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Archives for May 2013

Whistleblowers Risking It All in Defiance of the Security State

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whistleblowers are under attack

By Dave Wheelock
May 28, 2013

“If liberty means anything at all, it means the right to tell people what they do not want to hear.”  -George Orwell

There has been a steady stream of so-called whistleblowers since 1863, when the United States False Claims Act was enacted to protect the public interest from fraud by corporate government contractors during the Civil War. The sports-oriented term “whistleblower” was coined in the 1970s by civic activist Ralph Nader, expressly to combat the negative connotations terms like “informer” or “snitch” lend to those who won’t go with the flow of corruption. Today, few conscious citizens would argue against the need for whistleblowers, and the need to protect them from the many forms of reprisals that often come their way.

Barack Obama’s election in 2008 gave hope of reform from the dark days of the Bush II presidency, when W threatened to veto enhanced whistleblower legislation due to, you guessed it, “concerns for national security.” And indeed Obama came in talking a good game: “Often the best source of information about waste, fraud, and abuse in government is an existing government employee committed to public integrity and willing to speak out,” the president-elect cooed to his base. “Such acts of courage and patriotism, which can sometimes save lives and often save taxpayer dollars, should be encouraged rather than stifled.”

Ironically, Obama has instead attained notoriety through a heightened rate of whistleblower persecution. According to the April 15, 2013 edition of The Nation magazine, “Since 2009, it (the Obama administration) has employed the World War One-era Espionage Act a record six times to prosecute government officials suspected of leaking classified information.” Oops, make that seven, with the charges filed in April against Navy linguist James Hitselberger. That is more than twice the total number of Espionage Act indictments filed under all other presidents combined. Especially troubling is that these charges – carrying “enemy of the state” consequences of decades in prison – have been brought not against dangerous spies as the Act originally intended, but against government employees for disclosing official misdeeds to journalists. Not only are the messengers being shot but also journalists responsible for relaying vital information about wrongdoing to the public are being effectively iced as their sources fearfully dry up.

In the war on whistleblowers, we end up living in ignorance of what our government does overseas (in our names) or domestically (with our names). Since the attacks of 9/11 and the invasion of Iraq, a veil of secrecy has fallen over the “defense” needs of the country, including: steadily increased drone attacks; targeted killings at presidential whim; indefinite detentions and torture; the developing field of cyber-warfare, and warrantless wiretapping. Lest we forget, more than ten years into the War on Terror, we citizens still have no idea to what extent our government spies on us.

In Bluffdale, Utah – a town the size of Socorro, New Mexico – the National Security Agency, responsible for the collection and analysis of foreign communications, is now building the one million square-foot Utah Data Center. According to James Bamford, who published his first of five books about the NSA in 1982, the data center will be able to eavesdrop on “all forms of communication, including the complete contents of private emails, cell phone calls, and Internet searches, as well as all sorts of personal data trails—parking receipts, travel itineraries, bookstore purchases, and other digital ‘pocket litter’.” But the exact mission of the Utah Data Center remains secret. (Bamford has been threatened with prosecution for writing about the National Security Administration.)

Today former high-ranking NSA officials Kirk Wiebe, William Binney, Ed Loomis, and Thomas A. Drake, are sounding the alarm about a rogue national security state operating at wasteful expense and without effective oversight. The so-called NSA Four are all victims of years of government harassment designed to punish them for reporting massive waste and citizen privacy issues connected to a subsequently aborted intelligence gathering program called Trailblazer. In 2010 Drake became an Espionage Act defendant and in 2011 he was cleared of those charges, with the judge calling his prosecution “unconscionable.” What is also unconscionable is that after all the harassment whistleblowers have suffered at the hands of the Justice Department, the real perpetrators – of fraud, corruption, waste, and probable violations of Fourth Amendment privacy rights – skip away scot free.

We are becoming, or have become, the kind of society we Americans used to scoff at – in which the government knows everything about the people’s activities but the people know nothing about those of the government. Since the National Security Agency insists on absolute secrecy, starting with who gets to decide what’s secret, we the people need to educate ourselves. The Government Accountability Project has been instrumental in advising and providing legal defense for whistleblowers. The GAP website offers information on whistleblower protection and on a new film by Robert Greenwald entitled War On Whistleblowers: Free Speech and the Security State.

Dave Wheelock is a member of the Oneida Nation who coaches rugby and directs collegiate sports at the New Mexico Institute of Mining and Technology. Contact him at davewheelock@yahoo.com.

image courtesy jhmostyn

On Sales Tax, Amazon Wins Even When it Loses

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Jeff Bezos, with a knowing look

By Jacob Weisberg
First published in Slate

Amazon has built its empire on the legitimate advantages it has over retail shopping: an endless range of products at steep discount, personalized recommendations, and stunningly good customer service. It has also benefited from one enormously unfair advantage over its bricks-and-mortar competitors: It doesn’t have to charge sales tax. Depending on where you live in the United States, this can save you nearly 10 percent on purchases—making it foolish not to buy online when you have the choice.

Twenty years after Amazon was founded, Congress is finally addressing this loophole with a bill that would allow states to require e-tailers to collect tax. What’s interesting about this is not the substantive debate around the Marketplace Fairness Act of 2013, which is expected to pass the Senate next week. There really isn’t any: Even Amazon concedes in principle that the playing field ought to be leveled. What’s interesting is what the delay tells us about a political system so compromised and sclerotic that it can’t correct even the most straightforward economic unfairness in a timely fashion.

Cyberbusinesses have been able to avoid collecting sales tax based on state laws dating from the era when shopping locally was the norm. Companies without a “physical presence” in a state didn’t have to charge tax if they shipped goods from elsewhere. Instead, it was up to customers to pay equivalent “use taxes” on their purchases. In practice, few customers have ever been scrupulous enough to do so, giving the lie to the commonplace that the American tax system, unlike that of Greece, works on the basis of “voluntary compliance.” In the case of sales taxes, states have no mechanism to track dodgers, so no one pays.

As its business expanded, Amazon’s CEO Jeff Bezos treated this anomaly as an inherited right and deployed the classic techniques of rent-seeking to protect his advantage. He spent millions of dollars per year on lobbyists, deployed an army of lawyers, and cultivated political allies with large campaign contributions. Diffuse and vulnerable, the mom-and-pop shops disrupted by Amazon lacked the capacity to make their case effectively. Nor was there any customer constituency for tax collection, even though the same consumers paid indirectly through diminished public services.

At the state level, Amazon became a litigious bully, an instance of the modern corporation powerful enough to dictate terms to impoverished sovereigns. When challenged over the collection of taxes, it warned that it could take thousands of jobs elsewhere. As California teetered near bankruptcy a few years ago, Amazon cut ties with local affiliates and threatened to fund a public referendum to overturn the legislature’s decision to make it pay tax. Its strategy devolved into simply delaying the inevitable for as long as possible. When a state looked likely to win in court, Amazon would negotiate and agree to collect taxes, provided that it didn’t have to start for a few more years.

In this cynical game, Amazon has been able to count on the connivance of congressional Republicans who stand for the proposition that representation without taxation is liberty. A principled conservative believes that taxes should be low, consistent, and fair. An American Republican, by contrast, acts out of the belief that both taxation and the effective collection of revenues are government abuses. This ideology is codified in the anti-tax pledge most of the GOP has signed for the libertarian commissar Grover Norquist, whose organization Americans for Tax Reform leads the opposition to taxing e-purchases.

This anti-tax ideology grabs for any argument at hand. In the old days, it was that taxing e-commerce would kill the just-aborning Golden Goose of the Internet. More paranoid elements on the right suggest that allowing states to collect sales taxes was a step on the road to a national value-added tax. Others assert that compliance counts as too much of a burden on small business, which could be victimized by endless state-level tax audits. In fact, proposed legislation has always envisioned an exception for merchants who sell less than $1 million a year in goods. In the past, Amazon’s lobbyists have worked to make the proposed threshold lower, in order to give validity to the argument that compliance would be a burden.

What has now changed? Essentially, Amazon has become so dominant that it no longer cares to fight, leaving its worn-out briefs to eBay and Overstock.com. It has played out the clock longer than it dared hope and would now like to be able to build warehouses everywhere without doing state-by-state battle over its “physical presence.” In other words, this is not a case of Congress finally choosing to act. It’s a case of the owners finally giving it permission to do so.

A different version of this piece appears in the Financial Times.

For more, see the American Independent Business Alliance’s comprehensive resource on state sales tax and internet exemption reform.

image courtesy jurvetson