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Thursday, June 2, 2005

By Ralf Seiffe

OPINION - Reports on the front pages of yesterday’s newspapers signal an end to three long-running stories that exemplify the warning found in the very first number of The Federalist.

W. Mark Felt, once second-in-command at the FBI, has identified himself as “Deep Throat”, Woodward and Bernsteins’ famous source for their Watergate break-in reporting. Long suspected as the leaker, Felt was himself was later convicted of breaking into homes without search warrants. President Reagan pardoned him.

As J. Edgar Hoover’s protégé, Mr. Felt had risen to the number two spot in the Bureau and had hopes of succeeding the legendary--and well beyond retirement age--director.

We have now learned that Hoover had created what amounted to a secret police agency based on files he personally controlled. These files were full of unsubstantiated rumors, unproven accusations, and all manner of other derogatory information the Director had collected since taking over the FBI in 1924. To get his way, Hoover had threatened to use his private files against politicians and Presidents Kennedy and Johnson. One supposes the wily old Director threatened President Nixon, too.

Felt might have already been FBI Director but for the fact that Hoover had used the information in his files to extend his tenure beyond mandatory retirement. In 1972, Hoover went off to his great drag party in the sky and President Nixon acted decisively to break the extra-legal influence of the FBI. The president passed over W. Mark Felt by appointing L. Patrick Grey, an outsider and federal judge, to the slot. Nixon’s snub of Felt and the agency’s other senior officials, didn’t make Nixon any friends.

When the Watergate Affair occurred, the FBI investigated. The information gathered flowed through Mark Felt’s office and, as a federal agent, he was obligated to treat witness’ testimony in confidence. If he discovered a crime, he was obligated to report that to a federal attorney and a grand jury. By choosing to talk to Woodward and Bernstein, he may have extracted his revenge on President Nixon but committed a felony.

Deep Throat told Woodward and Bernstein to “follow the money”. By peddling his tale now, Felt ironically shows that to be good advice and ultimately reveals his own venality.

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Another story that reached a conclusion yesterday was the federal government’s jihad against the Chicago accounting firm, Arthur Andersen. The company collapsed after being convicted of a felony---now unanimously overturned by the Supreme Court.

The Supremes criticized the trial court’s jury instructions finding the judge had “failed to convey the requisite consciousness of wrongdoing.” Rehnquist said “..it is striking how little culpability the instructions required.” Andersen was, evidently, found feloniously responsible for resisting the government even in the absence of criminal intent.

At issue is the government’s contention that Andersen lawyers, following the firm’s established document destruction policies, induced employees to shred papers the government would later seek. From reports, these working documents supported memos the company produced. These final memos were available to the government but, apparently, the feds wanted to investigate the thinking process the accountants used to develop them.

The purpose of a final document is to fully state a position or decision. Intermediate steps are really irrelevant because the complexity of securities and tax laws makes it incumbent on professionals like Andersen to investigate how these complicated laws affect their clients. Indeed, it’s also a duty of such professionals to investigate how their clients can exploit these laws or regulations to their advantage.

Ideas occur to professionals that may seem great at first but, after investigation, are found to be improper or even illegal under some obscure law or regulation. It seems that a firm that takes pains to investigate their rights and opportunities under the thicket of laws is doing just what Mark Twain did when he said "I don’t make the laws, I just read them."

Reading, and thinking, is not a crime, especially when the purpose is to avoid criminality. Andersen or it’s partners may have stepped over the line in other cases, but in this one no one should be convicted of a crime they did not intend to commit.

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Finally, the Illinois General Assembly concluded its work for this session.

In a straight party-line vote, the Democrats raided the state’s already underfunded pension funds to declare a “balanced” budget. By not making deposits to the funds, they engage in what amounts to intentional theft from their employers, the people of Illinois.

Like most embezzlers, they probably intend to put the money “back” when they have it but, because they set the rules, there won’t be much pressure to do so.

This power grab clearly stiffened the spines of Republicans who, more often than not, fight themselves more than the Democrats. In that, we may be able to welcome real partisan politics back to Illinois.

In all three of these endings, we see government revealed in its naked form.

Felt, a corrupt official, used his position at a police agency to extract revenge and now, money. In the Andersen case, a federal judge ignored the basic standard of proof in a criminal case to effect a politically desirable outcome. In the General Assembly, majority party legislators bribed themselves and revealed their innumeracy. In doing so, they may have sown the seeds of a real two party system that may end the political monopoly Illinois Democrats enjoy.

Alexander Hamilton, writing as Publius back in October 1787, warned us was that there are influential politicians who “…hope to aggrandize themselves by the confusions of their country…”.

Perhaps these three endings will lift some of that confusion.

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Ralf Seiffe advises business start-ups and product launches from Chicago, Illinois and is a political analyst and columnist for the Illinois Leader.