Act Now to Fix the Electoral College

February, 2021

Washington – It's surprising to me that so little attention is being paid to prospects for fixing how we elect presidents.  There's sufficient time before 2024 for more states to join the National Popular Vote Interstate Compact, which would repair the ailing electoral college without the need for a Constitutional amendment.  

In 2020, the electoral college narrowly escaped being bypassed entirely, in favor of presidential selection by the Congress.  Its creaky vulnerabilities were exposed to those who might be more successful in subverting the presidential election in 2024.  

Under the compact, when member states represent more than 270 electoral votes in total, all would agree to cast their electoral votes for the winner of the popular election.  No more allowing corruption or violence in one or two states to upset the whole process for everyone.  And then everyone's vote would count the same.  

Currently, compact members represent 196 electoral votes, requiring an additional 74 to put the compact into effect.  

Which states might join to bring the total to 270?  There are two groups with compelling reasons they should want to join.

Battleground States.  States that in recent elections have been under threat of election-inspired violence should join the compact so as to reduce incentives to lawlessness.  This would include Pennsylvania, Michigan, Wisconsin, and Minnesota.  Adding contested states Nevada or Maine would put the compact into effect.  All of these states have Democratic governors.  

States Most Vulnerable to Climate Change.  States that are particularly at risk from climate change should want to diminish the disproportionate influence wielded by states with voters who minimize the threat.  Those vulnerable would be coastal states Florida, Texas, and Georgia, which together could put the compact into effect.  Although now led by Republican governors, recent climate-influenced events such as the disaster in Texas should make all elected officials reflect on how their large, vulnerable populations are losing out in the current electoral system.  North Carolina and Virginia could also be considered at high climate change risk, as well as battleground states.  Both are led by Democratic governors. 

There is a third consideration: single-issue, anti-abortion voters, who are overrepresented in smaller population states and wield a disproportionate influence in current electoral college voting.  In all the battleground states mentioned above, public opinion polls show a plurality of voters in favor of the pro-choice position.  This gives these states another reason to join the compact, to give equal voice to their voters and thereby help defuse attempts to divide the country over single-issue matters.  

Given all of the above converging interests, there should be more attention devoted to adding a few more states to the compact.  Or will this lead to yet another of those moments when we wish we had acted when we had the chance?    

"Rural Rebellion" and Big Jim Exon

February, 2021

Lincoln –  As good as Ross Benes's new book Rural Rebellion is — and believe me, it is good — there are a few references to the legendary Governor and Senator Jim Exon that could use additional context so no one comes away with misconceptions.  Overall, the book gets Jim Exon right; the following are notations for those who want as complete a record as possible, and for me to engage in a little speculation about what Jim Exon might think if he were alive today.* 

Yes, Governor Jim Exon was prolific in his vetoes of state legislators' bills, but it had little or nothing to do with partisanship.  Any comparison of the Exon record to how Governor Pete Ricketts politicizes his approach to the non-partisan unicameral, as offered by political scientists in the book's chapter on state government, misses the mark.  No better example illustrates Exon's thinking than his veto of a bill from state senator John Cavanaugh, a Democrat who would later go on to serve Nebraska with Exon in Washington.  As U.S. Senator Tom Harkin said of Jim Exon in his eulogy, "he took on Republicans and Democrats alike who, in his eyes, were being reckless with the taxpayer’s dollar."  Exon's record is inapposite to that of Ricketts', for whom politics is everything, even intra-party politics.   

Also on the subject of fiscal management, one contributor to the book offered the thought that no one who raises taxes can be re-elected.  That's a dangerous over-generalization, which if taken literally could lead to irresponsible outcomes.  During Governor Exon's second term, the state sales tax increased from 3% to 3.5%, but then returned to 3% in 1978, the year Exon was elected to the U.S. Senate.  Exon explained the increase as a temporary one, albeit to considerable ridicule from those who said that once the rate went up, it would never come down.  But Exon's credibility as a fiscally responsible governor won the day, if his subsequent election to the Senate is any indication.  

The discussion of the University of Nebraska Regents' lawsuit against Governor Exon also needs more context.  When the Regents filed their action in court, NU president Woody Varner called Jim Exon and explained that the lawsuit was not intended to be against him, but against the state legislature for its attempt to earmark university appropriations.  Varner said that according to university legal counsel, the legislature could not be sued so the only way to get Nebraska courts to engage the issue was to sue the executive branch, which administered the legislature's earmarks.  Exon pushed back, telling Varner that few would ever understand such a convolution, let alone remember it, and that it would all go down in history as a dispute between himself and the university.  

And so it has.  Ironically, Exon and the regents were on the same side of the issue, as Exon favored a lump-sum appropriation for the university with no earmarks.  

The book's assertion that Jim Exon, recognized as he was as a national figure, "would be loathed by today's Democrats" for his position on abortion, goes too far.  The word loath may be justified if the point is to accentuate the gap between today's national Democrats and those who, like Exon, once sought compromise positions on abortion, but it is the wrong one if readers are led by such language to think that Exon himself was of a piece with today's anti-abortion movement.  

Exon's position approved of abortions in cases of rape, incest, and life of the mother.  Occasionally he used the expression "health of the mother" but abandoned it when that wording became associated with a virtually limitless application.  Exon was Episcopalian; his position was similar to that of his church, which also struggled with how exactly to express a middle ground on abortion.  Notably, Jim Exon was never afraid to take a position that did not satisfy either side of an issue.  

What especially bothered Jim Exon about the abortion argument was its potential for tearing his party and his country apart.  He pleaded with national party leaders to leave room for compromise and space for Democratic candidates to find positions on abortion that did not doom them to defeat.  He failed.  The man who from his position on the Senate Budget Committee helped deliver to the country a balanced budget, could not make a dent in the politics of abortion. 

If he and I were to have a conversation today about all this (he passed away in 2005), I would offer that the way to repair the political damage the abortion issue has inflicted is to reform our election processes.  If a few more states sign on to an interstate compact so as to elect presidents by popular vote, the politics of abortion will lose their salience.  The same goes for other reforms, such as open primaries, rank-order voting, and non-partisan redistricting commissions.  The charge for these reforms could well be led by the environmental movement, which has every reason to see its battles — and survival of our planet — won or lost in an oblique struggle against single-issue abortion politics.  I think Jim Exon might see it the same way.  

To be sure, the above comments are not meant to detract from the importance of Rural Rebellion, but to put even sharper focus on the issues they raise.  I can't say enough good about the book.  Every page is full of insights.  

_______________________

* My association with Jim Exon in both Lincoln and Washington is described in Pallesen and Van Pelt, Big Jim Exon (2012).  

        

  

      

"Rural Rebellion" Review

 February, 2021

Lincoln and Washington – Whoa.  Ross Benes of Brainard, Nebraska, of the proud Czech immigrant families who settled in Nebraska's Bohemian Alps, son of parents who run Ron's Plumbing and Heating, hardly into his thirties, has written a book on Nebraska politics so compelling and full of wisdom it has lessons for the entire nation.    

Although some will read Rural Rebellion as a bildungsroman of a young conservative activist transitioning into a mature and more forbearing adult, that is only part of it.  Others will read the book as the jarring experience of a person who must interpret between two different cultures, Brainard and New York City, where Benes now lives.  But that's not the essence of it either, as thousands of us with deep roots in both the rural heartland and in big coastal cities do it all the time.

Rather, the greatest value of the book rests in its raw exposure of the myopia of both regions and both political parties.  Benes is brutal in his truth-telling, born of his own pain and the conclusions he draws from his experiences.

He organizes his work for maximum effect, with a chapter first on the Catholic church and the politics of abortion, followed by chapters on immigration, health care, the state unicameral legislature, the state university, the ineptitude of the Democratic party, and his concluding recommendations.  

It is his first chapter that is most powerful, about his disaffection with the church.  It casts a long shadow over the subsequent chapters, for good reason: the crass manipulation of the abortion issue by Republicans has poisoned much in all political life.  Benes barely touches on other religious influences on politics, such as the once dominant, progressive Social Gospel movement of W. J. Bryan, founder of the modern Democratic Party, and its vision for improving the lives of the common classes through responsive government.  That tradition has disappeared, almost as if it never happened, replaced by single-issue politics.  

Throughout the book, Benes illustrates his points with well-chosen anecdotes.  What seem like elections of only local interest, such as the contest for Omaha mayor between Jean Stothert and Heath Mello, have state and national implications.  Democrat Mello, an excellent candidate, could have won, were it not for incredible bungling by the Democratic party's campaign strategy.  Yet no one has learned much from it in the years since.

Benes shows no mercy toward Governor Pete Ricketts and his attempt to undo the supreme achievement of Nebraska government, the non-partisan unicameral legislature of George Norris.  He reveals the current governor to be all about money, power, and retribution.  He extolls former Democratic governors like Jim Exon, Bob Kerrey, and Ben Nelson for their ability to reach across party lines, although his Exon examples unfortunately are somewhat out of focus and will need further analysis so as to sharpen them.  But that is for another time.

If Rural Rebellion has a weak chapter, it is the one on the University of Nebraska.  Benes focuses too much on the constant quarreling about the actions of a few faculty and graduate students on the left.  The governance, administration, and a large slice of the faculty of the institution are profoundly of the right, and it shows throughout the state's politics.  Why are towns like Brainard struggling to survive and why is rural Nebraska losing population?  Would it have anything to do with food and agriculture policy, which has been set by conservative interests for decades?  The shorthand admonition to generations of farmers has been to get-big-or-get-out.  The university creates monuments to those who abetted rural depopulation, but the political uproar of recent years at the institution is all about a campus sidewalk argument.  Dwelling on it only serves to miss the larger role of the university.

Rural Rebellion rebounds as Benes looks critically at national political leadership, especially from U.S. Senate Democratic leader Chuck Schumer.  Schumer in 2016 insisted that for every working-class voter Democrats lost in places like Brainard, they would pick up two in the suburbs.  Schumer of all people should know that only control of the House, not the Senate or the presidency, rests with the popular vote.  That miscalculation cost Democrats dearly in 2016, 2018, and made 2020 a nail-biter in all three centers of power.  Neglect of the rural heartland by national Democrats has led to near disaster for our very democracy.  Benes's book went to press before the January 6th insurrection, but it is in the spirit of his analysis to ask why the fist-saluting, insurrectionist supporter Senator Josh Hawley was elected in Missouri over Senator Claire McCaskill in 2018, and why Senators Heidi Heitkamp and Joe Donnelly from rural states also lost that year.  Was it because Chuck Schumer and others in the Democratic leadership wrote off rural America by deciding, as they did, not to offer a Democratic vision for the 2018 Farm Bill?  It certainly didn't help. 

The book has a satisfying conclusion.  Benes offers good remedies for our broken politics, like open primaries and rank-order voting.  He also shares recent personal conversations from Brainard.  Spoiler alert:  be ready for a happy ending.   

Ross Benes will inevitably be compared to Thomas Frank, who writes cogently on similar themes.  Benes has a better feel for the people he is writing about, because he is one of them.  Or perhaps I should say one of us, as my Nebraska home is just a county away down the Oak Creek Valley from Brainard.  If our country is to emerge more united than it has been in recent years, it will be on strength of books like Rural Rebellion.    

 

Bad Start for Biden at DOJ

February, 2021

Washington –  The Biden administration is off to a rocky start at the Department of Justice if last week's eyebrow-raising move by acting assistant attorney general Brian Boynton is any indication of things to come.  

The newly-appointed official acted to protect former Secretary of Education Betsy DeVos from being held accountable for denying defrauded student-loan borrowers their rights under law, joining DeVos's personal counsel in a federal court filing to prevent DeVos from having to give a deposition in a case brought by the victims of multiple cases of fraud, as perpetrated by for-profit colleges.  

Even if he felt there was somehow an institutional DOJ responsibility to object to cabinet secretaries being deposed (and that is a stretch, because the deposition was not sought until after DeVos resigned, and a federal district judge had cleared it), the vehemence in the filing is startling.  It is directed at the defrauded borrowers' counsel, the Project on Predatory Student Lending at the Harvard Law School, which has long been respected for being one of the few places to which victims can turn to protect their rights under law.  PPSL has a remarkable record of success in federal court on behalf of those whose lives are being ruined by predatory lending.

There is little doubt that DeVos herself was responsible for blocking justice for tens of thousands of defrauded borrowers, just as she was responsible for blocking collection of millions of dollars of false claims owed back to taxpayers from a large student-loan lender.  Days after she resigned last month, the Department of Education finally, and rightly, collected from the lender.   

I hope I am wrong about this, but the action by Boynton, who will head DOJ's Civil Division, appears to be a warning shot across the bow from the for-profit college industry, which overlaps with the student loan lender/servicer industry, announcing that the revolving door between government and industry still turns, despite the November elections.  Government offices captured by industry over the past two decades will not easily be given up.  Boynton has a substantial record of working for these industries, both inside and outside government.  

Would a recusal in his case be appropriate?  Surely it would be, on the merits or on appearances, or both.  But there is a long history of non-recusals and recusal violations when it comes to for-profit colleges and the lender/servicer industry.  

My own experience with DOJ over many years has had its ups and downs, often intertwined with recusal issues.  DOJ took two years to decide against joining my litigation against nine student-loan lenders in 2007 for false claims, rather than the two months prescribed.  I believe anyone who ever looked at the evidence would be surprised if not astonished that DOJ did not take over the suit itself at some point, so as seek sanctions against the perpetrators.  Failures of recusal were central to those cases, as the industry had its former officials in key Department of Education positions during the years of false claims.*  

However, DOJ was helpful twice in filing memoranda with federal courts to dispute the perpetrators' defense, which led to several settlements, although there were no convictions for wrongdoing.  Likewise, the Solicitor General's office at DOJ was helpful in advising the Supreme Court, which asked its opinion, not to accept a lender's writ of certiorari to overturn a loss of sovereign immunity, incurred in my litigation, from borrowers' and states' lawsuits.  

But coming on the heels of that decision in 2017, Betsy DeVos moved to create another way to block borrowers from seeking redress, a "preemption" doctrine claiming that the federal Higher Education Act preempts state consumer protection laws.  DOJ, in support of DeVos, filed briefs to aid the perpetrator's attempt to derail a state attorney general's lawsuit to protect aggrieved student-loan borrowers.  

This came at the time when I was still in court against the same party, trying to reach settlement on long-standing issues, with DOJ personnel present at lawyer-client discussions, because I was acting on behalf of the United States even though DOJ had not taken over the case.  DOJ never informed me that they were simultaneously assisting the opposing party on a related case, which seemed to me an ethical violation on top of all the damage it was doing to borrower victims' interests.  

Fortunately, the DOJ maneuvering against a state attorney general lost decisively at the state court level and several federal courts have since ruled against the DeVos preemption doctrine as well.  But the damage was done.  Only in the past few days has Massachusetts settled with the deficient servicer, PHEAA, to provide redress to up to 250,000 of its residents.  Other states cannot be far behind. 

Industry capture of federal offices through revolving door appointments and iron-triangle relationships is a longstanding problem.  At the Department of Education it is particularly acute.  Both the borrower defense issue now contested in the deposition controversy, and the preemption issue now being unravelled by the courts, are prime examples of policies developed and implemented by those whose first loyalty is to industry.  Recusals are one way of dealing with the problem, but only if they are enforced.  

A good question of Attorney General designate Merrick Garland at his confirmation hearing on February 22nd would be to ask if he is prepared to enforce recusals throughout the government, including at DOJ itself.    

 ________________________

* Investigative journalist Dan E. Moldea, in Money, Politics, and Corruption in U.S. Higher Education (2020), illustrated two obvious instances of conflicts of interest and recusal violations.  One involved an assistant secretary who passed along inside information to her former employer about upcoming audits; another showed how a top industry association official who became deputy secretary abetted the filing of false claims against taxpayers.  No action was ever taken against either.  It is not hard to draw a straight line from those individuals to the multiple student-loan imbroglios of today, continuing on into the future, unless the Biden administration is ready to scrub out this disgraceful legacy.  

Beautiful Legal Language

February, 2021

Washington –  Sometimes a sentence appears in an otherwise dry government ruling that is too good, even too humorous, not to single out and savor.  I don't know the actual author, but surely this line (highlighted below in full context), from a decision requiring a student loan lender to repay $22.3 million of false claims made against taxpayers, was written with a knowing smile:

"The analysis essential to Navient’s case is the language of the controlling statute and duly promulgated regulations. Policy guidance in the form of a DCL may be helpful in implementing new rules, but such guidance cannot conflict with laws established by Congress or regulations enacted through the rulemaking process....

"The sentence at issue [in the DCL] appears on page 13. Navient asserts that this sentence constitutes the Department’s new and binding interpretation of the law allowing the 9.5 percent floor to be billed on obligations funded partially with tax-exempt and partially with taxable funds. I am unpersuaded that the Department had any intention of hiding a new legal interpretation in a clause in the middle of an otherwise innocuous sentence on the thirteenth page of DCL 93-L161. I agree with FSA’s position and the administrative judge’s holding that DCL 93-L-161 did not and could not establish a binding legal position of the Department that conflicts with the existing statute and regulations.  (emphasis added)

Ya think?  

Yet on such bizarre findings of hidden meanings were taxpayers defrauded in the hundreds of millions of dollars fourteen years ago by several lenders. And it could have been in the billions.  

Lenders like SLFC, KHESLC, and PHEAA employed even more preposterous interpretations of DCLs to make false claims.  They once asserted, trying to keep straight faces, that a 1996 DCL's Q and A section, item 30, essentially overturned a 1993 act of Congress.  

If only someone in authority back in 2007 had said, with a felicitous turn of phrase, that they were "unpersuaded that the Department would hide language in item 30 of a Q and A subsection of a sub-regulatory DCL in order to overrule Congress."  But back then the Department was controlled by the lenders, so no one did.  

I recall being present at a deposition in which a lawyer representing lenders knew he'd be asked about such an interpretation.  At the outset, the lawyer said he was sick and under heavy medication, so his understanding of the questions to be put to him, let alone his answers, might not be totally reliable.  Another lawyer spoke during his deposition with a twinkle in his eye throughout: of course he believed what he was saying; he was even paid $5,000 for his opinion.*

Perhaps someone in the Biden Administration will take note.  It may be too late to undo what lenders got by with in the past, but it is not too late to investigate how it happened and to clean house of those aiding and abetting false claims in federal student loan programs.  There are many collaborators still around in the interest groups, in the law offices, in loan servicing companies, and in the Department. 

While it is good to recover $22.3 million, it will be even better if integrity and the rule of law are finally restored to the Department itself.  

_______________________________ 

* Interrogating lawyers, condescension dripping, asked why only $5000?  Any K Street firm would have charged at least $20,000 for an opinion that would bag millions for a client.   

Student Loan Surprise

February, 2021

Washington – For "man bites dog" stories, it's hard to top this one, coming from the student loan world:  Secretary of Education Betsy DeVos abruptly resigned whereupon her deputy secretary moved quickly, once she was gone, to recover an estimated $22.3 million from a lender that had filed false claims against federal taxpayers more than a decade ago, but never repaid despite an OIG audit. 

The action to recover was unexpected, to say the least, during the remaining days of the Trump Administration, which was expected to find a way to excuse the lender, as it had other such lenders over the years.  The action was reported quickly by Politico, the Washington Post, and the New York Times. 

The Washington Post gave readers context: "The Education Department’s decision stems from a scandal that signaled the beginning of the end of a system that enriched financial firms at the expense of taxpayers."  

That is doubtless true and it is good to see the decision framed that way.  The action also suggests that at least some people in the Department still care about the rule of law.  

Two observations:

1.   The lender reacted to the decision by claiming that it had been following the guidance of the Department all along: “We are disappointed with this statement as we believe these practices were in line with Department of Education guidelines, which were stated in a letter from the Department. The company and other industry participants asked for and relied on that letter to ensure that our billing practices for special charges were correct.”  

Translation:  other lenders got off, why not us?

But here is what the decision said with regard to that letter: "[A] Dear Colleague letter is a mechanism to provide guidance on existing laws and regulations, not to establish new rules. DCL FP-07-01 does not have the force or authority of a statute or regulation, it has no power to obviate the enforcement of such laws, and it does not establish a binding and enforceable contract between the Department and Navient to waive the liability established in the OIG Audit."  

I believe this is correct and it is good to see it coming from the Department after all these years.  May it foretell more such actions.*

2.  Although the action was reported in some of the nation's newspapers of record, it was not noted in the higher education trade press.  I was not surprised, as trade press reporting has been carrying ever-fewer articles on student loan scandals affecting borrowers and taxpayers.  Perhaps it is because they are so common, but it may also reflect disinterest in the subject by administrators and faculty at higher education institutions, who are eager to see students and parents borrow but care little about what happens thereafter.  

It may also reflect the fact that the trade press pays its bills with advertising revenue from the student loan industry, which does not like to see articles of this kind.  One advantage of having been a litigant on these issues is that I have seen, in the products of legal discovery, many documents that show heavy-handed blowback when the trade press publishes unfavorable investigative works.  Hence the growing tendency in the trade press to publish articles about low-stakes disputes in America's faculty lounges rather than explaining high-stakes corruption in student loans.   

_________________________________

* It would be appropriate to see what other OIG audits this might apply to, if they were overruled under the mistaken idea that a DCL can "obviate the enforcement of...laws."  Which is not to say that the Secretary cannot use other authority, and apparently has, to overrule an OIG student loan audit, such as the broad "compromise and settle" authority of 20 U.S.C. 1082.  The lender at issue in this case is raising the issue of equity, which invites review of contemporaneous false claims made by other lenders and how they were handled under any authority.