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WINDFALL: THE BOOMING philosophy at Denmark’s Aarhus University. BUSINESS OF GLOBAL WARMING His master’s thesis was on “Greenlandic BY McKENZIE FUNK Autonomy or Secession: Philosophical The Penguin Press, New York, NY, 2014. 310 pages, Considerations,” and in it he grappled with $27.95. the work of American philosopher Allen Buchanan. Reviewed by Christopher C. Faille According to Buchanan, secession is right when it is a remedy for serious wrong. At one point in this multifaceted book, Or, as certain secessionists put the point in McKenzie Funk treats us to a brief discus- 1776, prudence dictates “that Governments sion of the philosophy of secession. Under long established should not be changed for what circumstances should one part of a light and transient causes” but may rightly larger political entity—perhaps a part with be changed in response to “a long train of boundaries of its own (a province or region) abuses and usurpations.” and some degree of autonomy (a capital city For Minik, the problem with that line and a legislature)—secede from the whole? of thought is that the Danes have been And when is this wrong? a relatively benign colonial power. Every Sam Houston is the name that always Greenlander has had full citizenship, for comes to my mind first when I think of such example, since 1953. Further, Denmark junction of events in 2006 should have made questions, because Houston had the rare pays to allow Greenlanders such as Minik to that plain to everyone. experience of playing a prominent role on attend universities in the mother country, That year saw Greenland lose 100 giga- both sides of the question. He of course or elsewhere in Europe, and write masters’ tons of ice, and drought-crazed camels ram- worked to secure Texas’ secession from theses such as his. Minik doesn’t believe, paged through an Australian village. Also Mexico, but, many years later, he was a though, that he should be expected to point in 2006, fire consumed millions of acres in critical figure among the Unionists of Texas, to a long train of abuses and usurpations by Siberia; the Bay of Bengal took over most of resisting that state’s secession from the the Danes in order to justify secession. Ghoramara Island in India; the Solomon Sea . Minik told Funk, “Sometimes you have conquered most of the village of Malasiga Sometimes secession requires violence to view this as a marriage: adults, consent- in Papua New Guinea; and the people of in order to be effective, as in the first of ing people, divorcing of their own free will.” Shishmaref, a village in Alaska, decided to the two cases in Houston’s life. Sometimes The no-fault secession seems to have been evacuate their homes ahead of a Chukchi it is attempted violently and fails nonethe- fueled in part by the positive economic con- Sea inundation. less, as in the second. In yet other cases, sequences for Greenland of recent changes Further, in 2006 scientists reported that secession comes about peacefully. One in climate. The referendum in 2008 and the a 40-square-mile ice shelf had broken off of these was Greenland’s secession from agreement with Denmark in 2009 together Ellesmere Island in the Canadian territory Denmark in 2008-2009. Actually, “seces- meant that Greenland has taken over control of Nunavut, and that a European satellite sion” may be rather too strong a word there, of its own natural resources—and because showed a crack in the ice pack that led as Greenlanders continue to leave certain of climate change these have acquired much all the way from northern Russia to the foreign-policy functions to the Danes. Still, greater value and marketability than they North Pole. The crack was temporary, but the two countries are held together only had even quite recently. Thus, because of indicative nonetheless. Beyond that year, by very loose reins, and we may as well climate change, Greenlanders are persuad- “[s]keptics would continue loudly doubting describe the referendum that produced this ed they can go it alone as a country. Parts of the overwhelming scientific consensus, but situation, and the subsequent negotiations, the island that had long been inhospitable to they were a smoke screen,” Funk tells us. as a successful case of peaceful secession. oil drilling have become amenable, and sud- Because Funk considers that argument denly there is what Funk calls “an untapped over, the book isn’t about that. Nor is it A Minute with Minik Gulf of Mexico in the North Atlantic.” about a plan to head off global warming In Windfall, McKenzie Funk unequivo- at the level of intergovernmental coopera- cally calls the activists who produced this What We Know Since 2006 tion. Funk quotes Jeroen van der Veer, an result in Greenland secessionist, and he has Greenland’s secession is only one of analyst working for Shell Oil Company, discussed the politics of independence, as many stories that Funk tells in this book. who has written rather wistfully of the well as the related politics of melting ice and He isn’t especially interested in arguing possibility that, after the expiration of the climate change, with one of those activists, with people who don’t want to believe that Kyoto Protocol, which at the time he wrote Minik Kleist. climate change is real, and so won’t believe this analysis was set for 2012, “a meaning- Minik (as Funk calls him) studied political it. In his eyes, it is plainly a fact, and a con- ful international carbon-trading framework

May/June 2014 • THE FEDERAL LAWYER • 1 with robust verification and accreditation He concludes his discussion of the Spragg was not the work of a conspiracy at all, but [might emerge] from the patchwork of bags, typically, with a comic opera note. “In the work of a lone wolf, and an act upon regional and city-city schemes.” 1996 [Spragg] completed a successful drag which the Nazis then seized to consolidate But Funk doesn’t hold out much hope for across Puget Sound to Seattle, only to have their power. Hitler got lucky, according to such a result. We should observe here that a tugboat run into his docked prototype.” this reasoning, because van der Lubbe gave most parties to the protocol have agreed to Funk’s prose is sufficiently lively, and Funk him just what he needed. Hans Mommsen its extension until 2020. Canada—an arctic takes us so stylishly through a wide range of and A.J.P. Taylor are prominent among power that is reaping the same benefits fascinating subjects (human, political, and those historians who have taken this view. as Greenland from warming trends—has technological) as such an amiable guide, pulled out of this second round. So far as that we hardly notice the deep gloom of his Another View I can tell, Funk is right on this and van der bottom line. There has also always been another view: Veer’s speculation was wrong. Nonetheless, Windfall is a sign of a that the Nazis created their own opportu- Instead, what this book is chiefly about healthy shift in the way we talk about global nity, and that they enlisted or tricked van is the way in which people all over the warming, and the Spraggs of this world will der Lubbe into helping them. In Burning world—people who never cross the cogni- never be as gloomy as the Funks, though the Reichstag, Benjamin Carter Hett, pro- tive radar of newspaper editors or read- lots of prototypes get busted on the way to fessor of history at Hunter College, has ers—are adjusting to the fact of climate adaptation.  now revived the case for the latter theory, change, “so if there’s a glimpse of the future freshening up some old arguments with in these pages, it’s only because we’re the Christopher Faille graduated from new evidence. He doesn’t profess to know ones making it.” Minik is making the future Western New England College School of how the Nazis enlisted or tricked van der in his manner, but so are the hundreds of Law in 1982 and became a member of Lubbe. He says that, because “[d]eath has entrepreneurs Funk has met who are each the Connecticut bar soon thereafter. He long since taken anyone who knew ... this convinced that there is profit to be made is at work on a book that will make the part of the mystery seems destined to stay from climate change. quants of Wall Street intelligible to sociol- with us.” ogy majors. Here’s an intriguing question: what was Towing Bags of Water van der Lubbe doing between 6 p.m. and 9 One of the important features of the near BURNING THE REICHSTAG: AN p.m. on Feb. 27? His confession said that future is that hydrological maps—our ideas INVESTIGATION INTO THE THIRD he had been waiting around since 2 p.m. of where fresh water may be found, and REICH’S ENDURING MYSTERY for the cover of darkness. But it gets dark where it is needed—will have to change. BY BENJAMIN CARTER HETT in late February in Berlin by 6 p.m. Why did Droughts will hit unaccustomed places, Oxford University Press, New York, NY, 2014. 413 the arsonist dawdle for another three hours and places that previously had droughts as pages, $29.95. before acting? fluctuating temporary conditions will now As Hett observes, “The evidence of become permanently dry. Reviewed by Christopher C. Faille the regular rounds of Reichstag employ- Terry Spragg is one of the entrepreneurs ees—the mailman, the porters, the lighting who hopes to benefit from this. The trick Whodunnit? Stormtrooper Heini Gewehr, man—showed that there was a window of is to make a profit off ways in which water with help from Marinus van der Lubbe and, opportunity between 9:00 and 10:00 when can be carried about more efficiently than it quite possibly, others. there would be no one inside the building has been. Thus, the “Spragg bag” came into That’s the spoiler. Here’s the crime. The to disturb an intruder.” It beggars belief existence: this is a water-transport bag of German parliament building, the Reichstag, that van der Lubbe stood about, in the fabric that can be attached to other Spragg caught fire just after 9 p.m. on Feb. 27, already dark streets of Berlin, for three bags (to form a long towable train) with a 1933, with calamitous consequences for hours, doing nothing at all on a freezing special patented zipper. and the world. evening (6 degrees below centigrade), and The Spragg bag and like inventions may When that fire began, was then broke in just as the best time to do so give some people hope that in the end the the leader of a shaky coalition within a had arrived, without someone having tipped human race will muddle through the coming constitutional republic. Before the ashes him off as to when that best time was. climate changes without disastrous conse- had cooled, Hitler was more than that: He Above I observed that van der Lubbe’s quences—that we will learn to adapt and had assumed dictatorial powers in order to consistent insistence that he was a lone-wolf that the profit motive will be the motor of resist the alleged Communist menace that, arsonist did have one arguable exception. the adaptation. he proclaimed, the fire represented. That came during his trial. The presiding Some people may be hopeful, and some Marinus van der Lubbe, a Dutch citizen judge, Wilhelm Bünger, asked van der Lubbe may even have their hopes lifted by parts of found inside the building while it burnt, where he’d spent the day before the fire, this book. In fairness to Funk, though, we soon confessed. Until his execution 11 which was Sunday, Feb. 26. The defendant have to say: he isn’t hopeful. He is as pes- months later, he took all the guilt upon said, “At the Nazis.” Everybody did a double simistic about private-sector adaptations to himself. He adhered to this consistently, take. Bünger asked again, “With whom, did the consequences of global warming as he is with one possible exception (to which I’ll you say?” This time van der Lubbe went about public-sector efforts at mitigation. His return). Many distinguished historians have back on script and replied, “No one.” The bottom line is one of gloom. agreed with him, contending that this fire next day, the propaganda ministry ordered

2 • THE FEDERAL LAWYER • May/June 2014 the German press to limit its coverage of the Accordingly, although the government Believing Diels remainder of the proceedings. indicted four co-conspirators along with One might be inclined to take Diels’ van der Lubbe, the indictment itself statements with a grain of salt. After showed, in Hett’s words, “ambivalence” all, everybody who had been part of the Much of Hett’s book focuses on the on “the question of what those co-defen- German government during the Nazi peri- life and actions of Rudolf Diels, the com- dants might actually have done. How they od was telling such tales to the occupation mander of the political department of the had specifically been involved in the fire officials at the time. They were all saying Berlin police at the time of the fire. That was, said the indictment, irrelevant.” things such as, “I was against Hitler, the April, his office would acquire a new name, Skipping forward a number of years, in dictatorship, the war, and the Holocaust Geheimes Staatspolizeiamt, a mouthful 1946, Diels wrote to the British occupa- from the beginning—but I had to go along that is better known as the , which tion authorities. He was unhappy about to save myself—the real culprits were was administered by the , or the fact that a former associate of his, [insert names here.]” Why is Diels’ state- SS. Diels doesn’t cut a large figure in most Hans Bernd Gisevius, had written a book ment different? history books—he would be dismissed from telling a story that implicated Diels him- If I understand Hett, he believes that his post a year after the name change, self in the fire. So Diels wrote to finger Diels’ charge is credible for four reasons. and control of that agency would go to someone else: First is the physical evidence. Out of con- and , siderations of space, I have not discussed both of whom do cut large figures. As I have been informed by the this matter, but Hett does a good job with But Diels was responsible for the inves- defense counsel for the SA, the it. As interpreted by credible experts, the tigation of the arson and for van der former SA Leader Heini Gewehr, physical evidence indicates that van der Lubbe’s interrogation. At a press con- who in Gisevius’s book To the Lubbe could not have done everything ference on March 3, 1933, Diels told Bitter End is identified as the in the time available to him for which he reporters that van der Lubbe was “one chief culprit in the burning of took credit or blame. Somebody else had of the arsonists in the attack on the the Reichstag and is also held by to have been there. Reichstag” [Hett’s emphasis]. From this me to be so, is presently in an Second, Gewehr was, in Hett’s words, time on, there was a good deal of ambi- American internment camp. In the “the SA’s recognized expert in the deploy- guity in Nazi ranks about how to portray interest of determining the extent ment of phosphorus for political arson,” the fire. If they painted it as a plot, of Göring’s responsibility, and in having done analogous deeds before. alleging that van der Lubbe had assis- light of the considerable inter- Third, Gewehr had no alibi. If he wasn’t tance (as Diels had implied), then they est of the German public in the inside the Reichstag around 9 p.m. on Feb. would open themselves to the charge clearing up of this first crime of 27, then logically he must have been some- that they were themselves the ones who the National Socialists, but also place else. Where? He “was never able to had provided that assistance. Yet, if they because Gisevius brings my name give a consistent and plausible account stuck to the view that Diels was a lone into immediate connection with of where he had been that night.” Other wolf, then, even given van der Lubbe’s this event, I ask that Heini Gewehr otherwise-plausible suspects (including, real Communist connections and possible be interrogated. if you’re wondering, Diels) did have alibis. ideological motivation, he would seem Fourth, the fact that Diels was agree- an inadequate bogeyman to justify the After the war, Diels also repeatedly ing with Gisevius in attributing the crime dictatorial powers that Hitler had already told journalist Harry Schulze-Wilde that to Gewehr is itself important. Diels and seized. the chief culprit in the was Gisevius hated each other. Diels had pushed this same fellow, Heini Gewehr. He told Gisevius out of the SS in a power struggle. him in 1947 and 1952, and, then, in 1957, To Americans, all this is reminiscent of elaborated that he, Diels, knew what debates about the Kennedy assassination. chemical solution Gewehr had used. That Lee Harvey Oswald is our van der Lubbe, a is important, because it indicates that man with real Communist connections and Gewehr didn’t merely encourage van der who did in fact have something to do with Lubbe, or tell him that 9 p.m. was a good a violent crime. But neither of those points time for such a deed— Diels was sug- closes down the argument that there is gesting that Gewehr was in the building more to the story, and that the government using that solution. that investigated the crime also may have Schulze-Wilde seems never to have contained elements within itself that had published these interviews. A letter he committed the crime. wrote to a friend, in 1961, describing them, like the Diels’ letter to the British The Chain of Command occupation authorities quoted above, are Among those who accept that notion among the fascinating new pieces of with respect to the Reichstag fire, the ques- evidence that Hett’s study of this contro- tion arises, how far up the chain of com- versy has brought to light. mand did government participation extend?

May/June 2014 • THE FEDERAL LAWYER • 3 Hett notes that Diels, in the 1946 letter ian58.blogspot.com/. William James has villains than heroes to some of its reviewers. mentioned above, had suggested that the taught him that the only way we humans Some complained that shorting activity can Nuremburg tribunal ought to inquire into can find out “by what sort of conduct help sustain the bubble off which it profits, the responsibility of Hermann Göring, a the maximum amount of good can be so Burry and others Lewis portrayed in Hitler intimate. Diels was agreeing with gained” is by analyzing the record of our a positive light were actually part of the Gisevius in fingering Gewehr in order, as species’ experiments. problem. Even if they weren’t, it seems he said, to help the occupiers explore the counterintuitive to celebrate people for the extent of Göring’s responsibility. FLASH BOYS: A WALL STREET profits they made by building a funeral Göring is best remembered as the com- REVOLT parlor just before a deadly plague hit town. mander-in-chief of the Luftwaffe (air force). BY MICHAEL LEWIS Janet Tavakoli, an expert on CDOs and the He didn’t assume that post, though, until W.W. Norton & Co., New York, NY, 2014. 274 pages, principal of Tavakoli Structured Finance 1935. In 1933, the year of the fire, he was $27.95. Inc., wrote in a review of The Big Short that Minister of the Interior for , and in Lewis had “mangled the facts in his eager- that capacity he occupied a residence that Reviewed by Christopher C. Faille ness to create a story.” was connected to the Reichstag by a tunnel. Lewis is also the author of Boomerang That tunnel is crucial, because it means that Michael Lewis’ books are Events. (2011), which is probably the weakest of poor van der Lubbe might have sincerely Lewis is the author of, for example, his books. Here he peddles the overly broad believed himself the sole arsonist. He need Moneyball (2003), a book on the econom- thesis that just about everybody is to blame never have seen Gewehr or anyone with ics of baseball, the book that became the for the financial crisis in the United States Gewehr. They may have come and gone basis for a successful 2011 movie of the in 2007-2008 and, for that matter, the sub- already, through the tunnel, by the time van same name, starring Brad Pitt. Lewis also sequent crises in the rest of the industrial- der Lubbe arrived. wrote The Blind Side (2006), which was ized world. As he says in the introduction to The official residence was behind the reviewed in the May 2007 issue of The Boomerang, after “I wrote the book about Reichstag, and a boiler house was behind Federal Lawyer, and is about the evolu- the U.S. subprime mortgage crisis and the that. The tunnel connected each of the tion of football’s offensive strategies. A people who had made a fortune from it, but three buildings. Anyone attempting to enter subplot in this book treats of the life of [then] began to travel to these other places, the Reichstag’s basement this way would Michael Oher, from his impoverished child- just to see what was up.” The book is as have had to open iron doors, and that would hood through his draft as a right tackle by scattershot as that introduction suggests. It have required master keys. the Baltimore Ravens. The Oher storyline turns out that many other things were up. Hett considers it “possible, though became a movie in 2009, and Sandra Bullock Trying to tie it all together, he tells us that unlikely, that the SA carried out the attack won an Academy Award for playing Oher’s cheap credit “offered entire societies the on the Reichstag entirely on its own initia- adoptive mother. chance to reveal aspects of their characters tive, with no orders from higher up.” SA Lewis is also the author of The Big they could not normally afford to indulge. personnel could, for example, have entered Short (2010), which looked at the financial ... Americans wanted to own homes far the tunnel through the boiler house, and crisis of 2007 through the eyes of certain larger than they could afford. ... Icelanders made their way along the tunnel quietly savvy investors who made a lot of money wanted to stop fishing and become invest- enough so as not to alert anybody in the res- on the short side of the Collateralized Debt ment bankers. ... The Germans wanted to idence. But it seems more likely that Göring Obligation (CDO) bubble. In less technical be even more German; the Irish wanted to was responsible, and (given the speed with terms, Lewis’ small band of protagonists stop being Irish.” which the propaganda ministry reacted to accurately predicted and bet that many peo- Yet even this second-tier Lewis book early reports of the fire) that Goebbels had ple would default on their home mortgages. was an Event of sorts. It catalyzed a lengthy at least received a heads-up. They made a fortune on their bet. lament in The New Republic about how As to Chancellor Hitler, Hett says there Michael Burry, one of the central figures the notion that everybody is to blame has is little or no evidence, direct or indirect, in The Big Short (and I’m guessing the become “the big lie of the post-crash econo- that he knew of the fire, much less that he central character if a movie is made) has my.” And now we have a new Michael Lewis ordered it. Asperger’s Syndrome. This has worked out book, Flash Boys. But that matters little. To return to the well for him, because the capacity for long issue of historically freighted “luck” for hours of solitude, and an inability to become And, Yes, It Is an Event a final thought: Even if the fire came as bored with a problem once fixed on it—two The odds are good that most readers of a surprise to Hitler, if Hett is right, then common features of Asperger’s—were pre- The Federal Lawyer have some knowledge it becomes absurd to say that Hitler was cisely the traits that allowed Burry to ana- of the broad outlines of the book by now. lucky to have received this opportunity to lyze the fine print of CDOs. Burry’s hedge Its subject is the newness of stock market seize dictatorial powers. Members of his fund, Scion Capital, earned $750 million in structure and mechanics in the second inner circle offered him a gift. He simply 2007 as a consequence. decade of the 21st century. The days of unwrapped it.  market specialists in colorful jackets, the Simplicity and Lamentation guys who used to stand on a trading floor Christopher Faille is the blogger behind Perhaps unsurprisingly, Lewis’ protago- and yell at each other, accompanying their Jamesian Philosophy Refreshed, james- nists in The Big Short seemed more like yells with vigorous hand gesture—those

4 • THE FEDERAL LAWYER • May/June 2014 days are long gone. Some trading floors his clients is ready to buy Widget Enterprise as a place where investors—personal and still exist, but they are kept alive more for stock at the same price at which another institutional—who see themselves as part nostalgia than for function. Trading happens client is willing to sell it—why involve the of the technological have-not class can kick in black boxes, at incomprehensible speeds, exchange at all? their shoes off and feel at home. through the use of ever more sophisticated Also, there are institutional investors Will there be broad reforms as a con- computer algorithms, and the very meaning who deal in large chunks of stock who like sequence of the attention that issues of of such terms as “stock exchange” is up for their liquidity dark, because they can avoid market structure are now receiving? I don’t grabs. And, yes, given these circumstances, tipping their hand—disclosing their invest- know. Should there be? Yes, I can think of new ways for some people and institutions ment strategies. a few good suggestions. But I fear that if to cheat others have arisen. According to many of the people who regulators get rushed into Doing Something In my own writing, I’ve touched upon think regularly and clearly about market because of a big publishing event and sub- many of the issues that Lewis does here. structure issues, the proliferation of dark sequent brouhaha then they are likely to do Indeed, I discussed structural issues in pools is part of the problem. They have more harm than good. the January/February 2013 issue of The given us a world in which there is no longer This fear was exacerbated on the morn- Federal Lawyer, in my review of Broken such an entity as “the market as a whole.” ing of April 11th when I saw an op-ed piece Markets, by Sal. L. Arnuk and Joseph C. Indeed, in certain passages of Flash Boys, by Burton Malkiel and Arthur Levitt in Saluzzi. Lewis himself seems to share the view that the Wall Street Journal, addressing what Lewis brings his own brand, and he this is an important part of the problem. they describe as the “firestorm of criticism” brings his habit of putting a striking indi- Thus, there is some irony in the fact that of high-frequency trading. Those are both vidual at the center of the story. The he also presents IEX—a dark pool—as the names with which to conjure, and they con- evolution of football strategies yielded solution. Apparently, the fragmentation of firm the bigness of this publishing Event. Michael Oher; the subprime mortgage the public-corporation equity marketplace Malkiel was a director of the Vanguard bubble yielded Michael Burry; and, in is a good thing when one of the fragments Group for more than a quarter century. He Flash Boys, algorithmic trading gives involved is addressing other pieces of the has also been dean of the Yale School of us Brad Katsuyama. Katsuyama is a puzzle. But Lewis can make nothing of the Management and chairman of the econom- Japanese-Canadian whose grandparents irony there, because irony is not part of his ics department at Princeton. Levitt is now were interned in prison camps in the brand. Good guys versus bad guys: that’s on the board of Bloomberg LLP and was west of Canada during World War II. Until his brand. chairman of the Securities and Exchange recently, Katsuyama traded technology So powerful was the immediate impact of Commission from 1993 to 2001. and energy stocks on Wall Street on behalf Flash Boys that, the week it appeared, two of the Royal Bank of Canada (RBC). of the business eminences discussing it on Scalping Katsuyama became persuaded that a program on CNBC were speaking to each Malkiel and Levitt propose an expansion the markets were rigged against him, other sounding like street toughs circling of the scope of insider-trading enforce- and against RBC, by traders on the cut- each other with knives in hand. “So if you ment. Those aren’t their words, exactly. ting edge of technology. Wall Street had want to do this, let’s do this.” Much of the essay is devoted to the claim become an arena of haves and have-nots, that the fuss Lewis has kicked up is exces- where the haves are defined by the speed Let’s Do This sive. But they also say that one of the real with which they execute their trades, their One of these eminences was William problems with high-frequency trading is possession of the latest and most sophis- O’Brien, the president of BATS Global that well-positioned traders “can see trade ticated algorithms, and their employment Markets, a stock exchange that is accom- orders from other investors before they are of the limited number of coding geniuses modating of high-frequency traders. The capable of devising and maintaining the other was Katsuyama himself. Lewis had fanciest machines. RBC was a have-not, attributed to Katsuyama the notion that the and this limited Katsuyama’s ability to markets were “rigged.” O’Brien took par- serve the interests of his clients. So he ticular exception to that word, and wanted left his job at RBC and started a dark pool, Katsuyama either to own it or disown it. called at first “Investors’ Exchange” and Katsuyama tried to back off the term. “It’s later just IEX. disgusting that you’re trying to parse your words now,” O’Brien told him. Katsuyama What’s a “Dark Pool”? decided to own the word then. “Dark pool”: That is a dramatic way “I believe the markets are rigged. ...” of describing the fact that many trades of “Okay, there you go.” exchange-listed companies take place way “And I also believe that you’re a part of off the exchanges, outside of any circuitry the rigging. So if you want to do this, let’s with which the exchanges have anything to do this.” do. Dark pools developed a few years ago in The heated discussion that followed gen- part through brokerage-house internaliza- erated little light, though it surely sold tion. That is, if a broker knows that one of books. It also helped raise the profile of IEX

May/June 2014 • THE FEDERAL LAWYER • 5 executed,” and can execute their own pur- hearings were held, not about the burglary, undergraduate school was fond of pointing chases “just ahead of those orders and run but about the FBI’s invasion of that most out, the key political animal in the United the price up just a bit, pocketing the differ- fundamental of rights, famously identified by States is neither the elephant nor the don- ence.” This scalping, they say, amounts to Louis Brandeis as the right to be let alone. key, but the gored ox. It is one thing to spy insider trading, and the SEC should address The FBI had violated that right with impuni- on 300 million people living in the United it under that rubric. ty, and Congress was having none of it, or at States but, to Senator Feinstein, it is quite That would be an expansion of the idea least less of it. It seemed the country would another to spy on the 20 or so working for of “insider trading,” insofar as there is not tolerate unwarranted government intru- her. no fiduciary duty that has been breached sions into the private lives of the citizenry. Which brings me to Spying on when an algorithm runs in front of someone Times have changed. With the world Democracy, a survey of the multifarious else’s bid in such a way. Still less is there connected to the Internet and vast num- ways in which government and transnational a clear duty between the actual human bers of people with smart phones and ever corporations use their powers to subvert beings involved who benefit from the pen- more sophisticated surveillance technology, democratic rights. The author, my friend and nies accumulated in this way, on the one the ability of any government to spy on its colleague, Heidi Boghosian, is the longtime hand and the traders, and their clients, get- people has expanded exponentially. Since executive director of the National Lawyers ting scalped, on the other. the events of Sept. 11, 2001, the willingness Guild, of which I have been a member all my I don’t wish to make light of the scalp- of the U.S. government to do so, of many professional life, dating back to law school in ing, but to call it “insider trading” looks to accept such intrusion, and of elected 1969. I worked particularly closely with her like a significant expansion of an already officials to countenance it, has opened the on NLG organizational matters for my three worrisomely vague enforcement mandate. A doors to a new era of U.S. government spy- years as its president from 2009 to 2012. I better approach might be to roll back some ing. Revelations about such spying, such as know how much of my time was taken up of the recent regulatory changes that have the fact that the National Security Agency with Guild affairs and can only imagine how empowered these robots and robot masters. has kept information about every telephone much more of hers was, so the fact that Here’s a thought: some of the key changes call made in the country—and its direc- she found the time to write a book about that require a rollback took place under tor’s having lied about it before Congress— government surveillance came as a welcome Levitt’s watch. do not elicit the universal condemnation surprise. We can be grateful she did, because For those who have been drawn into the that COINTELPRO did. Hardly a whimper the Guild has long been a leading voice subject of market structure and mechan- of opposition could be heard in Congress in opposition to government intrusiveness ics for the first time by Lewis’ book, please as many gave full-throated support to the and in defense of First Amendment rights. get a copy of Arnuk and Saluzzi’s Broken program. These included President Obama, Consequently, her day job makes her par- Markets, a far better though not so well whose experience as a professor of consti- ticularly well qualified to address the subject. written account.  tutional law gave him not a moment’s pause All of us who, like Ben Franklin, are unwilling before he declared that, because no one was to trade essential liberty for the illusion of Christopher Faille is a prolific author actually listening to the calls, he could not safety should be grateful she found the time. of online book reviews for The Federal understand why there was any fuss. He has, Subtitled Government Surveillance, Lawyer. in the face of vocal resistance from defenders Corporate Power, and Public Resistance, of civil liberties, slowly and grudgingly agreed the book argues that the former two are SPYING ON DEMOCRACY: that the data should not be kept by the NSA conjoined twins of repression and the latter GOVERNMENT SURVEILLANCE, but maintained in private hands until asked the only viable defense against it. Indeed, CORPORATE POWER, AND PUBLIC for. It requires splitting the finest of hairs to the scope of the book and its understand- RESISTANCE perceive the difference. Parenthetically, the BY HEIDI BOGHOSIAN argument that, if such a program had been in City Lights Books, San Francisco, CA, 2013. 349 place before Sept. 11, the attacks could have pages, $18.95. been prevented, has always struck me as disingenuous. After all, it has been acknowl- Reviewed by David Gespass edged that our intelligence agencies knew that calls were being received by al Qaeda On March 8, 1971, the FBI office in abroad, but they did not know the source of Media, Pa., was burglarized. The per- those calls. Why the sources could not have petrators learned of, and exposed, the been located, however, remains a mystery Bureau’s Counterintelligence Program unexplained by defenders of the NSA. (COINTELPRO) of spying on and subverting In the Senate, defense of the NSA and individuals and organizations it perceived as other spy agencies was led by California political opponents. Back then, pundits and Senator Dianne Feinstein, who was later elected officials at least had the good grace to shocked—shocked—to discover that the CIA be stunned and appalled that a government had been hacking into computers of mem- agency was spying on American citizens bers of her staff on the Senate Intelligence engaged in lawful activity. Congressional Committee. As a politics professor of mine in

6 • THE FEDERAL LAWYER • May/June 2014 ing and exposure of the many and various pose of better combating terrorism. In fact, ways in which individual liberties are being their main accomplishments seem to be to attacked is its chief virtue. It is all too easy arrest people planning to protest at “National to lose sight of the forest by focusing on a Special Security Events” such as political con- single tree. Those who concentrate on gov- ventions, World Trade Organization meetings, ernment surveillance may, for example, fail presidential speeches, and anything else the to note the pervasiveness of corporate power government feels like designating. A princi- (though the Supreme Court has certainly pal result has been recovery of hundreds of emphasized that with its Citizens United thousands of dollars in damages for police and McCutcheon decisions). And few may be violations of people’s constitutional rights— aware of the many ways in which the federal violations that the government seems to see government, in cooperation with local police as a necessary cost of doing the business of agencies, interferes with people’s exercise of restricting those rights. their First Amendment rights. But all is not lost in Heidi Boghosian’s The power brokers in the United States world, because of those she calls the “custodi- are well aware of how these many strands ans of democracy”—individuals and organiza- serve the same end of maintaining their tions who resist and, by resisting, protect and wealth and power, and have been fairly suc- defend us all. They expose the intrusions, cessful in hiding their interrelatedness and they represent the victims, they refuse to synergy. Spying on Democracy explains submit. this with clarity and with well-researched All manner of people across the politi- and documented examples, opening with the cal spectrum are fond of comparing one or story of New York police choppers, presum- another aspect of contemporary life with ably needed for counterterrorism, hovering . Indeed, those analogies are above of group of Critical Mass bicyclists. so commonplace as to be devoid of all mean- Thus begins the story of how the government ing, so it is with some trepidation—and the now conflates terrorism with protest and need for explanation—that I mention fascism. how private entities take up the slack when But, while is a particularly virulent government is constrained by what remains form of fascism, it is not the only form. In its of the First Amendment. Thus, we learn how essence, fascism merges the political state corporations hire private firms to infiltrate with monopoly capital. It does not suddenly and otherwise spy upon activists, and then emerge full-blown on a dreary day. It comes share the intelligence they glean with the step by step, with each step more or less government. Joseph Sordi, CEO of Strategic hidden and rationalized. One must look not Security Corporation, for example, feels free at the steps themselves, but their trajectory. to proclaim: “Law enforcement agencies can The fascist threat in the United States is not be somewhat inhibited as to what they can the threat of Nazism, but of the increasing and can’t do by First Amendment rights and identity of the U.S. government working with civil liberties, but as a private contractor, we private businesses. Hence, my lack of enthusi- are uninhibited by departmental bureaucracy asm for the idea of maintaining phone records and can maintain data bases of individuals.” with telecom giants rather than the NSA. Despite Sordi’s frankness, too few recog- The threat of fascism hardly means it nize the pervasiveness of government and is inevitable. It does mean we have to arm corporate spying in our age. But, as Heidi ourselves with knowledge and actively resist. Boghosian reveals, it touches virtually every As Karl Marx said, the point is not simply aspect of our lives, almost from the time we to understand history, but to change it. The are born. Children are now taught that sur- enemies of democracy have learned this les- veillance is natural and necessary. Lawyers’ son all too well. In Spying on Democracy, formerly privileged and private meetings Heidi Boghosian calls on all its custodians, of with their clients are subject to eavesdrop- which she is surely one, to do the same.  ping. Personal information about consum- ers, gleaned by corporations, is shared with David Gespass is a lawyer in private prac- the government. “Fusion centers” join with tice in Birmingham, Alabama. He is the federal and local police agencies, military immediate past president of the National units (even though the Posse Comitatus Act Lawyers Guild and a long time member is still supposed to prohibit the military from of the editorial board of its intellectual engaging in domestic law enforcement), and journal, the NLG Review, and served as its private contractors, again for the alleged pur- editor in chief from 2006 to 2009.

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