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banyon
05-25-2006, 08:57 AM
MAY 23, 2006
By Dawn Kopecki

Intelligence Czar Can Waive SEC Rules
Now, the White House's top spymaster can cite national security to exempt businesses from reporting requirements


President George W. Bush has bestowed on his intelligence czar, John Negroponte, broad authority, in the name of national security, to excuse publicly traded companies from their usual accounting and securities-disclosure obligations. Notice of the development came in a brief entry in the Federal Register, dated May 5, 2006, that was opaque to the untrained eye. Advertisement

Unbeknownst to almost all of Washington and the financial world, Bush and every other President since Jimmy Carter have had the authority to exempt companies working on certain top-secret defense projects from portions of the 1934 Securities Exchange Act. Administration officials told BusinessWeek that they believe this is the first time a President has ever delegated the authority to someone outside the Oval Office. It couldn't be immediately determined whether any company has received a waiver under this provision.

The timing of Bush's move is intriguing. On the same day the President signed the memo, Porter Goss resigned as director of the Central Intelligence Agency amid criticism of ineffectiveness and poor morale at the agency. Only six days later, on May 11, USA Today reported that the National Security Agency had obtained millions of calling records of ordinary citizens provided by three major U.S. phone companies. Negroponte oversees both the CIA and NSA in his role as the administration's top intelligence official.

FEW ANSWERS. White House spokeswoman Dana M. Perino said the timing of the May 5 Presidential memo had no significance. "There was nothing specific that prompted this memo," Perino said.

In addition to refusing to explain why Bush decided to delegate this authority to Negroponte, the White House declined to say whether Bush or any other President has ever exercised the authority and allowed a company to avoid standard securities disclosure and accounting requirements. The White House wouldn't comment on whether Negroponte has granted such a waiver, and BusinessWeek so far hasn't identified any companies affected by the provision. Negroponte's office did not respond to requests for comment.

Securities-law experts said they were unfamiliar with the May 5 memo and the underlying Presidential authority at issue. John C. Coffee, a securities-law professor at Columbia University, speculated that defense contractors might want to use such an exemption to mask secret assignments for the Pentagon or CIA. "What you might hide is investments: You've spent umpteen million dollars that comes out of your working capital to build a plant in Iraq," which the government wants to keep secret. "That's the kind of scenario that would be plausible," Coffee said.

AUTHORITY GRANTED. William McLucas, the Securities & Exchange Commission's former enforcement chief, suggested that the ability to conceal financial information in the name of national security could lead some companies "to play fast and loose with their numbers." McLucas, a partner at the law firm Wilmer Cutler Pickering Hale & Dorr in Washington, added: "It could be that you have a bunch of books and records out there that no one knows about."

The memo Bush signed on May 5, which was published seven days later in the Federal Register, had the unrevealing title "Assignment of Function Relating to Granting of Authority for Issuance of Certain Directives: Memorandum for the Director of National Intelligence." In the document, Bush addressed Negroponte, saying: "I hereby assign to you the function of the President under section 13(b)(3)(A) of the Securities Exchange Act of 1934, as amended."

A trip to the statute books showed that the amended version of the 1934 act states that "with respect to matters concerning the national security of the United States," the President or the head of an Executive Branch agency may exempt companies from certain critical legal obligations. These obligations include keeping accurate "books, records, and accounts" and maintaining "a system of internal accounting controls sufficient" to ensure the propriety of financial transactions and the preparation of financial statements in compliance with "generally accepted accounting principles."

http://www.businessweek.com/bwdaily/dnflash/may2006/nf20060523_2210.htm?campaign_id=rss_daily

unlurking
05-25-2006, 10:14 AM
Amazing.

I'm guessing this is to help protect the telecoms, and likely Halliburton as well.

jAZ
05-25-2006, 10:21 AM
If there is any reason to impeach Bush it's to stop his push to consolidate massive and over-reaching power in the executive branch.

It's been going on for 6 years now, and it's always cloaked in other, seemingly benign actions, like this one.

patteeu
05-25-2006, 10:30 AM
Unbunch your panties, jAZ, this has nothing to do with a consolidation of power.

Unbeknownst to almost all of Washington and the financial world, Bush and every other President since Jimmy Carter have had the authority to exempt companies working on certain top-secret defense projects from portions of the 1934 Securities Exchange Act.

Amnorix
05-25-2006, 11:07 AM
None of this is unreasonable on its face. In fact, objectively, I'd agree with it.

So why is it that when Bush does anything involving this power, it makes me nervous?

Oh right...because I don't trust him.

banyon
05-25-2006, 11:23 AM
Unbunch your panties, jAZ, this has nothing to do with a consolidation of power.

How is it not a consolidation of power in the hands of the intelligence chief?

Shouldn't this exclusion be limited to executive orders? It changes the dynamic somewhat.

Of course I'd be for repealing it back to Jimmy Cata', if that means more transparency and accountability for corporate entities.

patteeu
05-25-2006, 12:16 PM
How is it not a consolidation of power in the hands of the intelligence chief?

Shouldn't this exclusion be limited to executive orders? It changes the dynamic somewhat.

Of course I'd be for repealing it back to Jimmy Cata', if that means more transparency and accountability for corporate entities.

It's more like a distribution of power than a consolidation, but technically the President retains the full power and is now simply enabling one of his agents to act on his behalf. Negroponte can't override a decision by the President but the President can override any decision Negroponte makes under this power.

Besides, jAZ wasn't talking about consolidation of power in the hands of Negroponte, he was talking about consolidation of power in the Executive (as opposed to the Congress or the Judiciary I presume).

banyon
05-25-2006, 12:28 PM
It's more like a distribution of power than a consolidation, but technically the President retains the full power and is now simply enabling one of his agents to act on his behalf. Negroponte can't override a decision by the President but the President can override any decision Negroponte makes under this power.

Besides, jAZ wasn't talking about consolidation of power in the hands of Negroponte, he was talking about consolidation of power in the Executive (as opposed to the Congress or the Judiciary I presume).

Yes, clearly the President's authority is superior to Negroponte's. But that doesn't change the fact that we are expanding the scope and powers of Negroponte's office.

Negroponte supervised the construction of the El Aguacate air base where Nicaraguan Contras were trained by the U.S., and which some critics say was used as a secret detention and torture center during the 1980s. In August 2001, excavations at the base discovered 185 corpses, including two Americans, who are thought to have been killed and buried at the site.

Negroponte is suspected by some commentators to have known of human rights abuses carried out by CIA-trained operatives in Honduras in the 1980s. Records show that a death squad, euphemized as a "special intelligence unit" of Battalion 3-16 of the Honduran armed forces, kidnapped, tortured and killed hundreds of people, including U.S. missionaries. This death squad was trained by the CIA, the Argentine 601st Intelligence Battalion and the Argentine Army Intelligence Service. Critics charge that Negroponte knew about these human rights violations and yet continued to collaborate with the Honduran military while lying to Congress.

link (http://en.wikipedia.org/wiki/John_Negroponte)

By all means, let's give this dude as much power and control of our affairs as possible. He seems very trustworthy.

patteeu
05-25-2006, 02:47 PM
Yes, clearly the President's authority is superior to Negroponte's. But that doesn't change the fact that we are expanding the scope and powers of Negroponte's office.



link (http://en.wikipedia.org/wiki/John_Negroponte)

By all means, let's give this dude as much power and control of our affairs as possible. He seems very trustworthy.

OK, but does this have anything to do with jAZ's fear of Bush's "push to consolidate massive and over-reaching power in the executive branch" and my dismissal of his fear or are we taking this discussion in a different direction?

On the subject of Negroponte's past, I'm in favor of our intelligence services working with whoever advances our interests even if those people/groups are not choir boys. It's not like the Contras were fighting against guys in white hats or anything.

banyon
05-25-2006, 03:01 PM
OK, but does this have anything to do with jAZ's fear of Bush's "push to consolidate massive and over-reaching power in the executive branch" and my dismissal of his fear or are we taking this discussion in a different direction?

Although Bush is doing those things, this is not an instance of that phenomenon. I think consolidating this power into his hands is actually a worse phenomenon than were it a new power of the executive.

On the subject of Negroponte's past, I'm in favor of our intelligence services working with whoever advances our interests even if those people/groups are not choir boys. It's not like the Contras were fighting against guys in white hats or anything.

Or that many of them were convicted for related crimes in the late 1980's? And now we are entrusting them with key posts in National Security.

the Talking Can
05-25-2006, 04:40 PM
yes, we have every reason to trust them..they've never abused our trust or their powers....jesus...

at this point I think we can all agree that the Executive Branch operates with the impunity of a Monarchy...and our congressmen/women? cowards...all of them (except Feingold)

penchief
05-25-2006, 06:45 PM
Unbunch your panties, jAZ, this has nothing to do with a consolidation of power.

But not all of them have been given free reign to rape the American taxpayer for all they're worth without any oversight or accountability. Haliburton's not there to do a job. They're there to get all they can get while the gettin' is good.

And they're doing a mighty fine job of it.

Anybody think it's time to find out just what went on at the Cheneyburton/Enron supersecret Energy Task Force Meetings? I wonder if everybody had a vote in the decision to invade Iraq or if it was strictly Cheney's call.

jAZ
05-25-2006, 07:15 PM
But not all of them have been given free reign to rape the American taxpayer for all they're worth without any oversight or accountability. Haliburton's not there to do a job. They're there to get all they can get while the gettin' is good.

And they're doing a mighty fine job of it.

Anybody think it's time to find out just what went on at the Cheneyburton/Enron supersecret Energy Task Force Meetings? I wonder if everybody had a vote in the decision to invade Iraq or if it was strictly Cheney's call.
There is a 50/50 chance that the issue of invading Iraq was a central topic at those energy meetings.

penchief
05-25-2006, 07:33 PM
There is a 50/50 chance that the issue of invading Iraq was a central topic at those energy meetings.

I'd guess that the odds are better than 50/50.

patteeu
05-26-2006, 10:19 AM
There is a 50/50 chance that the issue of invading Iraq was a central topic at those energy meetings.

I think they spent 1/3 of their time brainstorming about how to make the 9/11 attacks look like an al Qaeda operation, 1/3 of their time figuring out how they could get gas prices up to $4 pg by the end of W's second term, and 1/3 of their time scheming about how to drive Gray Davis out of office and how to steal the 2004 presidential election in Ohio.

jAZ
05-26-2006, 10:39 AM
I think they spent 1/3 of their time brainstorming about how to make the 9/11 attacks look like an al Qaeda operation, 1/3 of their time figuring out how they could get gas prices up to $4 pg by the end of W's second term, and 1/3 of their time scheming about how to drive Gray Davis out of office and how to steal the 2004 presidential election in Ohio.
Well, at least you seem to acknowledge that during these secret meetings Bush/Cheney allowed the oil companies to write the energy policy that resulted in not one single mention of the idea of energy conservation.

CHIEF4EVER
05-26-2006, 11:38 PM
(except Feingold)



ROFLROFLROFLROFL

Ugly Duck
05-27-2006, 12:12 AM
Well, at least you seem to acknowledge that during these secret meetings Bush/Cheney allowed the oil companies to write the energy policy that resulted in not one single mention of the idea of energy conservation.It wasn't just the oil companies setting our energy policy at the Cheneyburton meeting. Ken Lay was invited also.

Ugly Duck
05-27-2006, 12:17 AM
Administration officials told BusinessWeek that they believe this is the first time a President has ever delegated the authority to someone outside the Oval Office. No biggie.... Bush wasn't making any of the decisions in this administration anyway. The cabal is just making that official in this case.

the Talking Can
05-27-2006, 08:46 AM
No biggie.... Bush wasn't making any of the decisions in this administration anyway. The cabal is just making that official in this case.

tsk tsk...he's the DECIDER-ER-ER...uh, -ER....