[In]Securities Guest Blog: Manicula's Gopher by Aegis Frumento Esq

June 25, 2020

Manicula's Gopher

The Roman Emperor Gaius Julius Caesar Augustus Germanicus was weird. You've heard of the Emperor Gaius by another name. When he was kid, they outfitted Gaius in a child-sized military uniform, including footwear. The soldiers that he tramped around with nicknamed him "little boots," and he never grew out of it. Little boots, in Latin, is Caligula.

Caligula loved a horse, Incitatus. Not, perhaps, the way Catherine the Great is ill-rumored to have loved hers, but well enough to have built him a marble stable with ivory furnishings, appointed him slaves, and had him attended to by the elite praetorian guard. https://en.wikipedia.org/wiki/Incitatus. In what can only be described as the First Century equivalent of the dick pic, he had a statue made of him riding Incitatus bareback. https://www.horsenation.com/2019/03/15/incitatus-the-og-pampered-pony/

Caligula ruled a mere four years before he was murdered in 41 CE. He was killed after announcing that he would appoint Incitatus a Roman Senator. After the assassination, one hypocrite Consul bloviated, "Our first duty now is to give the highest possible honors to those who have killed the tyrant," all the while still wearing Caligula's loyalty ring. He'd feel right at home in our own Senate. No one knows exactly why Caligula died, but I like to think that certain Senators feared Incitatus would upstage them as the more authentic horse's ass.

No one, however, seems to have doubted that Caligula really did have the power to make a horse a Senator. He was the emperor, after all, and had the power to do anything he pleased. But everyone still considered it outrageous, a breach of "norms," we would say today. Just because you have the power to do something, doesn't mean you should. In those days, you couldn't impeach an emperor, or vote him out of office. Murder was the only option, and so Caligula fell.

We'd like to think that those days of absolute power are long gone, at least here. But nothing is gone forever. All you need is someone to argue otherwise. Which brings me to Attorney General Bill Barr. Barr has in the past months been the moving force behind a series of moves designed to get DOJ off Donald Trump's back. He dissed the Mueller Report, and Mueller himself. He replaced the US Attorney in DC who was prosecuting Roger Stone. He moved to dismiss the charges against Michael Flynn. Now he's ousted Geoffrey Berman, the US Attorney in New York who was investigating Trump's business dealings.
Some say that Bill Barr is a corrupt Trump enabler, but not me. Barr is very smart, very well read, very logical. Barr is pursuing the so-called "unitary executive" theory of Constitutional law to absurd conclusions. That blind pursuit of logic to its dead end is what makes Bill Barr dangerous. He has a logical mind, but only that, when what he really needs is common sense.

Barr got his job by writing an unsolicited 19-page memo to DOJ (to the President, really) explaining that it was constitutionally impossible for the President to obstruct justice by ordering prosecutors to investigate one person rather than another. "The Constitution itself places no limit on the President's authority to act on matters which concern him or his own conduct. . . ..  He alone is the Executive branch. As such, he is the sole repository of all Executive powers conferred by the Constitution." https://int.nyt.com/data/documenthelper/549-june-2018-barr-memo-to-doj-mue/b4c05e39318dd2d136b3/optimized/full.pdf. In other words, all power to enforce the law is given into the hands of the President, to do with as he will. If he wants to prosecute his enemies and pardon his friends, no mere Justice Department can tell him he can't. 

Two things can be said about Barr's theory of the unitary executive. The first is that it is logically correct. Article 2 of the Constitution -- the one that Trump said no one had ever heard of -- does in fact lodge all executive power in the person of the President.  Everyone else in the executive branch works for him, and therefore must do his bidding. Barr's memo makes it sound like he discovered this. He didn't. We all knew it. 

The second thing that can be said is that to take that correct principle to its ultimate logical conclusion is nuts. 

My dozen years in Catholic schools gives me some insight into this. Bill Barr is a throwback to pre-Enlightenment Catholicism. I'm not talking about church doctrine or dogma, but of a way of thinking through problems that privileges logic over common sense.

In his recent speech at Notre Dame Law School, he spoke of natural law as "a real, transcendent moral order which flows from God's eternal law - the divine wisdom by which the whole of creation is ordered. The eternal law is impressed upon, and reflected in, all created things." https://www.justice.gov/opa/speech/attorney-general-william-p-barr-delivers-remarks-law-school-and-de-nicola-center-ethics. In another speech he emphasized that "Experience teaches that, to be strong enough to control willful human beings, moral values must be based on authority independent of man's will.  In other words, they must flow from a transcendent Supreme Being." https://www.justice.gov/opa/speech/attorney-general-william-p-barr-delivers-remarks-2020-national-religious-broadcasters.  

What Barr is channeling here is the old idea that came to be known as The Great Chain of Being. The logic goes like this: God is all powerful and all-good. He created the world. That He created the world this way rather than another way implies that He couldn't make it any better. A differently arranged world would be worse. That's why this is the best of all possible worlds.

And of course if God can't make the world any better, neither can we. "The campaign to destroy the traditional moral order has brought with it immense suffering, wreckage, and misery," Barr said at Notre Dame. "While we think we are solving problems, we are underwriting them."

That idea, that we only make things worse when we try to make them better, is one consequence of The Great Chain of Being. The other is hierarchy. Feudal systems reflected the idea that authority flowed from top to bottom, from God to the king to the nobles and so on. Kings ruled by Divine Right. The King could do no wrong; the Pope is infallible. It's not that the King or the Pope can't make mistakes in an abstract sense. It's that they have the final word in their domains. Their decisions can't be questioned, simply because there's no one to countermand them. As Bill Barr's hero, St. Augustine, once said, "Rome has spoken; the case is concluded."

That is inevitably where the "unitary executive" theory leads, to Richard Nixon saying "if the president does it, it's not illegal." Or to Donald Trump saying he can do anything he wants. It's true. But it's true in the same way that Caligula could appoint a horse to the Senate. Logical systems taken to their conclusion all too often lead to crazy results like that. The logic isn't wrong, but the logician is off his rocker to take us there. 

The President may well have the Constitutional power to prosecute his enemies and pardon his friends. But layered on top of naked constitutional law are all the customs and practices that common sense tell us must be honored if we are to have a decent society. Those customs and practices are what we call "norms." Once you start stripping away the norms that keep unfettered constitutional power in check, then all you are left with is unfettered constitutional power. And as any lawyer worth his salt will tell you, when the law is all you have left to guide your conduct, you're in deep horse manure.

General Barr does not appear to believe it is his job to nurture norms. But it is. Donald Trump always cared only about what he could legally get away with, which is why norms don't count with him. Bill Barr should know better. Those habits of good Presidential conduct are all we have to check a raw constitutional power that otherwise allows Presidents -- of either party -- to be tyrants. Barr's theory of the unitary executive, which gives norms no weight, promises a slow violence to our republic whose damage we will not easily repair.


Aegis J. Frumento

380 Lexington Avenue
New York, NY 10168

Aegis Frumento is a partner of Stern Tannenbaum & Bell, and co-heads the firm's Financial Markets Practice. Mr. Frumento represents persons and businesses in all aspects of commercial, corporate and securities matters and dispute resolution (including trials and arbitrations); SEC and FINRA regulated firms and persons on regulatory compliance issues and in SEC and FINRA enforcement investigations and proceedings; and senior executives of public corporations personal securities law and corporate governance matters.  Mr. Frumento also represents clients in forming and registering broker-dealers and registered investment advisers, in developing compliance policies, procedures and controls, and in adopting proper disclosure documents. Those now include industry professionals looking to adapt blockchain technologies to finance and financial market enterprises.

Prior to joining the firm, Mr. Frumento was a managing director of Citigroup and Morgan Stanley, a partner and the head of the financial markets group of Duane Morris LLP, and the managing partner of Singer Frumento LLP.

He graduated from Harvard College in 1976 and New York University School of Law in 1979. Mr. Frumento is a frequent author and speaker on securities law issues, and is often quoted in the media on current securities law developments.

NOTE: The views expressed in this Guest Blog are those of the author and do not necessarily reflect those of BrokeAndBroker.com Blog.

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