Forget protecting and serving; we’re all potential bad guys in the eyes of the law that looks to jail us, fine us, and seize our property for profit. Retired LAPD Deputy Chief of Police Stephen Downing told FoxNews Latino, “The federal government has turned policing into policing for profit.”
Cops are tracking down cash, rather than crime. Downing told Fox that departments now direct police assets to generate cash, instead of investigating murders and rapes. And there are plenty of abstruse laws to trip up even the most careful citizen. The American Bar Association task force reported that the body of federal criminal law is “so large… that there is no conveniently accessible, complete list of federal crimes.”
Columbia law professor John Coffee estimates the federal government has the criminal process at its disposal to enforce as many as 300,000 federal regulations. In his introduction to One Nation Under Arrest, Edwin Meese III writes, “It is only a slight exaggeration to say that potentially everything you do each day is subject to criminal law: driving, shopping, gardening, and even, yes, eating.”
In an interview with the Wall Street Journal, James L. Buckley, one of the very few men to have served in all three branches of government, noted that the US Code, the entire body of federal statutory law, has gone from one volume before the New Deal to 33 or 34 volumes by the 2012 edition, which is still being printed.
But that’s only the tip of the regulatory iceberg. “There are now 235 volumes of regulations that occupy…17 feet of shelf space of six-point or seven-point type,” says Buckley. He points out, “You can find yourself in jail for violating a statute you would never have any reason to know existed.”
The slide into the morass of incomprehensible rules began with the Supreme Court ruling multiple times that convictions need not be supported by criminal intent or a guilty mind. Clueless Americans can now be fined and jailed for activities they have no idea are unlawful, and eager regulators are quick to entrap honest people to achieve goals set to justify government’s existence.
Take for instance the Financial Industry Regulatory Authority, or FINRA®, which has a target on small stock brokerage firms. At FreedomFest in Las Vegas a few weeks ago, I spoke with two brokers who complained about the FINRA cops. One who owns his own firm but is being forced to leave the business, because FINRA’s proposed fine for ticky-tacky paperwork irregularities is more than what his firm is worth.
Another gentlemen who works for a larger firm told me FINRA regulators do not respond to complaints as much as creating complaints to respond to. He related stories of regulators cold calling brokerage clients, who get rattled when a government gumshoe grills them over the phone.
Eventually the customer gives the regulator enough of a reason to pursue the customer’s firm, and the next day, FINRA storms in, announces that a complaint has been filed, and demands reams of paperwork. When the broker reasonably asks, “Who complained? Let me take care of it.” The FINRA cops refuse to tell him and begin their investigation in search of assessing a fat fine.
“I’ve been fighting with FINRA for years. In some ways it’s like an organized crime group,” said John Busacca, founder of the Securities Industry Professional Association, told the New York Post. “It’s like paying protection money in Bensonhurst.”
Busacca believes large firms get a pass from FINRA, while FINRA focuses on harassing small firms.
The Post’s John Crudele points out that a couple years ago, there were more than 6,000 small independent brokerage firms. Now the number is around 4,100, “and there’s been a big drop-off in just the last few months.”
Of course, FINRA claims it “regulates all firms equally, regardless of size, and investigates problematic conduct where it is found.” But an owner of an independent broker told the Post, “It’s the old story. The big guys get to skate. To look tough, [FINRA] beats up the little guy.”
That broker didn’t want to be named, because he’s been harassed by FINRA for months already, has been made to comply with regulations outside of FINRA’s authority, and doesn’t want to be targeted for more punishment. He’s heard similar stories from other firms his size. “He believes it’s either a vendetta against small firms, or just plain ignorance of the rules on the part of FINRA representatives,” writes Crudele.
FINRA’s heavy-handedness has a lot to do with the agency’s attempt to seize oversight of America’s investment advisors from the Securities and Exchange Commission (SEC).
What’s telling, in the words of Mark Eizweig, writing for Investment News, is that “this regulator eats what it kills.” These fines are what keep the agency in business, as “the number of disciplinary actions has been rising at a rapid clip, up 43% from 2008, to 1,535 in 2013.” Eizweig explains, “FINRA thereby has an incentive to pile on one rule after another, because each new regulation is a kind of regulatory tripwire that affords FINRA more opportunity to ring the cash register.”
“It’s no wonder that FINRA is regarded less as a consultative partner in helping broker-dealers adopt policies and procedures to protect investors, and more as an aggressive bounty hunter with an agenda to levy fines,” writes Eizweig.
Without big legal departments to withstand FINRA assaults, small broker-dealers are throwing in the towel. How many small firms can spend $55,000 in filing fees, creating 50,000 PDFs to comply with FINRA’s advertising rules?
FINRA is not interested in allowing customers to take investment risk for reward, or keeping up with economic cycles or trends. The agency claims its agenda is to “protect customers,” whether they need or want protection or not. FINRA’s agenda is a protection racket generating funds to feed FINRA employees and their families.
If this all sounds outrageous, FINRA is only a small part of a growing trend. For instance, don’t drive through Tennessee with lots of cash. A routine traffic stop can turn into highway robbery. A New Jersey insurance adjuster was carrying $22,000 with him to make an auto purchase when he was stopped for speeding by Officer Larry Bates.
Officer Bates seized the 22 grand, figuring anyone passing through the state with that much cash is up to no good. The local news channel pointed out to Officer Bates that he had no proof the cash was being used for no good. But Bates countered with, “And he couldn’t prove it was legitimate.”
The New Jersey man, George Reby, was not arrested, but his cash was. “No, it’s not illegal to carry cash,” Bates said. “Again, it’s what the cash is being used for to facilitate or what it is being utilized for.”
It took Reby four months to get his money back, in the form of a check, even with the help of TV coverage.
Civil forfeiture turns the bedrock principle that Americans are innocent until proven guilty on its head. As the Institute for Justice (IJ) points out in its report Policing for Profit, “With civil forfeiture, your property is guilty until you prove it innocent.”
So while law enforcement personnel are climbing the ladder to bureaucratic success by taking people’s property, the IJ found that 80% of persons whose property was seized were never charged with a crime. There are only eight states that bar the use of forfeiture proceeds by law enforcement, while in 26 states, 100% of forfeiture proceeds are distributed to law enforcement.
Speaking in Orwellian tones like “protecting the public” and “making you safe,” law enforcement and regulators are, in reality, stealing from the citizenry in broad daylight, with much of the booboisie cheering it on, believing they’re made safer by this thuggery.
For those wondering why there’s been no “recover” in this recovery, it is this overcriminalization that keeps people from starting businesses and creating jobs, fearing they could unwittingly end up behind bars or financially ruined by their or their employees’ seemingly innocent actions.