Learn more about Peltz-Steele v. UMass Faculty Federation at Court Listener (complaint) and the Liberty Justice Center. The case is now on appeal in the First Circuit as no. 22-1466 (PACER paywall). Please direct media inquiries to Kristen Williamson.
Showing posts with label money. Show all posts
Showing posts with label money. Show all posts

Wednesday, November 23, 2022

Anti-corruption law violates business-owner privacy, EU court holds with myopic appraisal of transparency

A key European Union transparency law that allows watchdogs to trace corporate ownership to combat corruption has been struck down by the EU high court for compromising personal privacy.
EU beneficial owner registry map from Transparency International, 2021. Read more.
CC BY-NC-ND 3.0

I'm not a hard skeptic on the personal privacy prerogative of the EU General Data Protection Regulation. To the contrary, I've written that there's a lot to like about the emerging global privacy norms embodied in the GDPR, and, contrary to conventional wisdom, American social expectations, if not yet federal law, are converging with Europe's.

That said, the EU Court of Justice yesterday announced a profoundly problematic decision at the junction of public access and personal privacy. The blanket disclosure requirements of a key anti-money-laundering law can't stand, the court held, because they don't calibrate the public need for access with the privacy of natural-person business owners with sufficient precision, that is, as a function of necessity and proportionality.

Troublingly, the court characterized transparency norms, which are grounded in treaty and law more firmly in the EU than in the United States, as specially relevant to the public sector and not fully implicated in the private sector, in the context of business regulation.

The potential implication of this proposition is that access to information is limited to a requester learning "what the government is up to," to the exclusion of government oversight of the private sector. That's a cramped and problematic construction of access law that has dogged journalists and NGOs using the U.S. Freedom of Information Act (FOIA) for decades. Read more in Martin Halstuk and Charles Davis's classic 2002 treatment. As I have written in my comparative research on access to information, access to and accountability of the private sector is a problem of our times. We must solve it if we're to save ourselves from the maw of corporatocracy.

In my opinion, the CJEU decision fundamentally misunderstands and overstates the legitimate scope of data protection regulation with the effect of enervating transparency as a vital oversight tool. The impact is ironic, considering that data protection regulation came about as a bulwark to protect the public from private power. The court turned that logic on its head by using personal privacy to shield commercial actors from public scrutiny.

Unfortunately (for this purpose), I have my hands full in Europe (coincidentally) right now, and I lack time to write more. Fortunately, Helen Darbishire and the team at Access Info Europe already have written a superb summary. Their lede:

In a ruling that has sent shockwaves through Europe’s anti-corruption and transparency community, the Court found that the Fifth Anti-Money Laundering Directive (AMLD5, 2018) is too loosely framed and provides for overly-wide public access to the [ownership] registers without a proper justification of the necessity and proportionality of the interference with the rights to privacy and personal data protection of the beneficial owners.

A saving grace, Access Info observed, is that the court did not rule out transparency per se; rather, requesters will have to fight for access case by case on the facts, upon a properly narrowed regulation. In U.S. constitutional terms, it's like saying the one-size-fits-all law was struck for vagueness, but the regulatory objective still can be achieved under a narrower rule that works as applied. All the same, journalists and non-profit watchdogs are not famously well financed to fight for access on a case-by-case basis.

The case is No. C‑37/20 & No. C‑601/20 in the Grand Chamber of the CJEU.

Monday, May 24, 2021

Boosted twice by war, then by economic catastrophe, paper money tells the story of America

Notaphilist, historian, and my uncle, Armand Shank yesterday gave a fascinating talk on the history of banking and paper currency in Maryland for the Historical Society of Baltimore County.

From Shank's collection: Currency issued in Baltimore
by the Continental Congress, 1777
The history of money is, of course, the history of America.  The British initially held strict control over currency in the colonies, Shank explained, and, lo and behold, British banking rates and policies seemed never to inure to the benefit of colonists.  Local currency, besides federal "IOUs," sometimes appeared of necessity and represented resistance.  Benjamin Franklin Bache, grandson of Benjamin Franklin, was a publisher of money and used samples his grandfather brought back from Europe as models.  Shank showed one of Bache's products.

Late in the 18th century, the Continental government issued national currency to raise millions of dollars for the Revolution.  Acceptance of the currency was expected, Shank said, for refusing it would brand one a traitor.  After independence, the First Bank of the United States was chartered in 1791, but lasted only until 1811, a casualty of Jefferson's state-centric vision of federation prevailing over Hamilton's wish for a strong central government.  State and local money came back on the scene in a big way, notwithstanding the ultimately decisive U.S. Supreme Court approval of the Second Bank of the United States in McCulloch v. Maryland, the 1819 staple of the modern constitutional law class.  Shank shared images of money from Baltimore County in the early 19th century.  Counterfeits proliferated.

Shank's first acquisition
In the 1860s, it was the need to raise money for war that again prompted the assertion and mass issue of federal currency.  The National Banking Acts of 1863 and 1864 strengthened and standardized national currency and, by 1865, phased out currency issued by state banks.  Local banks continued to issue currency, but only with the imprimatur of a national charter system.  Financial crises early in the 20th century led to reforms such as the first Federal Reserve Act, in 1913.  Federal reserve notes as we recognize them today emerged from a more vigorous standardization policy at the start of the Great Depression in 1929.

Quonset-style home in 1948
(Ed Yourdon CC BY-NC-SA 2.0)
Shank shared images from his collection of notes issued by the National Bank of Cockeysville, the town in northern Baltimore County where Shank grew up.  A $20 note of the bank was the first in Shank's collection, coming into his possession when he was a boy.  Circa 1950, Shank's father, Armand Shank, Sr., took Armand, Jr., to see Alexander D. Brooks, a cashier whose name appeared on the currency and who lived still in Cockeysville.  Alas, Shank said, Brooks, then in his 80s, had little recollection of his work for the bank.  Brooks died in 1956.

I have fond memories of being a kid in the 1970s, playing with cousins in the backyard of Armand Shank, Sr.'s home, where Armand, Jr., grew up, in Cockeysville.  The home, built in 1950 and still standing, was of a quonset-hut style, unusual today.  Many such homes were once built in this cost-effective style to meet the demand for housing after World War II: the homestead of the Baby Boom.  I didn't know that at the time, of course; I was more interested in the vast volume of lightning bugs that populated the yard.  I remember the smell of the place, fresh cut grass with a not unpleasant hint of motor oil.  It charms me now to think of another boy in that same environment, a generation earlier, one day awakening to a passion for American history told through the lineaments of banknotes.

Armand Shank is a member of the Board of Directors of the Historical Society of Baltimore County.   He is co-author of Money and Banking in Maryland: A Brief History of Commercial Banking in the Old Line State (1996).  He has a new article forthcoming on the subject for History Trails, a publication of the society.

Sunday, January 27, 2019

Money can't redeem life, but don't think it doesn't help tort survivors


When my 1L Torts class studies wrongful death, I take the occasion to challenge the notion that money, based on quantified loss, is necessarily the best way to effect a liability award (cf. Prof. Andrew McClurg's gut-wrenching and classic Dead Sorrow).  Matthew R. Stevens, '21, posted the following on the class discussion board, and I think it makes a worthwhile complementary observation about tort awards in our age of debt and financial fragility.  Reprinted with permission.



Some Thoughts on Wrongful Death Damages
by Matthew Stevens – Friday, January 25, 2019

Professor Peltz-Steele discussed the idea of money damages in wrongful death actions, and their ability to make up for what was lost. He challenged whether they really made that pain any better, and whether a $1,000,000 award helps any more than a $500,000 award. I just wanted to share my thoughts on a possible argument that the monetary damages could help make up for what is lost.

The loss of a family member is surely nothing short of a nightmare. The impending depression, stress, and various other negative emotions can impact someone’s life in irrepressible ways. No earthly remedy could ever truly provide perfect relief for such a loss. I think it could be argued, however, that money is well suited to lessen the impact of the loss.

According to a Case Western study [reported here by CNBC], increased income can actually cause a “reduction in negative emotions” (CNBC, para. 6). Furthermore, the study also found that higher incomes could “reduce the incidence of serious mental illness” (CNBC, para. 6). It is important to note that the study is dealing with annual incomes, and not large lump sums of cash. The study also notes that the increase in happiness shows diminished returns as you reach upwards of $160,000 a year (CNBC, fig. 2). I think this can be reconciled by looking at the damages award as a lump-sum salary. For example, if a father at the age of 40 received a wrongful death damages award of $1,000,000, you could divide that award by the remainder years before retirement (25) to create a net increase in annual income of $40,000. That increased “income” could statistically reduce his negative emotions, and reduce the chances of serious mental illness. An award of $500,000 would surely help, but over time it would not have as big of an effect, only creating an extra $20,000 in annual income. This of course is not a fix-all, but it is certainly a start to fix the unfixable.

Moreover, on the other side of the coin, issues with money statistically causes large amounts of stress. An APA survey in 2014 found that “72 percent of Americans reported feeling stressed about money at least some of the time during the past month” (APA, para. 3). Furthermore, 22% experienced “extreme stress” over money in the past month (APA, para. 3). The study goes even further to explain the types of issues stressing over money creates, including avoiding medical care, and being a major conflict in relationships (APA, para. 5). So then perhaps the increased monetary awards for wrongful death actions could effectively reduce stress in the claimant’s life. With a large influx of cash, it is arguable that a lot of money-induced stress would be taken out of the picture and increasing the claimant’s quality of life.

This of course was a quick look into the idea of monetary damages and their possible ability to remedy the loss of a loved one. I would like to reiterate that I don’t believe money can ever replace the loss of a loved one, but I’m simply saying there is an argument that money helps reduce the net loss of quality of life for the claimant. It does appear that the theory holds some weight, but with its issues: one major issue being the diminishing returns on happiness when income reaches a certain threshold. Perhaps this could be integrated into the analysis more, but I wanted to keep a small scope for the analysis.

Sunday, July 22, 2018

Money in soccer, money in higher ed: Lazio will never be Juventus; will the UMasses ever be ‘UMass’?

This morning I was reminded of this observation about football (soccer) from The Blizzard (#25, June 2017), spoken by Swedish football manager Sven-Göran Eriksson, now coaching in China, in an interview by football writer Vladimir Novak (@VNovak13):


Well, whether you like it or not, to make a winning team you need money. One could argue that Leicester has won the Premier League title even though they invested far less money than, for example, Manchester United or other clubs, but that was an exception. Fact is, in the long run, if you want to be a big club, you need money. Bayern Munich is Bayern Munich, Barcelona is Barcelona, Real Madrid is Real Madrid and so on. You cannot build a great team without money. I think you have a good example with Lazio. When I was at Lazio, Sergio Cragnotti was the chairman and owner of the club, and he invested a lot of money. And then, after he left, all changed. Lazio are still a big club. Maybe they have the chance to win the Serie A title now and then, but they are not Juventus.


The statement reminds me of why I stopped being a baseball fan many years ago.  The Baltimore Orioles were my Lazio.  They would never be the Red Sox or Yankees.

It struck me that this almost self-evident assertion is true of more than football and baseball—indeed, is true of higher education.  And in higher education, disparate resources play an out-sized role in perpetuating socio-economic disparity and widening the gap of opportunity and wealth that afflicts the United States.

In Arkansas, where I started in academics, the public higher ed system was loosely and unofficially divided in just this way.  The well-resourced University of Arkansas—the top tier never needs a geographic locator (Fayetteville)—served the state’s elite.  The slimly resourced University of Arkansas at Little Rock served an urban working class.  And the resource-starved University of Arkansas at Pine Bluff served the rural and poor—disproportionately African American.  The same dynamic described the state’s law schools in Fayetteville and Little Rock (with few graduate options in Pine Bluff).  Incentivized by monied interests, as usual in politics, the state legislature perennially resisted calls to level the playing field.  The schools themselves were complicit in maintaining the status quo.

I thought Massachusetts would take a more progressive approach with its first and only public law school in Dartmouth.  It hasn’t, at least not yet.  Boston’s many private schools fill in the top-tier options in Massachusetts, while the law school, affiliated with UMass Dartmouth, fits in at the Little Rock-like mid-level, focusing on the working-class South Coast.  The otherwise elite “UMass” (Amherst), the state flagship, has legal research resources—for that matter, research resources in any field—superior to UMass Dartmouth’s, even with no law school there.  UMass Boston might be the state’s Pine Bluff.  Each campus knows its place and stays in its socio-economic lane.
 
There is limited revenue sharing to level the playing field in European soccer and in American baseball.  Those measures resulted when, and only insofar as, the un-level playing field was recognized as a threat to the survival of the sport business model.  That’s OK; sport is business.

Higher education isn’t business.  Higher education is supposed to be about opportunity for all those who merit it.  To be clear, this is a libertarian ideal.  Higher education is about teaching people to fish, not giving fish away.  It’s potentially the best social welfare program ever conceived.

I was reminded of this sport-ed money analogy this morning when I received a text alert that the main library at UMass Dartmouth is closing because of an air conditioning failure—again.  I wonder how often the A/C fails at UMass (Amherst).  You cannot build a great library, law school, university, or team without money.

As a society, we have to come to grips with the role of money in higher education—especially the money managed by foundations that purport independence and entitlement to opacity despite being under the direct control of supposedly transparent public universities.

We have to decide whether higher ed will continue to be part of the wealth-and-opportunity gap problem or part of the solution.  The UMass campuses east of Amherst deserve more than an occasional title.  They should all be Juventus.