Monthly Archives: May 2014

SeaTac’s minimum wage experiment — and ours

David Henderson and Matthew Hurtt have roundups of the serious side effects already being felt in the small community of SeaTac, outside of Seattle, which at unions’ behest adopted a minimum wage of $15/hour for many private employers. Job cuts, severe cuts in fringe benefits, and transfer of work to managers are just the start.

SeaTac serves as a sort of protected hothouse experiment: it hosts the Seattle area’s only international airport, and thus enjoys something of a captive-audience setting for service businesses. Yet even in a place like that the very bad idea of a $15/hour minimum wage has had plenty of immediate unwanted consequences. Now imagine foisting the same experiment on the entire state of Maryland, a state whose jobs, shops and residents all have a high degree of mobility. That’s what some in Annapolis wanted to do.

Our Facebook thread on the stories resulted in a first-rate proposed state motto for Maryland: “The State Small Enough To Escape On Foot.”


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HB 867, the Maryland False Claims Act, and the District 4 race

I’ve been writing and speaking out for years about the evils of the federal False Claims Act and its state-level equivalents, but I certainly never expected the law to wind up becoming an issue in my hometown race for state senator. Yet that’s what has happened in Maryland’s District 4, where as Bethany Rodgers of the Frederick News-Post reported, candidates David Brinkley and Michael Hough have traded charges vigorously on the issue. Del. Hough (unusually for a Republican) crossed over to support the proposed Maryland version of the FCA in this year’s legislative session, but the bill failed on the last day of session when Brinkley, considered a master of the intricacies of the legislative process, used a procedural maneuver to kill the bill single-handedly, bitterly disappointing the bill’s sponsors, liberal Montgomery County Democrats Brian Frosh and Sam Arora, as well as the state’s trial lawyer lobby, which had made the bill a priority.

Del. Hough defended his position on Facebook as follows:

And at Red Maryland, a blog that has endorsed Hough, Brian Griffiths seeks to defend Hough from what he calls “bizarre accusations that he has sided with trial lawyers” in supporting the FCA, though such accusations would seem no more than baldly true (the question is hardly whether he sided with them, but whether he was right to do so). “I have absolutely no idea on what planet it is a conservative ideal to oppose harsher penalties for people who wish to defraud the people out of taxpayer funds.”

So what do these laws do, and why have they turned into a flashpoint for intense opposition from the business community, to the point where the Maryland Chamber of Commerce would vocally oppose HB 867 as “burdensome and unfair” in its provisions and Maryland Business for Responsive Government would treat it as a key vote, to Hough’s disadvantage?

Based on a Civil War era statute but drastically expanded in 1986 into its modern form, the False Claims Act allows freelance informers to accuse entities dealing with the government of fraud, and then pocket a hefty share of the proceeds of a resulting judgment or settlement. To encourage suit-filing, the law awards treble or other multiple damages, attorney’s fees, stiff statutory damages and other enhancers. The model in effect is privatized law enforcement — what could go wrong? And indeed the idea appealed for a time to many modern Republicans, even Ronald Reagan — until actual experience began to show its flaws:

  • The law has made rich various employees who participated in frauds themselves, or who failed to inform higher-ups of their discovery of accounting problems (which of course might have upset the chance of bagging an FCA award for themselves). It has even provided a reason to *not* report fraud too quickly, as in the famous case of a GE employee later accused by chairman John Welch of having “sat back and waited in the weeds so the damages would mount.”
  • While the law has been used against many genuine frauds, it also gets deployed against what many would see as simple differences of opinion in complicated, high-stakes areas of government contracting — reimbursement formulas, overhead rates — as well as against industry customs accepted as normal by the players and not challenged by the government at the time. Because stakes are so high — including treble or other multiple damages — defendants often settle for some fraction of the demand. The law thus incentivizes actions based on gray areas of contracting regulation with high stakes over actions based on definite or classic frauds where recovery will not be large (say, because the fraudster will be bankrupt.)
  • Animal rights activists have used the law to go after a cancer researcher who received federal funds for animal research, supposedly on the theory that he misrepresented the results of his research. That’s one of many instances in which the law is used to pursue vendettas or for extra legal leverage in disputes between private actors — say, between labor unions or community organizers and the companies they attack.
  • A hedge fund was found to have sold short the stock of a target firm (betting that its stock would fall) and then filed a False Claims Act naming the company, predictably bringing about the very stock drop it had bet on.

By the time the business community had begun to mobilize to point out the issues of fairness and practicality at stake, the law had made a group of lawyers immensely rich, and they have formed the nucleus of a powerful lobby with many allies in elected office — mostly Democrats, but also including a Republican here and here — to defend the law and push for its further expansion. By 2009, when another expansion was proposed, Hans von Spakovsky and Brian Walsh of the Heritage Foundation were writing that: “Tort lawyers are about to get another big payoff from Congress and the Obama administration for the hundreds of millions of dollars they contributed to candidates in the last election cycle (over 75% of which went to Democrats). … amendments to the federal False Claims Act that will hurt our economy but make the trial lawyers very happy indeed.” (full report). Inserting FCA-like provisions into the Dodd-Frank bill was a key objective of liberal Democrats, and their success in doing so is seen by many businesses as among the worst features of that law.

The proposed Maryland version would have gone much further — with consequently even greater risk of abuse — than the federal FCA or its various state equivalents. For example, it had a much less usable statute of limitations, meaning that clever lawyers could reach back to sue over long-distant supposed misdeeds. And as the Council on State Taxation warned, because it had vague language that did not exclude tax disputes, it might be seized on to justify suits by Lawyer A demanding a retroactive hike in the tax bill of Company B — plus multiple damages, lawyers’ fees, etc. — and a court might agree to let such a claim go forward.

Del. Hough does not seem to have been very persuasive in convincing Republican colleagues that HB 867 represented the true conservative position.  (Virtually every Democrat voted for the bill.)  Every single Republican member of the Senate joined in siding with Sen. Brinkley’s position against Del. Hough’s, and so did the great majority of Republican delegates, including every other GOP member of the Frederick County delegation. (That includes Hough’s own slate-mate Kathy Afzali, as well as Kelly Schulz and Patrick Hogan.) Of big-time conservatives in the House of Delegates, virtually every one sided with Brinkley’s position over Hough’s, the most notable exception being Del. Michael Smigiel of the Eastern Shore.

Smigiel, it should be noted, has the good excuse of being a trial lawyer in his day job.



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Montgomery County to put more police in schools

Donna St. George in today’s Washington Post reports:

Police will be posted in all 25 Montgomery County high schools next fall as county leaders bolstered the schools’ security force in a final budget approved last week.

The budget for the year that begins July 1 includes 10 new school resource officers (SROs), who will join 12 school police officers in place and three supported by the cities of Rockville and Gaithersburg and the county sheriff’s department.

This will be expensive, of course, but the PTA backed it, and competing Fairfax and Loudoun counties put SROs not only in high schools but even in middle schools. Prize for the least convincing argument goes to PTA officer Susan Burkinshaw:

“What small town of 3,000 people doesn’t have an officer in it?” Burkinshaw asked. “To not have an officer on premises to help manage what is like a small city is ludicrous.”

Of course a small town of 3,000 will face a range of police challenges that schools don’t, including highway accidents and ticketing, closing time at the bar, domestic incidents and so forth. For that matter, countless towns of 3,000, and often much larger, are served by county sheriff’s departments or cooperative neighboring jurisdictions who may be able to respond in minutes.

The Post does briefly acknowledge that expense aside, there are critics who believe introducing police officers into schools, particularly when the schools have had little or no record of violence or other danger to students, does more harm than good:

Nationally, civil rights advocates say a police presence in schools often leads to a spike in law enforcement referrals and arrests on campus for misconduct that would typically be handled by a principal. Montgomery officials say their program will not result in the criminalizing of minor school misbehavior.

With a focus on prevention and intervention, “I think it’s going to mean more compassion for kids,” [council president Craig] Rice said.

Because when police with handcuffs and nightsticks become a resource for locker checks and petty disciplinary offenses, compassion is what we have come to expect, right?

The Sentencing Project has a fact sheet, “The Facts About Added Dangers of Police in Schools,” that I hope folks in Montgomery County will take a look at. At least that way they can’t say they weren’t warned.



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Treating Maryland motorists badly

The National Motorists Association is out with annual state rankings on which states look after motorists’ interests fairly in its view. Maryland comes in among the worst in the country: only four states (NY, DE, NJ, VT) and D.C. are worse.

What accounts for the poor showing? Maryland actually does not do too badly on the dimensions of legal protections for motorists (mostly procedural rights for the accused) and regulatory intensity (the degree to which stiff penalties and prohibitions are reserved for the most dangerous driver behavior).

Unfortunately, we have very poor ratings in the survey’s other three categories. Our cost of driving, as influenced by government policy, is very high — that would include things like the gas tax, tolls, registration and insurance. Only New Jersey, Vermont, and D.C. are worse in the extent to which fees and taxes paid by motorists are diverted to non-road uses, including but not limited to transit. ToPackardWheel Maryland, your car is a cash cow, and someone else is probably getting the milk.

Worst of all? The category known as enforcement tactics. According to NMA, this is a measure of “the degree to which police use command and control tactics intended more to generate revenue than to enhance public safety. What is the extent of speed traps, roadblocks, red-light cameras, speed cameras, and federally funded ticket blitzes? Is the annual volume of traffic tickets reasonable? Are work-zone speed limits and penalties dependent on workers being present?” As NMA sees it, no state — only the District of Columbia — is worse off on this dimension than we are.

No doubt Maryland’s poor showing has some connection with our being in the crowded Northeast, since of the ten worst scorers, all but Illinois (7th worst) and Florida (8th) are in the country’s upper right.  But note that Massachusetts, New Hampshire, and Connecticut, all relatively crowded northeastern states, rank solidly in the middle of the pack, while Maine scores better than average.  Maybe Maryland’s government will never leave drivers as free as those in North Dakota or Wyoming, but how about at least reducing the harassment to, say, Massachusetts levels?


Photo Credit: Pixabay.

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The Post’s Hogan endorsement

Asking the Washington Post editorial board to weigh in on a Maryland Republican governor primary is like asking me to review an Indian cricket match. I could accurately report some of the goings-on, without really grasping the bigger picture.

So it is with the Post’s endorsement of Larry Hogan. What does the Post consider the chief points in Hogan’s favor? “Mr. Hogan offers the best hope for a real race in November” because he has “distanced himself from more doctrinaire Republicans” and  “[positioned] himself to the left of the GOP’s bomb-throwers.” In particular, he “has distinguished himself from his main primary rivals by toning down the anti-tax brimstone and acknowledging the reality that Maryland is not Texas and a Republican governor will have to meet Democratic lawmakers in some conciliatory middle ground.” Also, it seems he is “genial” and his father was a Congressman in the 1970s.

As it happens, I am part of what should be the target constituency for an appeal like this. I do think Maryland Republicans need to keep constantly in mind that the state is effectively part of the Northeast these days in its voting preferences, that most of its voters are not radically discontented at present with the way the Democrats have been running state government, and that if a Republican manages to get elected governor any time soon (which I do think is possible) he or she will need to know how to work with  a heavily Democratic legislature. And I agree that many party nominees come off as doctrinaire and hard to elect unless they are running in extremely GOP-loyal districts. While the Post does not mention it, I also like that Mr. Hogan is the quietest of the GOP candidates on social issues.

As the Post notes, Hogan has kept aloof from the MD-GOP and its local base, instead campaigning as if he were already the party’s nominee. Yet he’s “vague about the targets of spending trims,” and not just on those. “Given the time he’s had to plan his run, his campaign is glaringly short on policy specifics, and his views on education, health care and the environment are gauzy at best.” That absence is all the more curious because of the innovative way in which Mr. Hogan chose to prepare his run for governor. That method was first to build a nonprofit group, Change Maryland, that might easily have been mistaken for a policy-oriented research outfit,  and then abruptly turn it into a campaign, so that people who had signed up for the CM email list suddenly found themselves getting what looked like successor mailings from Hogan for Governor. (The Hogan people say this was all done on the up-and-up through an arms’-length buyout of CM assets, which has not kept his two main opponents from filing an ethics complaint.) Despite the Post’s claim to discern now in Hogan a “conciliatory tone,” especially on taxes, and a “reluctance to declare war on the Democratic establishment,” Change Maryland actually did spend a lot of its time inveighing against both taxes and the Democratic establishment.

Mr. Hogan’s main GOP opponents, Harford County Executive David Craig and Del. Ron George (R-Anne Arundel), are by contrast running hard as if they were in a Republican primary. They are traveling the state with their running mates spending time with base Republican voters, reminding constituents of their credentials as conservatives, and, yes, trying to show some vision of where they would take the state if Democrats somehow fall asleep at the switch and let them. Since Maryland is now what is known as an early primary state, there will be four and a half months after primary day to turn to themes more likely to connect with centrist voters, independents, and others not well represented in GOP primaries.

The Post appears to accept the postures the candidates are striking at this stage as sure indications of how they would campaign later and how they would govern if elected.  It entirely fails to inquire how the three have actually behaved in office or, in Hogan’s case, not in office (though he did hold an important post back in Gov. Bob Ehrlich’s administration). David Craig has served two terms as Harford County executive, and if he came across as some sort of “bomb-thrower” in that capacity, or was unable to work with Democrats, I’d be very surprised. When I heard Del. Ron George speak in Frederick, he made a point of pride of describing how he had found ways to cooperate with Democrats to get legislation passed in Annapolis, rather than just vote no on everything. Does Mr. Hogan take the prize for being the most “genial” of the three in private settings? I’m going to go out on a limb and guess that he does not.

Mr. Hogan had a lead in the GOP polls last time I checked, he has a decided money advantage, and he benefits from his opposition being split. What he has not done, so far as I have been able to tell, is to close the sale, with an unusually high number of Republican primary voters remaining undecided. We’ll see whether he succeeds in doing that over the next four and a half weeks.

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Whoops: Frederick News-Post has to fix column that attacked Charles Murray

On May 12, as part of a column about how Republicans are supposedly waging a war on women, Frederick News-Post community columnist Patricia Weller made some strikingly ill-informed drive-by assertions about Charles Murray, a prominent public intellectual who happens to be a resident of Frederick County. The result was embarrassment for the newspaper, which published a letter today from Catherine Bly Cox that begins as follows:

Patricia Weller’s May 12 column, “Thinking outside of the kitchen,” requires correction. It is full of untruths about American Enterprise Institute scholar Charles Murray, who is a resident of Burkittsville, and my husband.

Most of the quotations offered by Ms. Weller are the fabrication of a satirical website called Newslo. Newslo allows you to push a button that highlights the facts woven into their satire. Women have undeveloped brains and deserve lower pay? Anyone can visit the site and discover that this was written by the website, not by Charles, who has never, anywhere, said any such thing.

Charles is not educational adviser to the Texas gubernatorial nominee Greg Abbott. He had never even heard of him until recently, when someone reported that Mr. Abbott had once cited Charles’ work in a footnote. That constitutes the entire connection.

Cox goes on to detail other misrepresentations in the column. The News-Post republished the piece with substantial editorial changes to remove the whoppers noted in Ms. Cox’s letter. That’s nice. It would be even nicer if the paper chose to exercise more editorial judgment over what went into its columns in the first place.


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Sen. Brinkley’s economic record

I’ve got a letter to the editor in the May 23 Frederick News-Post. I write:

The latest annual ratings from Maryland Business for Responsive Government are out, and both candidates in the District 4 Senate GOP primary get high ratings, at 92 and 83 percent, for supporting free-market, limited-government policies. But it just goes to show how ridiculous it is for the candidate with the lower 83 score — Delegate Michael Hough — to launch a mailer and website attacking the candidate with the higher 92 score — Sen. David Brinkley — as some kind of liberal Obama clone and “Martin O’Malley’s best friend in Annapolis.”

Of the five Republicans in the current Frederick County delegation to Annapolis, Delegate Hough actually has the lowest MBRG rating; delegates Kelly Schulz and Kathy Afzali both scored 100, and Delegate Patrick Hogan, 92. Delegate Hough is entitled to his own opinions, of course, but it ill behooves him to accuse David Brinkley of being some kind of liberal when Senator Brinkley scores higher free-market ratings than his own both for the past year and cumulatively over the full period of his legislative service.

Walter Olson, New Market


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Overlawyered Maryland roundup, May 17

I’ve been focusing occasional coverage on Maryland issues at my blog Overlawyered. Here’s the May 17 entry:

  • Civil libertarians won victories last term in restraining open-ended use of police surveillance, search and seizure: access to emails and social media postings older than six months will now require warrant, as will location tracking; new restrictions also placed on use of automatic license plate reading system data [ACLU 2014 policy report]
  • Bill that would have banned weapons on private school grounds, whether or not the school itself had objection, failed to make it out of committee [SB 353, earlier herehere]
  • Judge overturns state union’s takeover of Wicomico County teacher’s association [Mike Antonuccimore]
  • Vague definitions of “trafficking” + asset forfeiture: what could go wrong with Del. Kathleen Dumais’s plan? [ReasonWYPR “Maryland Morning”,more (legislative agenda of “trafficking task force”)]
  • In his spare time, Maryland Commissioner of Labor and Industry Ronald DeJuliis apparently likes to engage in urban beautification of the sign removal variety [Baltimore SunQuinton ReportDaily Record (governor’s office considers criminal charges against appointee “personal” and relating to “after hours”)]
  • Behind the controversy over Rockville firearms dealer’s plan to offer “smart gun” [David Kopel]
  • Baltimore tightens curfew laws, ’cause criminalizing kids’ being outside is for their own good [Jesse Walkerfollowup]
  • In Montgomery County, police-union demands for “effects bargaining” were a bridge too far even for many deep-dyed liberals, but union hasn’t given up yet [Seventh State]

You can find Overlawyered coverage of Maryland issues at this link.

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Frederick on “top ten U.S. downtowns” list

historic buildings in Frederick MDLivability/scenic drives dept.: Frederick is ranked among the nation’s top ten downtowns in this list, which has many quirky/unexpected entries. Alexandria, Va. makes the list too.

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My favorite local food from this part of Maryland and adjacent Pennsylvania is puddin’-and-hominy. Puddin’ consists of cooked-down meat scraps that is a lot like scrapple without the grain filler and is too strong-tasting to eat by itself (for me at least). Instead you cook it alongside something starchy, the preferred vehicle being cooked white hominy, which is very bland by itself. Combine some of each on a fork and suddenly you have something much better than either one alone. (It helps if you already love scrapple, as I do.) Not sold in chain stores, so far as I’ve seen, but common at firehouse breakfasts and available at better local markets such as Wagner’s in Mt. Airy and Trout’s in Woodsboro. More here.

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