In order to effectively do his or her job, the state attorney general is to one degree or another independent from the Governor.   All but two states (Wy and Ak) and the District of Columbia have expressly rejected the federal model of an AG who is appointed by the Chief Executive and who can be removed without cause.  I have long believed that this independence, derived from our common law heritage, has served our country well by providing a positive check on executive power.

On Monday, January 28, 2008, I traveled to the District of Columbia and broke my cardinal rule of not telling a state that isn’t Maine how they should structure their law enforcement agencies.   I made the exception first because I was asked and second because the DC AG office continues to be beset with turnover at the top and uncertainty at the bottom.  The fastest way to fix the problem would be for them to give some statutory independence to the AG.  This simple step would decrease turnover, attract talent and financial resources and reduce the number of outside counsel.

Although I praised many of the former Attorneys General of the District of Columbia and much of the staff who currently work there, it is nonetheless clear to me that the DC government has a problem and they had better fix it.

Nicolas Bagley has written a very good op-ed in the Washington Post of January 25 that describes how the Bush Administration, key Democrats on the Hill and the banking community destroyed the ability of state government to protect its citizens from predatory fraud.   He has also written a longer article in Slate.

Here are the key provisions:

".....Enter the feds. Some of the biggest players in the secondary mortgage market are national banks, and the states' efforts to curb predatory lending clashed with banks' fervent desire to keep the market rolling. So the banks turned to the Treasury Department's Office of the Comptroller of the Currency. The primary regulatory responsibility of the OCC is ensuring the safety and soundness of the national bank system, but almost its entire budget comes from fees it imposes on banks, which have the option of incorporating under state law. Put another way, the agency's funding depends on keeping the banks happy. Little surprise, then, that the OCC acted when the national banks asked it to preempt subprime-mortgage laws such as Georgia's, arguing that they conflicted with federal banking law.

Despite the banks' thin legal arguments, the OCC issued regulations in early 2004 nullifying the state laws as they applied to national banks. The agency reasoned in part that the states just got it wrong. As the then-comptroller explained in a 2003 speech: "We know that it's possible to deal effectively with predatory lending without putting impediments in the way of those who provide access to legitimate subprime credit."

With the state laws nullified, national banks and their subsidiaries were free to engage in the practices the states were hoping to stamp out. (Indeed, Georgia scuttled its law because it didn't want to give national banks a competitive advantage over its state institutions.) Facing pressure from subprime lenders and Wall Street, and left without a real chance of holding investors responsible for purchasing ill-advised loans, state legislatures gave up on trying to meaningfully expose downstream buyers to liability for facilitating predatory lending.

In retrospect, the OCC's decision looks wrongheaded. What the agency took to be shortsighted consumer protection laws laden with hidden costs turned out to be prescient market-corrective reforms. It's impossible to know for sure, but had the state laws been permitted to go into effect, investors would probably be sitting on fewer subprime loans that will never be repaid.

The feds ignored the basic principle that no level of government has a monopoly on good policy. As federal officials move to clean up the subprime mess, it's worth remembering that they helped to create it."

Before he became the newly chastened Governor of New York who has been bludgeoned into proposing a 21% pay increase for the hard working legislators of the Empire State, Eliot Spitzer was the hard charging Attorney General who twice failed by a whisper in being named Time Magazine’s “Man of the Year.” 

I believe that one of Spitzer's most successful cases was his 2004 law suit against the drug company Glaxo Smith Kline. Spitzer's litigation alleged that Glaxo’s promotion of its drug Paxil for the treatment of childhood depression failed to disclose its own studies that suggested a possible link between the use of Paxil and suicide or, in the legalese of a 1998 internal Glaxo memo, “effectively manage the dissemination of these data in order to minimize any potential negative commercial impact.”  Although Glaxo’s CEO initially spluttered about having met the requirements of the FDA and that the company was within its First Amendment rights, within days and in the face of tanking stock price (evidently the Street did not reward companies that conceal data about how their product might cause teenagers to commit suicide), Glaxo ran up the white flag.   To its credit, the industry trade group, Pharma, began a voluntary process by which companies would be pushed to record all of its clinical data.

The federal agency who should have been watching Glaxo was the FDA, but from 2001 to 2004, the FDA was firmly in the hands of the deregulators. The General Counsel and de facto Chair of the FDA was a former tobacco and drug company litigator who never met an FDA regulation he didn’t hate.  Because the FDA did nothing, it was up to Eliot Spitzer to do the job.

All of this is the background to the welcome news that appeared in yesterday’s front page headline in the New York Times.  The FDA is “now requiring drug makers to study closely whether patients become suicidal during clinical trials.”  The story goes on to say “the seeds for the new federal effort were planted four years ago…” which by my count is 2004 – the year of Spitzer’s Paxil initiative.

Three belated cheers for the FDA.

And one huge “thank you” to Eliot Spitzer.

Armed with a 600 page report citing significant failures in a 600 student charter school in Cincinnati, the Harmony Community School, Ohio Attorney General Marc Dann has filed a law suit to shut it down.   The list of school failures, many of which were compiled by the State Auditor, are horrific and have already landed the private owned but publicly funded school on an "Academic Emergency" list maintained by the Ohio Department of Education.   

Dann has now sued four underperforming charter schools all of whom are authorized to operate outside the laws controlling local Ohio education.

What makes Dann's suits important beyond the State of Ohio is that his shut down efforts are not based on representation of a state agency or Board but rather on his authority to regulate non-profit organizations.  In this case, Harmony Community School is owned by the Buckeye Community Hope Foundation.

As is true in many states, the State Board of Education is designed to be independent of any Governor or Attorney General.  In Ohio, eleven members are elected from their respective State Board districts and eight are appointed by the Governor over a period of years. The chairs of the education committees of the Ohio House of Representatives and the Ohio Senate are ex officio members.  The purpose of such an arrangement is to take education "out of politics."

The Harmony School is saying that Dann is supplanting the Board and its licensing functions with his personal view of whether the school should continue to function.   Dann is saying that it is his job to make sure that Ohio non-profits are not failing in their purpose and, in doing so, subjecting kids to a lousy education.

The implications of Dann's broad use of his non-profit authority - especially in the face of non-action from the state agency that licensed the school - will resonate beyond Ohio.  Other charter schools, and other attorneys general, will be watching the outcome of the Ohio litigation.

Anyone interested in the on-going campaigns for state attorney general would be wise to check out Lou Jacobson's excellent analysis in today's Stateline.   You can find it at http://www.stateline.org/live/details/story?contentId=272385

As the stock market tumbles and President Bush offers billions in military aid to the Saudis, proceeds from the swollen coffers of billionaires from around the world are being sent to American banks to bail them out for the greed that they exhibited in selling and purchasing of subprime mortgages.  Although I have said it many times before, this monumental disaster was all avoidable.  

State attorneys general, state banking officials and lending advocates (such as the Center for Responsible Lending and the AARP (whom I represent)) have been working on this issue at least since 2001.  The Bush Administration, aided and abetted by both political parties who were stuffing their pockets with huge campaign contributions from the offenders, reacted by affirmatively preempting efforts by attorneys general in their efforts to stop the fraud.  Business organizations automatically attacked attorneys general as not understanding the marketplace and even the Congressional Black Caucus turned their backs to the obvious fraud in their communities and pontificated that white lawyer prosecutors were not sensitive to the need to bring mortgage credit to people of color.

In case you haven’t checked, these are the same politicians who are wringing their hands and submitting legislation that will never pass

None of this had to be this way.   None of it.

Social Networking giant “MySpace,” has reached an agreement with forty-nine attorneys general wherein it they all agree that all parties – MySpace, law enforcement, child advocacy groups and families – must work together to protect the millions of minors who now use the largest social networking site.   During the two years of negotiations, and especially after the company came under adult leadership after it was purchased by News Corp, MySpace has implemented a large number of new authentication technologies that have already had a positive impact.  Under the leadership of NC AG Cooper and Ct. AG Blumenthal, MySpace has also agreed to form and fund an on going industry Task Force that will continue to seek new technological and policy protections.  The AG’s also urged parents to be more active in using My Space technologies to protect their kids.   As Pa.Tom Corbett wisely put it, “we don’t let our kids drive cars without careful education and testing, so why shouldn’t we do the same for the behavior of children on the internet.”

The AG’s did not sue MySpace nor have they threatened to do so (although as Ohio AG Marc Dann stated in front of the nodding AG’s present, nothing in this agreement permanently takes litigation is not off the table.  The AG’s repeatedly stated that the negotiations had at times been contentious and that disagreements continue.  That being said, in my view, this creative and cooperative approach to law enforcement will be the hallmark of future AG initiatives. The non-litigation approach is clearly a faster way to protect kids.

The AG’s and MySpace have asked other social networking sites – most specifically Facebook and Google – to sign today’s agreement.  It would be a very, very wise thing for these two companies to take this offer of cooperation seriously.

I continue to be pleased with the way that Attorney General Mukasey is digging himself out from the mess he inherited from the scandal ridden administration of his woeful predecessor Alberto Gonzales. Mukaskey seems to understand the symbolism of his actions (see my post of November 30) as he carefully unwinds the biggest messes.  

By removing a completely incompetent interim US Atty in Minnesota, he sent a message to the entire Department that competency is back in style.  By limiting the number of DOJ employees who talk to the White House (and in doing so returning to the Reno standard), he sent the message to the hacks in the Bush Administration that the days of politically tainted prosecutions are over.   He has also authorized a criminal investigation into the destruction of videotaped interrogations by the CIA.  And by acknowledging that he is scrutinizing how US Attys.give out contracts to monitor no-prosecution/deferred criminal settlements (in light of the no bid contract to former AG Ashcroft by the US Atty of NJ). he is telling his troops in the field that even in the last days of the Bush Administration, they cannot feather the nests of their pals.

Mukasey knows that he is in office for just one year and that the hard decisions on all of these issues (should there be this increase in monitoring in lieu of prosecution?) will be made by the next Administration.   That being said, he is not “just walking around to save on funeral expenses” (as my old friend in the Maine legislature, the late Don Hall of Sangerville, used to say.)  AG Mukaskey deserves our respect as he quietly works to restore our Department of Justice to its historic stature as a non-political law enforcement agency.

Should an attorney general – especially one whose duties require supervision of the electoral system and the prosecution of election fraud – ever serve as an officer of a political campaign?  Outside observers – editorial boards, academics, good government advocates, ethics experts – will undoubtedly say “Never!   Inherent conflict of interest!”  

Back here in the real world, it is perfectly normal for attorneys general, who are also leaders within their political party, to serve as officers in campaigns. While attorney general, I was the Maine Chair of three (losing) campaigns for President.. Today at least two fine attorneys general (McCollum in Florida and Miller in Iowa) are the Chair of Presidential campaigns in their states.  And in the greatest contested presidential election in our country’s history in 2000, my friend Bob Butterworth conducted himself with honor as both the Chair of the Gore campaign and, to the Democratic Party’s great consternation, as Attorney General of Florida when he disagreed with Gore on whether the veteran’s should be allowed extra time to have their votes counted.

Any thoughtful person would have to acknowledge the possibility of a problem, but the truth is that an attorney general also owes a responsibility to share with his constituents his or her views as to who the best person is to be President of the United States.

I am grabbing a minute from the bone chilling cold of Des Moines to post a thought on the caucus system that is currently dominating the country’s attention.   Having been here for a few days and knocked on doors for my candidate (Obama) and listened to several others (Biden, Richardson, Edwards) and chatted with one (Huckabee – who had all the time in the world for me),I have overcome any initial skepticism and now believe that this entire process is an extraordinarily positive experience for the country.  

To be sure, those who are about to lose are right now sending out spin operatives to trash both the process and this wonderful state, but you should not believe them or the pundits who mouth the same conclusions.  The truth is that the entire world is going to get a thoughtful and caring view into the character of the man or woman who will be out next President.   If like me you truly believe in democracy, then this time and place will reflect our country’s judgment better than anything yet devised.

The voters of Iowa take this very, very seriously.   Unlike the rest of us, they have had multiple opportunities to meet and ask questions to every candidate.  Unlike the rest of us, they are watching debates and discussing them with their families. And unlike the interest groups and outsiders (like me) who knock on their doors, they are fundamentally unsure as to who they should select. As one young man said to me yesterday,  “Am I a Republican or a Democrat?   I don’t believe in killing babies or in going to war in Iraq.   I know that whoever wins won’t be able to do everything they say, but we need to change and I want the person who will really try.   I don’t know which way to go, but I am going to my caucus and I will choose both a party and a candidate - because I have to….”

The voters of Iowa want to get this right, and we should pay honest attention to what they say.