Exposing the Surveillance State

The mixed reactions to the IRS and NSA surveillance scandals illustrate the astuteness of Richard Nixon’s remark that:

…to the average guy, whether the Republicans bugged the Democrats doesn’t mean a… thing. It means something to intellectuals…. But the average guy is chewing his pretzel. He’s interested in jobs. He’s interested in war and peace and defense and patriotism and that’s about it… [Sep. 8, 1972]

Illegal spying (using informants, wiretaps, bugs, mail opening, break-ins, tax investigations) has been routinely practiced by both political parties since the time of FDR. At first, this was usually done through the FBI, and such operations against political enemies and subversives were centralized under the COINTELPRO program from 1956 until its exposure in 1971.

Various abuses of power (Watergate, assassinations of foreign leaders, covert coups) led to the formation of the Church Committee, whose public reports (1975-76) exposed past crimes in order to promote legislation against future abuses.

To prevent continued abuse of surveillance powers by the FBI, CIA, IRS and NSA, Congress passed the Foreign Intelligence Surveillance Act (FISA) in 1978, which prohibited surveillance of Americans by the military, CIA and NSA, and required court approval for surveillance requests, under a system subject to congressional oversight.

From its inception, the Foreign Intelligence Surveillance Court (FISC) has operated in secret, approving 99.9% of surveillance requests. It is not a mere “rubber stamp” on that account; rather, the Department of Justice vets all applications so that only those known to meet a judge’s standards will be submitted.

There are two standards that FISA requests need to meet regarding privacy: (1) probable cause against the foreign national(s) who are the primary target of surveillance; and (2) relevance (a lower standard) of persons or communications lines to be monitored. The second standard is designed to minimize surveillance of innocent parties, while recognizing that this is sometimes practically necessary.

In the 1990s, the Bush and Clinton administrations adapted the Cold War era ECHELON signal intercept system to operate on newer Internet and satellite technologies. This global surveillance system was apparently used to spy even on private entities in friendly countries and to acquire industrial secrets. The existence and abuse of this system was documented in a European Parliament report in 2001.

Prior to the 9/11 attacks, the surveillance state was already expanding its domain. From 1996 to 2000, the number of FISA line attorneys increased from six or seven to 20-25, and the number of applications increased from 839 to 1005. Yet this was mild compared to the post-9/11 spike. In 2003, there were 1727 applications, and in 2005, there were 2074 requests, 2072 of which were approved. [See FISA annual reports]

Under the PATRIOT Act of 2001, the Bush administration claimed broad surveillance authority beyond what was authorized by FISA. From 2001 through 2006, the NSA conducted wiretapping operations without FISC approval on persons inside the U.S. They claimed presidential authority sufficed as long as one party to the conversation was a suspected foreign terrorist or associate. When it was revealed that even purely domestic calls were included in surveillance, public pressure resulted in an amendment to FISA so that this “terrorist surveillance program” would require FISC approval when monitoring U.S. nationals.

Ironically, the amendment to FISA made possible the recently leaked PRISM program, which allows the NSA to access user data from major Internet companies.

The latest NSA scandal does not involve bypassing the FISA court. Nor is there a Fourth Amendment violation, since the Supreme Court ruled in Smith v. Maryland (1979) that telephone register data is not constitutionally protected. Rather, the vast number of lines monitored – all Verizon customers – suggests that the statutory FISA relevance standard has been practically obliterated.

Indeed, James Baker, Bush’s DOJ point man for FISA applications, said in 2007 regarding the warrantless wiretapping: “We had five years of building up the law before the FISA court, building up precedents, getting to where we needed to be to be able to file this application, have the court consider it and then have them approve it.” This suggests that there has been an evolution in what the judges have been willing to approve, gradually expanding what is permitted to the executive branch.

What is being monitored? First, if you are not a U.S. citizen or permanent resident, the U.S. government claims the right to spy on you with impunity. The U.S. government does not recognize privacy as a natural human right, only as an American legal right. This is contrary to the Founders’ understanding of the Bill of Rights, which was a recognition of rights already held by the people, not granted to them by the state. Instead of enlightened cosmopolitanism, we have regressed to nationalist tribalism.

Second, although the FISA request in question concerns only “metadata” (i.e., who called whom when), the “incidental” collection and viewing of content can be conducted on the authority of an analyst under section 702 of the FISA Amendments Act (FAA). Indeed, public denials that our communications are read may be only technically true. Every phone call, e-mail, and other electronic message can be stored without necessarily being read by a human. NSA whistleblowers claim that the agency collects records on all domestic phone calls, and that they may even read or listen to the content of domestic communications on the authority of an analyst alone. [A summary of past and current surveillance programs can be found in a recent Washington Post article.]

Under the 1994 law known as CALEA, all U.S. phone companies were required to make their networks facilitate wiretapping, changing the hardware at their own (and their customers’) expense. This requirement has been expanded to VoIP and broadband communications. All U.S. electronic communications are required to be accessible to the government. For foreign communications, the NSA hacks into backbone Internet architecture, since no veneer of legality is required to spy on foreigners.

The sheer capacity of the NSA’s Utah Data Center, over 1 septillion bytes, implies that far more than metadata is being stored. There are 3 billion calls per day made in the U.S., and 12.4 billion globally. There are 30 billion e-mails per day globally (excluding spam and viruses). If we generously allow 1 kilobyte of metadata per communication (100 bytes would be more reasonable), then the Utah Data Center already has a billion times more capacity than needed to log every call in the U.S. for the past seven years, or 100 million times more than needed to track every call and e-mail in the world. Yet the government is expanding the facility, adding greatly to its capacity. Clearly, content is being stored, and since the average phone call has about 200 kilobytes of audio (e-mails are even smaller), the facility is capable of comfortably storing every phone call and e-mail worldwide from the past seven years.

How should one respond? First, give the U.S. government zero trust on this matter, which is the fair price they should pay for secrecy. They have no qualms about lying or giving misleading, technically true statements, since they have rationalized their deception in the name of national security, which really means the security of their own power.

Second, assume that all electronic communications are monitored. You can try to avoid this by using encrypted e-mail, which prevents interception in transit, since RSA encryption is computationally unbreakable. Keep in mind, however, that hosting ISPs in the U.S. must be CALEA-compliant, so e-mail is vulnerable once stored on their servers. This vulnerability can be minimized by using foreign ISPs, self-hosting, or real-time downloading of e-mail off of servers. Naturally, the most sensitive data should be kept offline or at least backed up offline.

Another approach, per Martin Luther, is to “sin boldly.” That is, express subversive ideas openly and publicly, daring to be persecuted. The U.S. government’s corporate culture hates scandal and bad publicity, so it will hardly persecute a visible gadfly, as this will arouse accusations of tyranny.

On the other hand, we should not alter our behavior too much. The size of the “haystack” collected by the NSA is too gigantic to be terribly useful for Big Brother-like surveillance of all individuals. Your data is likely to remain unread. This may change in future years, as improved analytics along the lines of IBM’s Watson may make it feasible for vast sums of data to be scanned effectively by an electronic pseudo-mind. Until then, our best defense is the stupidity of the Empire. [See Mozilla’s petition to stop domestic spying.]

Sham Populism in an Imperial Presidency

The upcoming U.S. presidential election is a choice between two halves of the same establishment. To be sure, there are real differences in terms of specific economic policies and social issues, but these are all subordinated to a shared set of imperial goals. The unity of purpose in the establishment is best evidenced by the false populism of the Obama administration.

Although Obama masterfully portrayed himself in 2008 as an anti-establishment, non-mainstream candidate, even as someone who transcends politics, an examination of his subsequent decisions shows that he is just a standard establishment Democrat, in the mold of John Kerry. Much like Senator Kerry, he is part of the imperialist mainstream on geopolitical matters, and to the left only on so-called social issues. His economic policies are unremarkable boilerplate 1970s Keynesian statism, and seem progressive only to those who have lost memory of that era.

It was apparent that Obama was an establishment Democrat even before he took office. Shortly after being elected, he announced his intention to nominate Tim Geithner as Treasury Secretary, Robert Gates as Secretary of Defense, and Hillary Clinton as Secretary of State. Geithner, formerly head of the New York Fed, was a favorite of both parties to lead the bailout of the big banks. Gates was a holdover from the Bush administration, which supposedly had been bungling the wars in Iraq and Afghanistan. The choice of Clinton as Secretary of State effectively turned the Democratic primaries into a farce, since Obama had distinguished himself from Clinton primarily on foreign policy. Evidently, much of what was said on the campaign was pure politicking. Once elected, Obama fell in line with the establishment from which he had promised deliverance.

On the military and security front, where Obama had postured as an opponent of Bush’s militarism, he now pursued the same general policies as the Bush administration. Shortly after inauguration, Obama backed off his promise to withdraw all U.S. troops from Iraq in 16 months. Instead, he merely followed the timetable negotiated by Bush (in late 2008) to withdraw all troops by the end of 2011. In 2011, the Obama administration actually tried to keep 4000-5000 troops in Iraq as “trainers” to deter Iran beyond the end of the year, but Iraq refused and all troops were withdrawn. Yes, by the end, Obama was pushing for a longer stay in Iraq than what Bush had negotiated.

Meanwhile, Obama escalated the war in Afghanistan, and in 2011, pursued a war of choice against Libya. Unlike the war in Iraq, where the Bush administration at least presented some flimsy evidence that Iraq posed a threat to the U.S., the Obama administration attempted no such pretense. The administration simply demanded regime change as an ultimatum, without even pretending that Libya had threatened the U.S. They reversed the outcome of a civil war, under the cover of a UN-mandated humanitarian mission, following the modus operandi of Clintonian imperialism in the 1990s. Indeed, the Libya affair appeared to have been prompted by Clinton’s State Department, and long-term Clintonite Leon Panetta was soon moved from head of the CIA to Defense Secretary.

The pathetic attempts by Democrats to defend the Libya invasion only highlighted their renunciation of principle in favor of power. Yet how could it be otherwise, when the very symbol of liberal idealism proved to be just another politician?

Obama’s duplicity was further evidenced by domestic security issues. He reneged on his promise to stop holding prisoners in Guantanamo, supposedly because this was impracticable, yet now his administration is fighting to reduce prisoner-attorney contact below what was allowed by the Bush administration, and to make the issue of attorney access decided by military and intelligence agencies rather than the federal courts. This action shows that the continuation of detention at Guantanamo is not reluctant or coerced. This Obama is the real Obama, and the campaigner was just trying to win votes.

The much maligned TSA security theater implemented under the Bush administration was actually enhanced under Obama, with virtual strip searching of passengers. The same liberals who complained that the USA PATRIOT Act infringed on civil liberties now had to endure from one of their own a more egregious affront to our right against unreasonable search and seizure, even after the bogeyman of Bin Laden had been killed. Indeed, the TSA chief Joe Pistole gives the same asinine Bush-era “reasoning” that the fact we haven’t had another 9/11 is justification of current security measures. The U.S. has not become less of police state under Obama; if anything, it is more so.

Shall we look at economic matters? Apart from accepting the TARP bailout, which at least was vetted by Congress, Obama also countenanced the much more gratuitous handout by Geithner called TALF, which bypassed Congress altogether. In fact, we do not know exactly how much money Treasury has given away to various “too big to fail” entities. This in addition to the $1.2 trillion lent by the Fed in late 2008. Fed Chairman Ben Bernanke was nonetheless re-nominated by Obama. The recipients of this largesse have not been held to account, as banks still have nearly all the powers they had before the crisis, while the taxpayers have been left at a loss. Even the GM bailout, sometimes hailed as a success, left the taxpayers with stock valued less than purchase price.

Obama’s most substantive achievement, health insurance reform, also shows signs of the same institutional timidity that characterizes much of his administration. Originally, the President sought to reform healthcare, recognizing that much of the cost increase is driven by providers rather than insurers. This earned him ire for “blaming doctors,” so he subsequently restricted so-called “healthcare reform” to the issue of insurance. Later, he withdrew the so-called “public option” since it was easily vilified as “socialist,” though a more real problem was that it could not both pay for itself and cost less than private insurance. The liberal promise of something for nothing meets up with hard actuarial reality at some point. The watered down Obamacare offends no moneyed interest. Hospitals and pharmaceutical companies are delighted to have more guaranteed customers, and even insurance companies cannot be too displeased, since the same rules apply to all companies and they will not have unfair competition with a government option. If Obamacare increases the cost of insurance, this can be passed on to the consumer.

I make these observations not to persuade people to vote Republican, but rather to transcend partisan thinking. Too many worthy intellects are crippled by the belief that they must fly their flag on a certain mast only because the other side are bigger scoundrels. Worse, the partisans of one side will heap vitriol on those of the opposite allegiance, when in reality the leaders of both parties are working for the same entrenched interests. I will not hurl invective at my fellow slave because I like my master better than his. Instead, I will exhort him to stop choosing between masters.

Before judging Obama too harshly, we must recall that even the most principled person in public office will find that he must navigate through a labyrinth of vested institutional interests. Tampering with these interests can have unforeseen, possibly disastrous consequences on economics and society. While we may complain that our society is unjustly run for the interests of a few, we at the same time have a love of stability and predictability that prevents even our liberal-minded leaders from daring serious reform. How many “progressives” would be truly willing to risk their cushy lifestyle for the sake of their principles?

No Mandate, Only a Tax

Chief Justice John Roberts’ surprising decision to uphold the Affordable Care Act [PDF] is a refreshing reminder that court decisions are usually about the law, not political ideology. Journalists and the general public, lacking legal expertise, tend to interpret decisions in terms of politically favored outcomes, and impute similar motives to judges. In reality, judges tend to split along ideological lines not because they make politically informed decisions, but rather political ideology tends to align with jurisprudential approach. Still, most decisions are sincere interpretations of law according to coherent principles. Roberts’ decision is an exceptionally incisive treatment of the issues at hand.

Most strikingly, Roberts upheld the constitutionality of the Act while rejecting the application of the Commerce Clause to the so-called “individual mandate.” He plainly affirms: “The Federal Government does not have the power to order people to buy health insurance. Section 5000A would therefore be unconstitutional if read as a command.” The “mandate,” then, cannot be interpreted as a mandate. It is not illegal to refuse to buy health insurance, as there are no legal penalties save the requirement to pay slightly higher taxes. By rejecting a Commerce Clause argument, Roberts cuts off the possibility of future mischief by Congress attempting to regulate all activity and inactivity. Justice Scalia, in his dissent, gives a biting criticism of the opinion of Ginsburg et al., which would effectively abolish all limits on the scope of federal power. He pointedly notes the central fallacy of her instrumentalist philosophy, supposing that the Constitution enumerates problems to be solved, rather than powers of government.

Yet Roberts separates himself from the Court’s “conservative” wing – which in this instance includes the “moderate” Justice Kennedy – by allowing that the penalty imposed on the uninsured is effectively a tax, even though the law itself calls it a “penalty.” In Section III-B of his opinion, he cites precedent showing that the label applied to a fee or penalty does not control its constitutional status as a tax (though it does control the applicability of the Anti-Injunction Act, here ruled inapplicable). Further, he upholds the principle of judicial restraint by insisting that a law should not be overturned if there can be found a reasonable construction whereby it is constitutional. The construction that the mandate is a tax, though unintended by the legislature, is reasonable, and therefore the law may be upheld. This heuristic favors the functional effect of the law, rather than legislative intent or wording. Yet this interpretation does not oppose the intent of legislators, who would surely prefer that their law be held constitutional even if not on the same grounds. Roberts cites precedent showing that it is not necessary for Congress to specify the correct power it is using, as long as it is in fact using a constitutional power.

The interpretation that the “penalty” is a tax is reasonable, according to Roberts, for several reasons. There is no indication that a person may be prosecuted for failing to purchase insurance, so such omission is not a crime, in which case the additional tax is not a fine. The “penalty” is collected through ordinary income tax filing, and those who do not have to file do not pay anything. The penalty is small (only 2.5% of adjusted taxable income), in most cases much less than the cost of buying insurance, and can never exceed the cost of insurance. In fact, it is projected that 4 million will elect to pay this penalty rather than purchase insurance. Roberts also suggests that the absence of a scienter requirement proves that this is not a penalty for unlawful behavior, but Scalia rightfully skewers this notion. Nonetheless, the rest of the Chief Justice’s arguments hold.

Once it is admitted that the mandate is a tax, one need only show that it is a constitutionally allowable tax, and Chief Justice Roberts makes relatively easy work of this task. He cites numerous precedents of taxes designed to incentivize behavior, and notes that the specification of a determinate circumstance (having taxable income, yet lacking insurance) exempts this from being a capitation tax or “direct tax” in the sense of Article 1, Sec. 2. He further observes that omitting to do something does not exempt us from taxation. The proposed tax is not so high as to become unconstitutionally punitive.

The treatment of the “mandate” as a tax is by no means academic. As the Chief Justice notes:

Once we recognize that Congress may regulate a particular decision under the Commerce Clause, the Federal Government can bring its full weight to bear. Congress may simply command individuals to do as it directs. An individual who disobeys may be subjected to criminal sanctions.

With a tax, by contrast, the government has no coercive authority beyond “requiring an individual to pay money into the Federal Treasury.” There is no further penalty, and the government cannot coerce anyone to buy health insurance, any more than they can force smokers to quit.

The ruling in National Federation of Independent Business v. Sebelius places important limits on future attempts at government mandates, not only because the government is denied broad coercive power over private action or inaction, but also because any future “mandate” will be clearly perceived as a tax, and thus difficult to pass. The so-called “mandate” amounts to a regressive tax, being a flat 2.5% rate, with mandatory minimums, on taxable income. This tax will disproportionately impact the young and the middle class.

Ironically, the “individual mandate” was ruled constitutional in part because it is so weak. The cost is so low, and easily avoided, that there is reason to doubt the basic premise of Obamacare, namely that a shifting of the cost burden to the young and uninsured will make health care more affordable in general. If increased mandatory coverage is not matched by sufficient increases in enrollment, premiums will only go up, discouraging even more people from enrolling, and creating a vicious spiral. Already, in the early phases, premiums have risen more rapidly than previously, with larger co-payments. This is because shifting costs through health insurance reform does little to address the fundamental cost structure problems at the provider level. Hospitals, doctors, and pharmaceutical companies strongly support Obamacare for good reason, and it is not because they expect their revenue to decrease.

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Discussion of current events. Affiliated with Repository of Arcane Knowledge.