What Would James Madison Do?

March, 2025

Washington —  Some of our nation's leaders see our country in a constitutional crisis with no way out because the founders did not provide necessary checks and balances against an executive who believes he is not bound by the rule of law, a legislative branch fearful of checking him, and a judicial branch with no power to enforce its decisions.    

How might James Madison react to this assertion?  I think he would push back and say the checks are there, just waiting to be used.  

Take, for example, illegal impoundment of funds appropriated through the legislature's power of the purse.  A judge orders the funds to be used as directed, but the executive does not comply in good faith, creating an impasse.  A next step that Madison might recommend?  The plaintiff could ask the court for a finding of civil contempt.  After a hearing, the judge can impose fines or take other actions against executive officials not as punishment but to force compliance, with steep and perhaps escalating prices for refusal.* 

Note that in the Madisonian system, the executive has the power to pardon criminal convictions, but not civil judgments. And the pardon power does not extend to civil or criminal convictions in state courts.  (Also note: a judge can make a finding of civil contempt without a complaint from the plaintiff, but may be reluctant to do so for fear of personal safety or political attacks from the executive.  Hence empowering the plaintiff with initiating this check makes it more practical and effective.)  

So far, in the first two months of the current constitutional crisis, it's not clear how many plaintiffs have asked courts to deploy this check on the executive, and no judge has exercised the check.  It's overdue, at a time when life-saving medicines are being withheld from suffering populations all over the world, food produced by American farmers is rotting rather than being delivered to the hungry, not to mention the possible collapse of federal agency systems on which we rely for food safety, tax administration, weather forecasting, student loans, aviation safety, air and water quality, and Social Security.  

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*Civil judgments can be enforced by fines, imprisonment, and liens against private property.  Federal judges can deputize state law enforcement to carry out the judgments.  In the D.C./Maryland area, state and local officials must be ready to enforce, as required, federal district judges' decision in cases where  the U.S. Marshals Service is unavailing.     

The Power to Remove is the Power to Destroy

March, 2025

Washington — A federal district court has determined that President Trump's attempted firing of a member of the Federal Labor Relations Board, Susan Grundmann, was illegal.  Judge Sparkle L. Sooknanan gives us a lesson in constitutional checks and balances along the way in her full-throated opinion in Grundmann v. Trump.  

She bases much of her analysis on the precedent of Humphrey's Executor, but in so doing shreds the concept of an all-powerful executive that can dominate the other branches of government on a whim (or, she hints, in an overthrow).  

Let's carry that thought further.  The analysis applies even to checks and balances within the executive branch.  Our constitutional system of separation of powers relies not only checks and balances between the three branches, but also within each branch itself.  Our founders created two separate houses in the legislative branch to check each other; they created different levels of courts for the same purpose in the judicial branch.  So why would they set up the executive branch with no internal checks, as the Trump administration argues?  

They didn't.  We have long-standing plural executive system that serves as an internal check on the president. 

One of the checks in this system is a limitation on the president's power to remove.  The power to remove is the power to destroy and must be limited, just as the power to tax is the power to destroy and must have boundaries, as Chief Justice John Marshall determined in McCullough.  

Viewed in this context, it is a needless exercise to count the number of commissioners on the head of whichever plural executive pin is at issue in removal cases, as some have unwisely proposed. One, three, five; the power to remove is still the power to destroy.  If anything, an individual agency director, like Hampton Dellinger at the Office of Special Counsel, could have had an especially compelling removal case, if only he had pursued it.

Susan Grundmann fought her illegal removal, Judge Sooknanan decided in her favor, the Constitution survives, and at least temporarily the country is the better for it.     

Paving the Way Back to Corruption in Student Loans

March, 2025

Washington — After two decades of efforts by many public-spirited citizens and officials to wring fraud, waste, and abuse out of federal student loan programs, the Trump administration is paving the way for corruption's return.  

First, the new administration fired the Department of Education's inspector general, wiped out the Consumer Financial Protection Bureau, and terminated research contracts essential to identifying corruption.  (Does anyone believe these choices were made to balance the federal budget?)

Now the new administration proposes (if Project 2025 is any indication) to return all student lending to many of the very entities that failed so spectacularly when loans were made with private capital and guaranteed by federal taxpayers.  Several of these organizations were once caught making false claims, creating illegal back-door deals with schools, and invading loan databases to exploit unwitting borrowers to their disadvantage if not ruin.  

When the Great Recession hit in 2008, the system of private capital, guaranty agencies, and secondary markets froze up and had to be bailed out by the federal treasury through Congressional legislation known as ECASLA.  In 2010,  Congress asked itself why this corrupt system should continue on taxpayer subsidies and ended it for all federal loans thereafter.

Unfortunately, Congress left a vestige of the old system in place for servicing the Department of Education's Direct Loans.  Two of the largest servicers have since either been debarred (Navient) or quit (PHEAA) for abuse of borrowers.    

If you're the Trump administration in 2025, looking for ways to dismantle the Department of Education, what's not to like about bringing back the old system?  Many of the channels of corruption still exist, just waiting to be reactivated.  The old transactional relationships — federal subsidies returned through big political contributions — never went away.  

And who's going to catch you?  

How bad was the old system?  Here is a short, annotated bibliography to re-inform public policy. Click on the authors.

1. Department of Education. Misuse of the NSLDS data siystem by lenders, marketers, and collection agencies was so alarming the system had to be shut down and restarted with new controls. 
2. Stephen Burd.  Explains how the author of the NSLDS letter above was corrupt himself. 
3. Stephen Burd.  Reveals details of school/lender corruption. 
4. Amit Paley.  Must reading in view of DOGE attempts to invade databases.
5. Dan E. Moldea.  The formidable investigative journalist turns his attention to lender false claims using primary sources to expose corruption, focusing on PHEAA and SLFC.  
6. Ryann Liebenthal. Perhaps the most comprehensive book yet on the failures of the federal guaranteed student loan system. 
7. Washington Monthly.  Provides examples of corruption. 
8. Jonathan D. Glater and Karen W.Arenson.  An insightful look at multiple entanglements. 
9. Danielle Douglas-Gabriel. Recounts the 9.5% scandal through 2015.  [Full Disclosure: I brought the suit in question.]
10. Public domain.  Previously sealed primary source documents, dealing with several lenders' false claims, were released into the public domain in November, 2024, pursuant to a landmark First Amendment decision by the Fourth Circuit Court of Appeals.  None of the lenders is a sole interested party in these documents, nor are the documents necessarily representative of all lenders, but the documents provide a level of detail essential to understanding the relationship between lenders and federal agencies.