The liberal double standard

It continues to amaze me how the liberals happily accept double-standards, especially when it saves their bacon from the frying pan.

As you might have read, Sandy Berger, former National Security Adviser to President Clinton, finally admitted culpability to what he was caught on camera doing -- stealing and destroying classified documents in an obvious effort to impede an investigation of "What did the Clinton administration know about al Qaeda, when did they know it and what the heck were they doing instead of protecting the country against terrorism?"

Berger copped a plea to a hand-slap misdemeanor charge -- "unauthorized removal and retention of classified material" -- will pay a $10,000 fine, serve no jail time but surrender his security clearance for three years. This, conveniently, means he will get it back just in time for the next election. Just as he conveniently managed to delay this admission and to hold onto his security clearance while advising Democrat candidate John Kerry in the 2004 election. And despite insider Democrat knowledge of his actions with classified documents in the National Archives building, Berger was being discussed as possible Secretary of State if Kerry had won.

Some ex-military folk I know quickly point out that had Berger been a member of the military and performed similar actions, regardless of whether it was deemed incidental, an oversight, or intentional, Berger's document-stuffing in pants and socks and destruction of evidence -- would be a fine of $100,000 and 10 years in military prison.

No wonder people flock to politics instead of the military.

As you might have guessed, I have my own suspicions on what kind of documents might have been of interest to the Clintonistas to the point their destruction must be ensured prior to any investigation. I wrote about it in my post "What the 9/11 widows never knew ..." but neglected in that post to add some salient information I had posted on the usenet in 1997 about some other missing classified documents ferreted out of the Department of Commerce over to the Small Business Administration:

Google hyperlink

CIA SEIZES FILES OF CLINTON FUNDRAISER

PAPERS INVOLVE U.S. TRADE MISSIONS
By Mary Jacoby and David Jackson, Washington Bureau, Chicago Tribune
Web-posted Saturday, November 2, 1996; 6:01 a.m. CST
Dateline: WASHINGTON

Amid a growing controversy over political contributions, authorities Friday continued to inspect contents of a safe with files that were apparently kept for a top Democratic Party fundraiser by an official in the Small Business Administration.

The inspection came a day after 25 of at least 40 files reportedly kept for fundraiser John Huang were taken by a representative of the Central Intelligence Agency, and are being held by that agency, according to congressional sources.

The CIA move raises questions as to what the agency is looking at and why. Some of the materials may be classified Commerce Department records involving trade missions. The confluence of foreign trade and campaign contributions is at the center of the current campaign finance controversy.

Meanwhile, as campaign finance took center stage in the waning days of the presidential campaign, the Democratic National Committee filed a formal spending and contributions report Friday after initially deciding to withhold the information. It did not appear to confirm suspicions of political skullduggery voiced by Republicans.

A day after the CIA took possession of the 25 files, 15 others remained in the custody of the Small Business Administration's inspector general.

A detailed inventory of those 15 files shows they concerned a broad range of topics and appear to be briefing and background papers for trade missions. It is not clear if they were all collected by Huang, formerly a Commerce Department official, or relate to topics he was working on while at Commerce.

Several of the files detail efforts by U.S. computer companies to sell "encryption" software overseas. Those are programs that allow computer users to block their electronic files from espionage.

Efforts to sell the software have sparked a clash between Commerce officials, who want U.S. companies to profit from the sales, and the National Security Agency, which monitors international data traffic for law enforcement purposes.

The NSA fears that the spread of the most complex programs will hamper its ability to monitor terrorism, as well as illegal narcotics and weapons sales.

Other files concern the Foreign Corrupt Practices Act, the U.S. law that governs bribery of overseas officials. Some files appear to include classified Commerce Department papers, according to the inventory.

An official familiar with the investigation said Ira Sockowitz, special assistant to the SBA's deputy administrator, has kept the files in a 600-pound safe that he had installed on Aug. 2.

Sockowitz worked at the Commerce Department with Huang, and was detailed to the SBA from the Commerce Department in late May. He began working officially for the SBA on July 7.

Sockowitz could not be reached for comment at his home Friday evening. Rep. Jan Meyers, a Kansas Republican who heads the House Small Business Committee, on Friday asked the SBA to disclose more information about Sockowitz's responsibilities and background. The agency said it was doing its best to comply.

The request for the documents came in response to a lawsuit from a conservative advocacy group called Judicial Watch, which is investigating Huang as part of a two-year-old lawsuit that contends the Commerce Department failed to release documents on trade missions led by late Commerce Secretary Ron Brown.

The group says the department used trade missions improperly to raise funds for Democrats.

The fact that the DNC reversed itself Friday after arguing it was not legally required to disclose the information is a sign of heightened sensitivity to the political consequences of appearing to flout campaign finance laws.

"The filing today is a purely voluntary act that was taken under political pressure," Democratic Party attorney Paul Smith said Friday during an emergency federal court hearing requested by the GOP.

Questions about contributions to the Democrats from foreign sources has sparked an uproar over campaign finance issues, with President Clinton giving a major policy speech on the subject Friday.

Last month, the DNC suspended Huang, a former Commerce official-turned-Democratic Party fundraiser. Huang was responsible for raising more than $4 million in donations, including a controversial $1 million from the Riady family of Indonesia and their associates.

The DNC has returned some of the contested donations, including $250,000 Huang raised from the recently established American arm of a Korean company.

Contributions from foreign nationals who do not hold green cards and from foreign companies are barred by law.

And in a bizarre twist, administration officials announced Friday that there were two men named John Huang who had regular access to the White House. The disclosure came after reports that Huang had visited the White House at least 71 times in the last two years.

The other John Huang is an employee of Vice President Al Gore working on the administration's "reinventing government" project, officials said.

The DNC spending and contribution report, meanwhile, illustrates a cash-strapped party that had to take out a short-term $4 million bank loan on Oct. 16, but lists no direct spending on the election efforts of Clinton or House or Senate candidates.

The DNC had argued that it was not required to file the report because the party had not made such direct federal campaign expenditures, but it reversed itself after an outcry from Republicans and government watchdog groups.

The report showed the party with $6.7 million cash on hand and debts of $4.1 million. And in a move suggesting a cash-flow problem, it took out a short-term $4 million loan from Nation's Bank on Oct. 16.

If the Democrats had not filed the report, it would have been the first time since post-Watergate campaign disclosure laws were enacted in the 1970s that a national party had failed to do so.
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(C)1996 Chicago Tribune

[It should be noted that Sockowitz eventually was cleared of any wrong-doing.]

10b-5 is the subparagraph of 17 C.F.R. 204.10b-5 which governs insider information as it relates to the trading of securities. It also happens to have been the primary topic of a research paper of mine in graduate school. And who says graduate school is a waste of time! ;)

The perfect insider scheme is the trading of secret information for stock profit. Tips are passed from the CIA/NSA to corporations regarding technologies, methods, competitive intelligence, etc.

How could General Dynamics/Electric Boat build a better submarine if it did not have information of surveillance technology employed by enemies/friends of the U.S.? Etc.

The secrets aid the defense preparedness of the U.S. but it also increases the value -- and therefore the stock value -- of the concerned corporations. It would be treasonable to transfer that specific information to persons or foreign governments (See Pollard, Julius and Ethel Rosenberg cases et al), but not to transfer information on the company receiving that information to those who could then profit from investing in such corporations. E.G. One doesn't have to have access to the secrets to profit, just access to the information on the companies that _do_ receive the secrets and _will_ act upon them.

For instance, what if one were to have access to knowledge as seemingly innocent as the passenger list of the Dubrovnic flight? Those 12 CEOs from American corporations were being set up by Ron Brown to obtain rebuilding contracts. When the war ends and the bidding on the infrastructure rebuilding begins, which companies would have the inside track? And if you invested in those companies, would not your investment pay off when the contracts were let?

That's minor. Suppose you knew that the secrets of german rocket scientists were going to be given to Westinghouse to build better ICBMs? Or that Lockheed would receive information for its highly secret "skunkworks" so it could develop, build and sell to the U.S. government the U-2 and the SR-71?

Not saying this is party specific, but what if you were a financier from Indonesia or some other FOB ("Friend of Bills"), wouldn't you want that kind of inside information that would be almost impossible to trace and certainly impossible to prove? It'd certainly warrant a commission on the tip, don't you think?

Let's say you were the chairman of a large computer software company who receives such tips. You knew that such tips would increase the value, and therefore the stock value of your company, but the secrets acts would bar you from disclosing such materially sensitive information, such duty being required of you under 10b-5. In this case, the requirement of the secrets laws take precedence over the securities laws. And it's perfectly legal.

For background information:

In SEC v. LUND, 570 F. Supp. 1397 (CDCA 1983), the court ruled that information is "material if there is a substantial likelihood that a reasonable investor would consider the information important in making an investment decision."

In Financial Industrial Fund, Inc. v. McDonell Douglas Corp., 474 F.2d 514 (10th Circ. 1973), the court noted: "Undue delay by a corporation in revealing facts, not in good faith, can be deceptive, misleading or a device to defraud under the SEC securities fraud rule."

In Dirks v. SEC, 463 U.S. 646 (1983), the court held: "In determining whether a tippee is under an obligation to disclose or abstain, it thus is necessary to determine whether the insider's 'tip' constituted a breach of the insider's fiduciary duty. ... Whether disclosure is a breach of duty therefore depends in large part on the purpose of the disclosure. ... Thus, the test is whether the insider personally will benefit, directly or indirectly, from his disclosure. Absent some personal gain, there has been no breach of duty to stockholders. And absent a breach by the insider, there is no derivative breach."

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Porn spam Easter egg of the day:

A spy with flatulence will always blow his cover.