Judicial Oversight of the Bailout Plan? Fuggedaboudit
Posted by Dan Slater
Congress is still engaged in a tug-o-war over the parameters of The Bailout Plan ( http://online.wsj.com/article/SB1222005737...tml?mod=testMod )— the Bush administration’s proposal to provide the Treasury Department with $700 billion to take toxic assets, such as bad mortgages and mortgage-related securities, off Wall Street’s hands. (Can we still call it Wall Street?) But one aspect of the deal looks clear: According to draft legislation ...
( http://www.nytimes.com/2008/09/21/business...jNHJbAalWsTpRFg ),
... agencies and courts are specifically barred from reviewing Treasury Secretary Hank Paulson’s handling of the bailout.
The WSJ’s Jess Bravin writes:
http://online.wsj.com/article/SB1222041564...icle-outset-box
If the Bush administration has its way, anyone harmed by the Treasury Department’s handling of the $700 billion Wall Street bailout might have no remedy. . .The effort to block court review reminded some congressional staffers of the Bush administration’s response to the Sept. 11, 2001, terrorist attacks, when it issued language and took steps to keep judges from second-guessing decisions about wiretapping and detention of suspected enemy agents. . .In that crisis, and apparently in this one, the administration argued that exposing to court review actions made on the fly would deter officials from taking risks and responding quickly.
According to Kilpatrick Stockton’s Mark Levy, who heads the firm’s Supreme Court practice, the draft legislation would foreclose the possibility that claimants could sue on grounds that the Treasury Department undervalued their assets or didn’t fairly consider a seller’s situation. However, he said, a court might hear a constitutional claim, such as allegations that the method of deciding who gets paid or how much assets are worth violates the Fifth Amendment’s due process clause.
For more on the legal limitations of The Bailout Plan, go to SCOTUS Blog’s No Role for Court in Bailout Plan.
http://www.scotusblog.com/wp/analysis-no-r...n-bailout-plan/