 2007, letter to the State Bar president and chair of the Bar’s Regulations, Admissions & Discipline Committee, 28 lawyers and leaders of bar organizations, both local and statewide, wrote:
“The State Bar holds the confidential information of Bar applicants in trust. It is not at liberty to divulge these applicants’ confidential information because they have a right to privacy in this information and a right to due process with respect to its disclosure.”
Sander’s research design solves neither the problem of consent nor the problem of privacy. Given the current demographic makeup of many of California’s top law schools, simply removing names and other identifying characteristics does not ensure the confidentiality of all applicants. For example, at UC Berkeley and UCLA Law Schools several classes have had 10 or fewer Black students since the adoption of Proposition 209. Small numbers of Black students in a class are typical of some private law schools as well. Under such circumstances, even “anonymized” data can still render persons easily traceable, and in such cases the law prohibits disclosure of academic records without consent.
As Dean Larry Kramer of Stanford Law School stated in a letter to the State Bar on this issue last year: “[t]he use of these records envisioned by the Sander team would violate FERPA [the Family Education Rights and Privacy Act of 1974].”
At the very least, the foregoing indicates that the disclosure of these educational records presents a serious legal question, not fairly characterized as a matter of “political correctness.”
And to the extent that the issue of political motivation or orthodoxy is invoked, it surely should be considered with respect to all sides. After all, Sander’s research is funded by a $1 million grant from the conservative Scaife Foundation and enjoys the full support of all of the conservatives now in control of the U.S. Civil Rights Commission, including Gail Heriot—one of the authors of Proposition 209. At no point in Scheer’s commentary are these facts mentioned.
Nor does Scheer mention the fact that there have been numerous scholarly criticisms by leading social scientists and legal scholars challenging the methodological integrity of Sander’s work, and raising the question of whether he has proven his claims. The questions raised are particularly important since it is unclear the extent to which any of Sander’s articles on this topic were peer-reviewed and none of them is published in a peer-reviewed journal.
Sander’s unsuccessful effort to obtain National Science Foundation funding for this project also raises questions about its methodological soundness. According to some reviewers (whose evaluations were published on Sander’s website), Sander’s mismatch hypothesis cannot reasonably be tested by analyzing the bar scores of Black and Latino test takers.
Sander’s research conclusions largely remain uncorroborated. According to one researcher, since Sander’s article on the mismatch theory was published almost four years ago, “I have been unable to find a published article or working paper in an academic venue that defends Sander’s work, other than his own.” Sander might well contend that the absence of concurring work is due to the fear of staking out a controversial position. But an equally plausible hypothesis – and one well supported by critiques – is that significant questions exist as to whether he has proven what he claims. Under the guise of being balanced, Scheer’s commentary considers none of this.
That Sander has a right to advocate his position is undeniable. What he does not have is a right to acquire personal and confidential information of bar exam takers when the law mandates otherwise.
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Anthony Solana, Jr., is president and chairperson of For People of Color, Inc. Sara Jackson is the Equal Justice Society Judge Constance Baker Motley Civil Rights Fellow. More information on this issue, visit http://www.equaljusticesociety.org.
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Your Premises are Mistaken, says CFAC lawyer and Board Chairman, James Chadwick.
I respectfully disagree. The premises of the Equal Justice Society’s objections to the litigation are mistaken.
One premise is that the data is being sought to support Prof. Sander’s claims.
That is not true. The records are being sought so that all interested researchers can have access to them, in order to conduct research that the data they contain are uniquely capable of supporting. If the records are made public in response to CFAC’s petition, they will be available to all researchers, including those who disagree with Prof. Sander. Moreover, your premise implies that the data will be manipulated to support Prof. Sander’s hypothesis, regardless of what it actually demonstrates. That is not accurate. The records will be used to evaluate whether there is or is not support for that hypothesis, and the results of that analysis will be made public regardless of what the records show.
Your assertion that state and federal law prohibit the disclosure of these records without individual consent is also incorrect.
As the Equal Justice Society is aware, the requests by Prof. Sander, Mr. Hicks, and CFAC specifically call for the elimination of any information that would directly identify bar examinees. Moreover, they propose the adoption of redaction procedures that will ensure that no individual examinee can be indirectly identified. Thus, for example, disclosure pursuant to the requested procedures would ensure that no combination of characteristics that might conceivably make an examinee indirectly identifiable will ever apply to a group smaller than five. Thus, no individual examinee will be identifiable. Experts in data anonymization have confirmed this.
Although EJS does not identify the basis for its assertion that disclosure would violate state and federal law, we have thoroughly researched and considered the applicable provisions of state and federal law, and it is clear that they do not prohibit disclosure of the records in the manner that CFAC and the other petitioners have requested. The Family Educational Rights and Privacy Act (FERPA) governs the privacy and disclosure of educational records. Under FERPA, anonymized educational records are routinely made public, by education institutions and by the federal government itself. Every case we have found addressing a request such as that made by CFAC held that disclosure was required, and does not violate FERPA. Notably, in its opposition to our petition in the California Supreme Court, the State Bar does not assert that disclosure would violate FERPA. Nor would disclosure of anonymized records violate the California Constitution’s protection for privacy, because California law does not preclude the public disclosure of records from which identifying information has been removed.
To the extent that EJS nonetheless believes that disclosure of the records in the manner requested by CFAC is improper, it should examine and consider the reports and studies that have been publicly disseminated by the State Bar for over thirty years. For example, the State Bar’s reports on each of the semi-annual bar examinations routinely combine indirect identifiers such as law school, race, and bar passage in a way that describes groups of examinees that may be as small as a single individual. The State Bar has determined that the disclosure of this information is not contrary to federal or state law. It cannot coherently assert that its own reports and studies comply with the law, but that disclosure pursuant to the more protective procedures proposed by CFAC in this case would not.
Finally, EJS suggests that the proposition that Prof. Sander’s mismatch hypothesis is “uncorroborated” means that CFAC should not seek records relevant to proving or disproving that hypothesis, and that the Supreme Court should not release such records.
Assuming, for the moment, the validity of the proposition that Prof. Sander’s hypothesis has not been corroborated, I am surprised that EJS would take the position that a state agency should not be required to release records sought to determine whether such a hypothesis can be corroborated. First, where, as here, government records will cast light on an important social and governmental issue, the need to test such hypotheses is among the most compelling reasons for making records public. Second, the logic of this objection is perfectly circular: the hypothesis has not been corroborated, so the records that might corroborate it should not be made public. By that reasoning, disclosure would be appropriate only when it was unnecessary, i.e., if the hypothesis had already been proven.
I encourage EJS to reconsider its opposition to disclosure.
If these records cannot be released in order to provide a basis for research that might support Prof. Sander’s thesis, then they cannot be released in order to support research that might demonstrate, for example, that Proposition 209 has negatively impacted the diversity of the California Bar, that the California bar examination is racially biased, or that law schools are engaging in practices that systematically impair the performance of racial minorities. EJS should carefully consider whether it is content to rely upon the conclusions of the agency charged with administering the bar examination and the bar admissions process that there are no problems with the examination or the admissions process that might contribute to the reduction of diversity in the California Bar.
The objective of the litigation is to provide a sound basis for evaluating issues regarding bar examination performance and admissions--regardless of the hypothesis sought to be tested. Our hope is that sound objective data will provide the foundation for sound objective decisions regarding how best to enhance and ensure the diversity of the California bar. Consistent with CFAC’s mission, we do not believe that suppressing information about public issues that can be provided without compromising personal privacy is consistent with anyone’s interests.
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James Chadwick, an attorney in Palo Alto, represents the petitioners in the suit against the State Bar.
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Commentary
Recent court decisions transform legal tools for protecting free speech into an instrument for the suppression of the public’s speech and access rights
By James Chadwick
Recent decisions by two California Courts of Appeal have turned California’s anti-SLAPP law into a legal Frankenstein’s monster. In doing so, they have turned a law designed to protect the public’s exercise of free speech and petition rights into a tool for government suppression of those rights.
The decisions in Holbrook v. City of Santa Monica and Californians Aware v. Orange Unified School District both arise from the efforts of members of government bodies to challenge practices of the agencies they served. In Holbrook, two members of the Santa Monica City Council challenged the Council’s practice of postponing the public comment period at Council meetings until the end of the meeting, when most members of the public—exhausted by interminable discussions and hearings —had left and gone home.
In Californians Aware, a dissident member of a school board and a public interest group challenged the board’s conduct in censuring the member for publicly opposing an action, taken in a closed session, that he believed should have been taken in public. (In an Orwellian pronouncement, the board censured him for disclosing matters discussed in closed session, even though he did not even attend the closed session.)
In these cases, individual public servants had the courage to assert that the entities they served had violated the First Amendment, California’s open meeting laws, and the California Public Records Act (California’s version of the Freedom of Information Act). The government and the courts soon saw to it that they would regret their temerity.
The government bodies responded to the suits by invoking the anti-SLAPP statute. This law, enacted in the 1990s, was designed to prevent “Strategic Lawsuits Against Public Participation” (or “SLAPPs”). It allows for a court’s early consideration of the merits of cases arising from acts protected by the rights of free speech or petition, and dismissal of cases that are found not to be meritorious. In addition, it provides that attorneys’ fees and costs are to be awarded to any defendant who succeeds in getting claims dismissed. The statute has been a boon to citizens, activists, the press, and others who become involved in matters of public controversy and speak out about them.
However, through a bizarre, alchemical process, the courts considering these cases have transformed the anti-SLAPP statute into a tool for government suppression of the very rights it was intended to protect. Relying on the dubious proposition that government agencies (as opposed to individual government officials) have free speech rights, the courts held that lawsuits seeking to enforce constitutional rights and open government laws can be dismissed under the anti-SLAPP statute.
The courts’ tortured reasoning has produced a monster that bears little resemblance to the noble principles from which it derives. This creature elevates the government’s interest in suppressing dissent over the public interest in free speech and open government. Moreover, its grim aspect looms menacingly over every effort to open government meetings or public records to scrutiny. Doing so may now subject you to having to pay the government’s attorneys. The prospect of litigating against the government to enforce rights of free speech or public access is already sufficiently daunting to deter all but the most determined. This additional deterrent will discourage even those.
The claims in these cases were not completely altruistic. The public servants who brought them clearly had axes to grind, and the courts relied on that fact to discredit their complaints. But that is true of virtually everyone who tangles with public agencies. Without some significant personal motivation, no one would ever risk confronting the superior power and resources of the government.
At the end of Mary Shelly’s novel, Frankenstein’s monster says “Fear not that I shall be the instrument of future mischief,” and disappears into the Arctic waste. If only the same could be said of these decisions. Unfortunately, it appears that only the California Supreme Court or the Legislature has the power to lay these demons to rest.
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James Chadwick is an attorney who serves as President of the Board of the California First Amendment Coalition.
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Thursday, August 28, 2008
CFAC News
Using Trade Agreements As a Tool to Further Rights of Free Speech
By Luke Eric Peterson
Embassy: As the curtain fell on the Beijing Olympic Games, a U.S.-based coalition is striving to keep the spotlight squarely focused on China.
The California First Amendment Coalition (CFAC) is urging the U.S. government to launch a formal complaint against China at the Geneva-based World Trade Organization, alleging that the country’s heavy-handed Internet censorship violates world trading rules.
The CFAC points to blocks placed on popular foreign websites—including Youtube and BBC news—that “are either deemed offensive by Chinese government censors, or are feared by the government as potential platforms for self-expression by Chinese citizens.”
The group adds that screening by Chinese authorities means that the performance of foreign websites is degraded relative to Chinese websites—meaning that foreigners are effectively subjected to discrimination, contrary to world trade laws.
The Financial Times reports that major Internet players like Yahoo and Google are somewhat ambivalent about a full-frontal legal assault on China. To be sure, Google has pushed for the United States to put the topic of Internet censorship on the agenda of future trade negotiations, in an effort to coax the Chinese government into more liberal treatment of news and Internet organizations. But the Financial Times reports that Google and Yahoo are a bit more guarded when it comes to the CFAC’s desire to drag China before a panel of trade arbitrators.
However, the CFAC insists that China’s existing obligations as a WTO member-state provide sufficient legal foothold for the U.S. to mount a challenge to current Chinese practices.
There is a definite novelty to the use of trade and economic agreements to further human rights objectives, such as freedom of expression. When you live in a global village where most of the binding and enforceable international rules are economic ones, it can be tempting for human rights advocates to pick up such tools and see if they can be appropriated for a different purpose.
On rare occasions, they can.
For example, there are scant international protections afforded to charities or development agencies operating in overseas territories. For the most part, such groups find themselves at the mercies of authoritarian governments, or warring factions, with little except moral suasion and the diplomatic support of home-governments to guarantee the safe passage of staff members and the unimpeded operation of relief, development or other charitable activities.
During Zimbabwe’s recent contested election process, all private voluntary organizations and non-governmental organizations were ordered to suspend their field operations after the ruling Zanu-PF party accused them of political meddling. Groups like Oxfam and Care International were forced to idle their relief activities, thus exacerbating the humanitarian crisis in that country.
In countless other contexts, repressive governments have cracked down on foreign NGOs, withdrawing their work authorizations, seizing their offices and equipment, and even terminating the legal status of organizations.
Many governments, particularly in the former Soviet Union, have grown especially suspicious of foreign funding of not-for-profit organizations, fearing that Western governments may be funneling funds through NGOs in order to support political or human rights reforms.
Perhaps most notoriously, the Open Society Institute, a major donor organization created by the financier George Soros, saw its operations in Uzbekistan shut down in 2004. Before its summary exit, the organization had complained that government officials were taking a fine-tooth comb to its operations, thus grinding to a halt many of the institute’s health, education, and legal reform projects.
The recipients of such unwelcome advances can appeal to the local courts, but this can be a perilous exercise, particularly in countries where the judiciary owe their appointments and livelihoods to political masters. Another less-discussed alternative is for victims to turn to international trade and economic agreements—in much the same fashion as the U.S.-based CFAC is seeking to use global trade rules to target Internet censorship.
At least some international treaties that protect trade and economic activities on the global stage may be malleable enough that they protect certain not-for-profit activities as well.
In a research paper prepared with a colleague for the Washington-based International Center for Not-for-Profit Law (ICNL), we found that groups like Oxfam, Care International and the Open Society Institute may be able to challenge at least some forms of repressive treatment by invoking the terms of economic treaties concluded by their host-countries. Many of these treaties are couched in broad terms and may protect certain economic-development activities undertaken by not-for-profit organizations.
Of course, it would be ironic if trade and economic treaties—which come in for routine (and sometimes justified) criticism from many non-governmental organizations—harboured some benefits for those same NGOs.
Without wishing to overstate such benefits, at least some NGOs committed to the cause of freedom of expression or to ministering to the basic needs of others could be pleasantly surprised to discover that the legal ground-rules of economic globalization are not as one-dimensional as sometimes thought.
Luke Eric Peterson is an Embassy columnist and the editor of Investment Arbitration Reporter (http://www.iareporter.com) an electronic news service tracking international lawsuits between multinationals and sovereign governments.
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Wednesday, August 20, 2008
Commentary
CFAC files suit in affirmative action case to defend researcher’s academic freedom and oppose State Bar’s claim that it is above the law of access
By Peter Scheer
Richard Sander, a highly regarded UCLA law professor and statistician, is conducting research with important implications for higher education. To complete the research, which has been the subject of many scholarly articles and intense academic interest, he needs access to a California government database.
So why has the State Bar, which controls the database, denied Sander and his research team access to the records? Because Sander’s subject is affirmative action, the mere mention of which raises blood pressure levels among bureaucrats of all political persuasions. And because Sander’s research breaches a taboo of political correctness: he hypothesizes that affirmative action, at least in top law schools, actually hurts the minority students it is designed to help.
It does this, Sander suggests, by landing minority students--and other students who receive a major preference--in academic settings for which they haven’t been adequately prepared. The resulting “mismatch” between their preparation and the preparation needed to succeed in such schools disadvantages students admitted under affirmative action policies. Sander theorizes these students might have had a better chance of passing the Bar exam--and becoming practicing lawyers--if they had, instead, attended a less selective law school.
Whatever one’s views on the politically divisive issue of affirmative action, there’s no disputing that Sander’s research raises questions of public importance. If the State Bar’s records prove Sander’s suppositions wrong, affirmative action policies can be pursued with greater confidence in their legitimacy. If Sander turns out to be right, no academic institution in the country will be able to avoid a serious reexamination of its use of affirmative action.
You would think that the California State Bar, which promotes diversity in the legal profession and claims to be concerned about low bar pass rates for minority students, would welcome and encourage Sander’s research. After all, his research could provide answers to questions about disparities in bar admissions that have vexed the Bar for years.
The Bar, however, does not want answers. While Sander’s research could lead to policy changes that might enable minority law students to pass the bar in greater numbers, and enter legal practice in greater numbers, the Bar wants only to maintain the status quo and avoid political controversy. For the Bar, ignorance is bliss.
Instead of embracing Sander’s research, the Bar is doing everything it can to shut it down. The Bar says that, unlike other agencies, it doesn’t even have to consider a request for records. It argues that, because the Bar is part of the judiciary, it is exempt from all legal requirements of public access.
This extravagant claim of immunity--tantamount to saying the Bar is above the law--is absurd. Even the judiciary (through the Administrative Office of the Courts) has adopted policies voluntarily imposing on itself access obligations similar to those in the Public Records Act. Moreover, the Bar, like the courts, is subject to Prop 59, which imposes a constitutional right of access independent of state statutes.
The Bar has also argued that Sander’s research would jeopardize Bar applicants’ privacy. But this is just a pretext: Sander’s protocol for obtaining records from the Bar provides anonymity safeguards far more rigorous than the Bar uses for information it already publishes on its website. Under Sander’s procedures, the identities of bar applicants will be unknown and unknowable.
Sander’s efforts to pry loose records needed to complete his research have moved to the courts, following the filing last week of a lawsuit by Sander and the California First Amendment Coalition. Resort to the courts is necessary to vindicate principles of academic freedom and government transparency.
Political considerations should never be allowed to interfere with academic research, whether involving affirmative action, human stem cells, or the history of the Bay of Pigs invasion. To guard against such interference, no government agency should have complete discretion to release, or not to release, information sought by researchers. Even the state Bar, we hope to establish in this case, has an obligation to provide public access, subject to appropriate protections for confidentiality, to its files and databases.
Peter Scheer, a lawyer and journalist, is executive director of CFAC.
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