Business Needs a Civil Liberties Union -Now!

Spring 2009 issue -- The KPMG case demonstrates that persecuted businessmen need a permanent organization that can be counted on to defend the civil liberties of all worthy victims, in all venues, and over the long haul.

The five-year assault on KPMG and its executives was waged in the media, in the courtroom, in Congress, and in the Justice Department.  The persecutors’ weapons included a propaganda barrage, witch-trial hearings, legal bludgeons, and divide-and-conquer tactics –all wielded to produce a siege intended to starve their victims of resources. Through it all, the KPMG executives stood virtually alone and friendless, with no one but themselves daring to protest their treatment. When a few members of the KPMG board sent the media a strongly-worded letter denouncing the firm’s betrayal of its employees, they sent it anonymously.

The potential tactics of a Business Civil Liberties Union are also demonstrated by the KPMG case. Clearly, the vast majority of people do not understand political and economic theory. In defending businessmen who have come under judicial and media assault, we must postpone for a future libertarian time the argument that a person should be allowed to engage in whatever non-coercive acts he chooses. Because people know that they and their society are often harmed by non-coercive acts, they do not understand why we libertarians place so much emphasis on the absence of coercion.

But the KPMG case shows that people do understand fairness. And that is the ground on which we should make our stand. Virtually every major crusade and every major trial involving “white-collar crime” has involved the violation of rights that ordinary people consider basic. When New York Attorney General Eliot Spitzer was riding high, for instance, and the media were yelling for the blood of businessmen, it was impossible to persuade the public that the business practices he denounced as sleazy and deceptive ought to be permitted. (That case was made, later, and quietly, in a biography of Spitzer by a liberal Washington Post reporter.)  But even amid the Spitzer-induced hysteria, a Business Civil Liberties Union could have argued persuasively that Spitzer was trampling on the rule of law. That is something people would have understood.

When Legal Times published a powerful analysis of the Martin Act, used by Spitzer as a mandate for his crusades, we caught a glimpse of the sort of points a Business Civil Liberties Union ought to be making.  Senior Editor Nicholas Thompson began by observing that the Martin Act empowers the New York Attorney General

to subpoena any document from anyone doing business in the state; to keep an investigation totally secret or to make it totally public; and to choose between filing civil or criminal charges whenever he wants. People called in for questioning during Martin Act investigations do not have a right to counsel or a right against self-incrimination.Now for the scary part: To win a case, the AG doesn’t have to prove that the defendant intended to defraud anyone, that a transaction took place, or that anyone was actually was defrauded (“The Sword of Spitzer,” May/June 2004).

In addition to having popular appeal, such a civil liberties approach could draw together a broad coalition of businessmen, many of whom (unfortunately) do not accept the full libertarian argument. Most businessmen—except for those whom author Robert Bradley, Jr. derisively calls “political capitalists”—do wish to operate under the rule of law: a set of knowable, neutrally administered rules and regulations. They realize that if the rule of law is undercut by arbitrary power, then their ability to forecast and plan for their businesses will also be undercut. Thus, they would be drawn to the simple demand of a BCLU that regulatory and judicial oversight of business be conducted under the rights guaranteed by the Fifth, Sixth, and Fourteenth Amendments. It is time, and past time, for businessmen to heed to the wisdom that Benjamin Franklin uttered on July 4, 1776: “We must all hang together, or assuredly we shall all hang separately.”

Explore:

For more on “political capitalists” see the website for the new book, Capitalism at Work: Business, Government, and Energy, by Robert Bradley, Jr., at http://www.politicalcapitalism.com .

‍