Wednesday, July 31, 2002

Oh yes, our President is hot on the heels of those corporations! Yes he is! Sure he is! Nathan Newman calls our attention to the fact that, on the very day he signed the corporate reform law, the President has taken steps to weaken it. Here's the Statement by the President, and here's a Reuters article about it.

The text at issue is section 806 of the new law, which is in pdf format here. President Bush's judicial hero Justice Scalia, lover of "plain language," could no doubt explain that the President's interpretation is just plain WRONG. The President says that whistleblowers are only protected, when they give information about corporate fraud to members of Congress, if there is already an official congressional investigation going on. In addition to being silly -- the point of whisteblower laws is to provide information to GET investigations going -- the plain text of this law shows otherwise:

No company with a class of securities registered under section 12 of the Securities Exchange Act of 1934 (15 U.S.C. 78l), or that is required to file reports under section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78o(d)), or any officer, employee, contractor, subcontractor, or agent of such company, may discharge, demote, suspend, threaten, harass, or in any other manner discriminate against an employee in the terms and conditions of employment because of any lawful act done by the employee --

`(1) to provide information, cause information to be provided, or otherwise assist in an investigation regarding any conduct which the employee reasonably believes constitutes a violation of section 1341, 1343, 1344, or 1348, any rule or regulation of the Securities and Exchange Commission, or any provision of Federal law relating to fraud against shareholders, when the information or assistance is provided to or the investigation is conducted by--

`(A) a Federal regulatory or law enforcement agency;

`(B) any Member of Congress or any committee of Congress; or

`(C) a person with supervisory authority over the employee ...

The President's implicit argument -- that "in an investigation" modifies "provide information" as well as "assist" -- is a linguistic stretch to say the least. That phrase "in an investigation" quite obviously modifies only the word "assist", which is the only one of the three activities ("provide information, cause information to be provided, or assist") that needs further words of explanation ("assist what?"). Moreover, look at the last clause before subparagraph (A), which further separates "provid[ing] information" from assisting in an "investigation."

Note also that the President's argument would apply equally well to the giving of information, by whistleblowers, to federal agencies; on this theory, if you're the FIRST person to tip off the SEC, you're hosed because the SEC wouldn't already have an investigation going on. It would also apply, equally well, to interal whistleblowing; if you're the FIRST person to tell your boss, then you're hosed because the company doesn't already have an internal investigation going on. And that's absurd, both linguistically and as a matter of congressional intent. Justice Scalia wouldn't buy the President's argument, at least if the President were Clinton; and we shouldn't either.

Quite impressive to gut a law on the very day you sign it with fanfare and credit-mongering.

posted by sam 11:46 AM 0 comments

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