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Uncle Sam Pays Secret Police to Spy on Citizens & Corporations
Do you think that only totalitarian regimes employ secret police, that only autocrats work diligently day and night hoping to catch citizens violating an intricate web of laws that strip them of their privacy, property, and peace of mind? Do you believe that citizens of enlightened democracies never have to worry that some of their trusted friends and associates might be undercover government agents collecting evidence against them?
In a deft public relations move aimed at expanding the ranks of citizens willing to become paid government informants, the IRS recently granted a $104 million “whistleblower” award to convicted felon Bradley Birkenfeld for the patriotic act of turning in both his employer and his customers for tax evasion. That comes to over $3 million a month for each of the 30 months Brad spent in prison for financial crimes he both witnessed and helped carry out.
Serves them right, you say—no sympathy for fat cat tax evaders!
OK, how about the $96 million paid to a former pharmaceutical factory manager for outing her employer’s manufacturing deficiencies, a charge that was ultimately “settled” for $750 million rather than litigated?
It’s only right—confidence in our medicines must not be comprised by corporate greed!
Well, then how about the exterminator who was awarded $5 million for spraying approved insecticide outside a home—but did it when the ground was still wet? Or the ambulance driver awarded $1 million for turning in his employer for incorrectly filing for Medicare reimbursement for transporting Medicare beneficiaries to their dialysis treatments?
Few would take the position that what these companies and individuals were doing wasn’t wrong, against rules, or both, subjecting them to fines and punishment. But think of all the tax statutes, executive orders, mandates, laws, and regulations under which every business must operate. Some are crystal-clear, but others so murky and convoluted that an army of lawyers and accountants can barely decipher them.
Imagine the power that an all-seeing, all-knowing government would have were it able to recruit enough eyes and ears to monitor each and every infraction, selectively deciding whom to prosecute whenever it became politically expedient or attractively profitable.
Think about the pressure on corporate executives to quickly settle “whistleblower” charges rather than mount an expensive and protracted fight to prove their innocence and salvage their reputation. Even if ultimately exonerated, businesses that fight back rather than roll over would surely earn the enmity of regulators that control their business—not to mention the negative impact on their stock price, shareholder lawsuits to follow.
Now think of Sen. Charles Grassley (R-Iowa), who sponsored the 2006 law that handed such unchecked power to the IRS—ostensibly to root out tax evaders but since then expanded to include an ever widening array of crimes against the state.
Political consultant James Carville once said, “Drag a $100 bill through a trailer park, you never know what you’ll find.” Think about dragging million-dollar bankrolls in front of the entire citizenry, many of whom have debts to pay, scores to settle, a divorce festering, or a hankering to take a shortcut to the good life.
Take a look at the expanding number of websites the government uses to recruit your family, friends, neighbors, and employees to become paid informants. Google “Whistleblower lawsuit” and marvel at the legions of contingency-fee lawyers trolling for clients hoping to nail someone—anyone—who may have fallen afoul of some paperwork requirement with the potential to turn every business into a criminal enterprise.
Welcome to Amerika 2012, which arrived largely unnoticed by the self-styled privacy advocates who have made it illegal for the college cashing your tuition checks to inform you that your child has a drug abuse problem, is harboring suicidal thoughts, or has decided to have an abortion. Or to forbid you from asking whether the job applicant you are considering is dying of an expensive communicable disease, has a history of alcoholism, or has sued her last three employers. We all have a “right” to privacy, but not from Uncle Sam when he’s on the money hunt.
What would Thomas Jefferson make of all this? Did he help found our nation upon the ideal of citizens turning on each other while in the secret employ of an unchecked central power? Do we really want to extend the ability to bribe informants—using their victim’s own money—to empower every czar, regulator, and bureaucrat in Washington to more effectively monitor and control every aspect of our lives? With no limiting principle, we seem to be headed that way.
Two centuries ago our forefathers took up arms against King George because “He has erected a Multitude of new Offices and sent hither Swarms of Officers to harass our People, and eat out their Substance.” Today, the heirs of these patriots line up waiting to be shorn like sheep, as the rats count their lucre. Think about it where this goes from here. And be ashamed.
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Bill Frezza is a Fellow at the Competitive Enterprise Institute and a Boston-based venture capitalist. If you would like to subscribe to his weekly column drop a note to firstname.lastname@example.org. If you would like Bill to speak at your trade group or corporate function, drop him an email at email@example.com.