The New York Times reported yesterday that as whistleblowers cash in on rewards programs set up by financial reform laws, the Obama administration, which “cracked down on corporate fraud” by promoting the programs, is reaping the real payoff. For-profit whistleblower lawyers, flush with their clients’ settlements, are shoveling money into the Obama campaign.

There are a couple of problems with this account of reality in the world of whistleblowing. Most importantly, Obama did not crack down on corporate fraud. Far from it. The Dodd-Frank reform, which set up the whistleblower rewards at the Securities and Exchange Commission (SEC), is so loaded with loopholes that whistleblowers are probably the best and only hope the public has to combat corruption and fraud in banking. 

First, Dodd-Frank does not make the obvious reform: break up the Too-Big-To-Fail banks. 

Clearly, this needed to happen and did not. Instead we got the Financial Stability Oversight Council (FSOC). Its Chairman is the Secretary of the Treasury (Timothy Geithner – enough said). Although the Treasury Department is happy to answer our questions about this committee and the ways in which it will protect us from future financial cataclysms, its account of itself does not inspire confidence. For example: in answer to your question, “What can the American people expect from the FSOC,” we have this response:

The FSOC can help provide a coordination role among the member agencies to help bring agencies together and to coordinate complex interagency rulemakings, where appropriate. The FSOC released an integrated roadmap following its first meeting that is based on each independent agency’s internal planning processes, which puts into the public domain timeframes statutory deadlines for key deliverables.

I don’t know what this means, do you?

Secondly, Dodd-Frank was supposed to protect us with the Volcker Rule. Here’s what Robert Reich tells us we need to know about that:

But under pressure of Wall Street’s lobbyists, the rule – as officially proposed last week – has morphed into almost 300 pages of regulatory mumbo-jumbo, riddled with exemptions and loopholes.

President Obama gave an eloquent speech to the UN yesterday. Obama spoke about democracy, freedom on the First Amendment:

Our Constitution protects the right to practice free speech.

Here in the United States, countless publications provoke offense. Like me, the majority of Americans are Christian, and yet we do not ban blasphemy against our most sacred beliefs. As president of our country, and commander in chief of our military, I accept that people are going to call me awful things every day, and I will always defend their right to do so.

Americans have fought and died around the globe to protect the right of all people to express their views – even views that we profoundly disagree with. We do so not because we support hateful speech, but because our founders understood that without such protections, the capacity of each individual to express their own views and practice their own faith may be threatened.

We do so because in a diverse society, efforts to restrict speech can quickly become a tool to silence critics and oppress minorities. We do so because, given the power of faith in our lives, and the passion that religious differences can inflame, the strongest weapon against hateful speech is not repression, it is more speech – the voices of tolerance that rally against bigotry and blasphemy, and lift up the values of understanding and mutual respect.

He encouraged those with power to avoid the temptation to silence dissent:

In other words, true democracy, real freedom is hard work. Those in power have to resist the temptation to crack down on dissidents.

President Jimmy Carter penned a must-read op-ed in today's New York Times, sharply criticizing the current President.  Carter and Obama share more than having held the same office, they are also both Nobel Peace Prize winners.

Here's what one Nobel Peace Prize winner has to say about the policies of another:

The United States is abandoning its role as the global champion of human rights.

Citing the Obama administration's assassination-by-drone program, the National Defense Authorization Act's (NDAA) indefinite preventive detention provisions, increased authorities for government warrantless domestic spying on innocent Americans, and the still-open-for-business and holding 169 prisoners Guantanamo Bay facility, Carter eloquently describes the consequences of the U.S.'s moving backward on human rights.

At a time when popular revolutions are sweeping the globe, the United States should be strengthening, not weakening, basic rules of law and principles of justice enumerated in the Universal Declaration of Human Rights. But instead of making the world safer, America’s violation of international human rights abets our enemies and alienates our friends.

Particularly astute are Carter's descriptions of the drone assassination program, something some Kossacks have actively supported. (See some of the comments to my prior diaries on the program here, here, and here.) Carter was particularly incensed by the number of innocent lives "sacrificed" in drone attacks:

Despite an arbitrary rule that any man killed by drones is declared an enemy terrorist, the death of nearby innocent women and children is accepted as inevitable. . . . We don’t know how many hundreds of innocent civilians have been killed in these attacks, each one approved by the highest authorities in Washington. This would have been unthinkable in previous times.

A House panel led by Rep. Darrell Issa (R-CA) voted yesterday to hold Attorney General Eric Holder in contempt after the Obama administration's first assertion of the rarely used Executive Privilege to withhold information from Congressional investigators about the botched Operation "Fast & Furious." (Full disclosure: GAP represents some of the Fast & Furious whistleblowers).

I'm no fan of Rep. Issa, and suspect this contempt citation has more to do with politics than transparency, but the Obama administration is not doing itself any favors by picking this moment and this scandal as its first assertion of Executive Privilege. To the extent the Obama administration wants to combat the recent "leak" hysteria and accusations that the White House leaked highly-classified information about sources and methods for political gain, this is a horrible moment to assert executive privilege.

The president’s move to invoke executive privilege was the first time that he had asserted his secrecy powers in response to a Congressional inquiry. It elevated a fight over whether Mr. Holder must turn over additional documents about the gun case into a constitutional struggle over the separation of powers.

But, it is not the first time the Obama administration has sought to control the flow of information to the public. The Obama administration has continually asserted the state secrets privilege to shut down lawsuits seeking accountability for Bush-era torture, extraordinary rendition, and warrantless domestic surveillance. The Obama administration's record-breaking number of Espionage Act prosecutions brought against so-called "leakers," who are usually whistleblowers, sends a disastrously chilling message to all government employees: if you reveal government fraud, waste, abuse, illegality, or embarrassing information, you risk not only choosing your conscience over your career, but also over your freedom.    

Both the Washington Post and New York Times reported on the House and Senate Intelligence Committees' recent outrage at the volume of "authorized, intentional leaks" of classified sources and methods from the Obama administration.

I have a particular interest in this issue as I represent half-a-dozen whistleblowers either being criminally prosecuted, investigated, or threatened with prosecution for making whistleblowing disclosures exposing government waste, fraud, abuse, mismanagement, illegalities, or a danger to health and public safety.

Both Democrats and Republicans on the Intelligence Committees are rightfully ticked off about the disparate treatment for so-called "leaks," especially considering the Obama administration has prosecuted more whistleblowers under the heavy-handed Espionage Act than all past presidents combined. Using the criminal justice system to target whistleblowers is damaging enough, but doing so while simultaneously "leaking" classified information that provides a political benefit is brazen hypocrisy.

Senator John McCain wrote on the Obama administration's hypocrisy:

“The fact that this administration would aggressively pursue leaks perpetrated by a 22-year-old Army private in the Wikileaks matter and former CIA employees in other leaks cases but apparently sanction leaks made by senior administration officials for political purposes is simply unacceptable,” Sen. McCain said.

The Intelligence Committees promised legislation to stop the flow of leaks:

Citing “the accelerating pace of such disclosures,” the two committees said in a joint statement that they planned to “act immediately” by bolstering legal restrictions and putting new pressure on the Obama administration to stanch the flow of secrets.

James Risen of The New York Times, James Bamford, author of The Puzzle Palace: Inside the National Security Agency, America’s Most Secret Intelligence Organization and Matthew Miller, former spokesman for the Justice Department, discussed the Obama administration’s crusade against leaks of government secrets – and against some of the journalists who report them – at the National Press Club in Washington on May 1, 2012.

I had a chance to ask Bamford and Miller a question about the State Department’s assertion that despite being available online to the entire world, the WikiLeaks documents remain “classified,” and indeed government employees can be prosecuted for referring to them. Here is his reply (it should start around the 56' mark):

American Civil Liberties Union (ACLU) Deputy Legal Director Jameel Jaffer writes in Huffington Post about the upcoming deadline in the lawsuit challenging the FISA Amendments Act of 2008, which legalized unprecedented levels of government surveillance on Americans.

. . . the administration must decide by Tuesday whether to ask the Supreme Court to intervene in the ACLU's constitutional challenge to the FISA Amendments Act . . . For a full decade, the executive branch -- first the Bush administration and now the Obama administration -- has used the standing and "state secrets" doctrines to insulate its most intrusive surveillance activities from public oversight and judicial review. But . . . [t]he courts have a role to play in ensuring that government surveillance complies with the Constitution. We'll find out on Tuesday whether the Obama administration is finally willing to let the courts play that role.

[The FISA Amendments Act] . . .  is scheduled to sunset in December, which means that the litigation will unfold against the background of a congressional reauthorization debate.

The congressional and legal battles on warrantless surveillance also come with a more informed public, thanks in part to Jane Mayer's extensive New Yorker story on National Security Agency (NSA) whistleblower Thomas Drake. Senators Ron Wyden (D-OR) and Mark Udall (D-CO) also warned that the public would be stunned and angry when we found out about the Justice Department's secret interpretation of another spy provision (PATRIOT Act Section 215) radically expanded in the aftermath of 9/11.