Although so far these events have been relegated to the financial pages, this is not just some legal technicality. With the Dow Jones Industrial Average bouncing like a pingpong ball, the integrity of the American markets has taken on even greater importance. Volatility begets fraud, as when the tech bubble burst. That is why the inside-the-Beltway battle was so fierce over whether the White House and its lawyer, Solicitor General Paul Clement, would come down on the side of the victims or of Wall Street. That is why, when Clement declined to file the brief recommended by the SEC, others were not so reticent, including past SEC chairmen, heads of the House banking and judiciary committees and 35 state attorneys general, Republican and Democrat, all filing briefs in support of investors and “scheme liability” � holding accountable liars and enablers alike.
And that is why it was more than just an unfavorable judgment call when the Bush administration, rejecting the advice of senators like Arlen Specter, R-Pa., and Christopher Dodd, D-Conn., and ignoring the formal vote of its own SEC and its Republican chairman, Chris Cox, recently chose to support those who commit fraud from behind the curtain. Indeed, just how and why that decision was reached presents a cautionary tale. It reflects the serious threat posed to the rule of law by what historian Kevin Phillips has described as “the fusion of money and government.”
