The Michigan Militia Corps'

Weekly Update
Internet Edition

Volume 5, Issue 33

Week of September 21, 1998

No Bill of Attainder or ex post facto Law shall be passed.

Article 1 section 9 US Const

A bill of attainder may be defined to be an Act of Parliament for putting a man to death or for otherwise punishing him without trial in the usual form. Thus by a legislative act a man is put in the same position as if he had been convicted after a regular trial. It is an act whereby the judicature of the entire parliament is exercised, and may be contrasted with the procedure by impeachment in which the accusation, presented by the Commons acting as a grand jury of the whole realm, is tried by the Lords, exercising at once the functions of a high court of justice and of a jury.

In a strictly technical sense it may be said that a Bill of Attainder is a legislative act inflicting the punishment of death without a trial, and that a Bill of Pains and Penalties is such an act inflicting a milder punishment. In the popular sense, however, the term "Bill of Attainder" embraces both classes of acts, and in that sense it is evidently used in the Constitution of the United States, as the Supreme Court has declared in Fletcher v. Peck, 6 Cranch, 138, that "a bill of attainder may affect the life of an individual, or may confiscate his property or both".

Such a bill deals with the merits of a particular case and inflicts penalties, more or less severe, ex post facto, without trial in the usual form.

While bills of attainder were used in England as early as 1321 in the procedure employed by Parliament in the banishment of the two Despensers (1 St. tr. pp. 23, 28), it was not until the period of passion engendered by the civil war that the summary power of Parliament to punish criminals by statute was for the first time perverted and abused. Then it was that this process was first freely used, not only against the living, but sometimes against the dead, the main object in the latter case being, of course, the confiscation of the estate of the attainted person.

In the flush of victory which followed the battle of Towton, Edward IV obtained the passage of a sweeping bill of attainder through which the crown was enriched by forfeiture of the estates of fourteen lords and more than a hundred knights and esquires. In the seventeenth year of that reign was passed the Act of Attainder of the Duke of Clarence in which, after an oratorical preface setting out at length the offence imputed to him, it is enacted "that the said George Duke of Clarence be convicted, and atteynted of high treason". Then follows the appointment of the Duke of Buckingham as lord high steward for that occasion to do execution. It is a remarkable fact that during a period of one hundred and sixty-two years (1459-1621) there is no record of a parliamentary impeachment either in the rolls of Parliament or in the Lords' journal. After the impeachment of Lord Stanley in 1459, for not sending his troops to the battle of Bloreheath, there was not another impeachment until that of Sir Giles Mompesson and Sir Francis Mitchell in 1621.

During the interval, covering a little more than the reigns of the house of Tudor, enemies of the State were disposed of either by bills of attainder, by trials in the Star Chamber, or by trials for treason in the courts of common law.

In the reign of Henry VIII Bills of attainder were often used instead of impeachments, as in the cases of Wolsey, Thomas Cromwell, Queen Katherine Howard, the Duke of Norfolk, and the Earl of Surrey. During that reign religious persecution was carried on rather through the legal machinery devised for the punishment of high treason as defined by the Act of Supremacy than by bills of attainder. By the Act of Supremacy, the King was declared Head of the Church with "the title and style thereof"; by the penal act which followed as a corollary thereto, it was declared that any attempt to deprive him "of the dignity, title, or name" of his royal estate should constitute high treason; under the special act providing the amended oath, it was possible to call upon anyone to declare his belief in the validity of the new title, and a failure to do so was sufficient evidence of guilt. By that legal machinery were dashed to pieces the Charterhouse monks of London, who are admitted on every hand to have been the noblest and purest of all churchmen. Even 46roude admits that they were "gallant men, whose high forms, in the sunset of the old faith, stand transfigured on the horizon, tinged with the light of its dying glory".

The legal proceedings through which the Bishop of Rochester and Sir Thomas More were brought to the block were but a repetition of what had been gone through with in the case of the Carthusians. After the Tudor time the most remarkable bills of attainder are those that were directed against Lord Strafford, Lord Danby, the Duke of Monmouth, and Sir John Fenwick.

As instances of bills of pains and penalties, reference may be made to those against Bishop Atterbury and Queen Caroline, usually referred to as the last instances of such legislation. When Queen Caroline returned to England, in July, 1830, all the ministers, except Canning, were induced to consent to the introduction in the House of Lords of a bill of pains and penalties, providing for the dissolution of her marriage with the King, upon the ground of adultery, and for her degradation. When the charges contained in the preamble came on to be heard, Brougham and Denman, by their bold and brilliant defence of the Queen, so aroused popular sympathy in her favour, by holding her up as a deserted and persecuted woman, that the ministry deemed it wise to drop the bill after the majority in its favour in the Lords had dwindled to nine. Reference is made to this case as an illustration of the nature of the procedure upon such bills.

"The proceedings of parliament in passing bills of attainder, and of pains and penalties, do not vary from those adopted in regard to other bills. They may be introduced in either house, but ordinarily commence in the House of Lords: they pass through the same stages; and when agreed to by both houses they receive the royal assent in the usual form. But the parties who are subjected to these proceedings are admitted to defend themselves by counsel and witnesses, before both houses; and the solemnity of the proceedings would cause measures to be taken to enforce the attendance of members upon their service in parliament" (May, Parl. Practice, 744).

It thus appears that, in the modern form, procedure by attainder admits the right of proof and argument. Entirely apart from the judicature of Parliament, attainder is defined by the common law of England to be the stain or corruption of blood which follows as an immediate and inseparable consequence of a death sentence. Such attainder took place after judgment of death, or upon such circumstances as were equivalent to such a judgment or outlawry on a capital crime, pronounced for absconding from justice. Conviction without judgment was not followed by attainder. The consequences of attainder were: first, forfeiture; second, corruption of the blood. The extent of the forfeiture depended on the nature of the crime for which the criminal was convicted; and by corruption of blood, "both upwards and downwards," the attainted person could neither inherit nor transmit lands. After it was clear beyond dispute that the criminal was no longer fit to live, he was called attaint, stained, or blackened, and before 6 and 7 Vict., c. 85 p. 1, could not be called as a witness in any court. The doctrine of attainder has, however, ceased to be of much practical importance since 33 and 34 Vict., c. 23, wherein it was provided that henceforth no confession, verdict, inquest, conviction, or judgment of or for any treason or felony, or felo-de-se shall cause any attainder or corruption of blood or any forfeiture or escheat.

Engered Species Act to be Amended

"[The Endangered Species Act] doesn't save endangered species. Most people assume that the Endangered Species Act is something where an animal gets in trouble, its numbers get very low, they add it to a list, the government then takes some management actions to restore it to a viable population and then it's taken off the list. The problem is that after 25 years, not a single species has been taken off the list, has been recovered and taken off the list, because of the Endangered Species Act," commented Jim Streeter of the National Wilderness Institute, a guest on "Endangered Liberties." Streeter added, "Some have been taken off, and some are in the process of being taken off, and the reason, when you look at them species by species, you find that it's never a case where the Endangered Species Act led to their recovery." Streeter discussed legislation regarding the Endangered Species Act. "Senator Kempthorne from Idaho has introduced legislation to amend the Endangered Species Act. It is, in my view, a disappointing legislation because it does not really correct the basic flaws in the Endangered Species Act.

The basic flaw of the Endangered Species Act is that it created disincentives. It punished people who provide habitat for wildlife, instead of rewarding people who provide habitat for rare species. It does this through punitive federal land-use planning. The Endangered Species Act, as proposed by Senator Kempthorne does not solve that fundamental problem. In fact, it facilitates federal land-use planning. It does some things that I think would improve wildlife habitat, and in some ways, soften the current approach, but it doesn't solve the fundamental problem, and in fact, it ratifies and extends the period in which you use punitive land-use planning to protect species.

It's just not an effective way to save species... There are lots of successful wildlife management programs in this country. And they work primarily because people want to have wildlife on their land, or because hunters wanted to have game species, or because fisherman wanted to have fish to catch. It's incentive based. But when you start having punitive command-and-control regulation, you set people against wildlife and they both lose."

Contact: Jim Streeter @ National Wilderness Institute 703.836.7404

Spreading Global Risk to American Taxpayers


As gyrations in emerging markets -- from Asia to Latin America to Russia -- cause sleepless nights for many investors, one group of politically connected and well-heeled financiers with big bets in these shaky regions can sleep better, thanks to the American taxpayer.

These well-rested folks are among the investors who have poured $3.2 billion into emerging-market funds sponsored by the Overseas Private Investment Corp., a little-known government agency that mixes private capital with government guarantees to promote U.S. foreign policy goals.

OPIC's investment flag is now planted in 140 developing countries -- from obscure spots like Moldova and Botswana to nations at the center of today's global turmoil. No matter where it goes, though, OPIC has used the promise of eye-popping returns and the protection of government guarantees to attract American investors to far-flung spots.

As capitalism has spread, so has the program. With direct foreign-aid dollars dropping in the last few years, OPIC's investment funds have become a leading tool in the Clinton administration's efforts to get fresh capital -- quickly -- to emerging democracies. When President Clinton took office, there were just two OPIC funds, one in Africa and one in Asia, with combined capital of $100 million. Today, an assembly line of OPIC funds is churning in Washington: At last count, the number has risen to 26, with roughly two-thirds of the money coming from government-guaranteed notes and the rest from institutional equity investors. By year's end, the OPIC program should swell to $4 billion.

The funds buy stakes in emerging-market businesses. They are structured so that private investors -- typically large corporations and pension funds -- can invest with limited exposure to downside risk and, if their investments work out as expected, reap enormous gains. On the other hand, should every investment in all 26 OPIC funds fail, taxpayers would be on the hook for $3.3 billion in interest and principal on the notes.

OPIC has spread its largess to many people with government ties; the ranks of the funds' managers include leading campaign contributors and former government officials. But a growing chorus of critics say OPIC funds often replicate what many in the private sector are already doing -- without government protection -- and encourage excessive risks at taxpayer peril. And to the frustration of many, OPIC runs its fund program almost exclusively behind closed doors, seeing no need to make financial details about the funds public, even though it is a government agency. "OPIC is gambling in Las Vegas with someone else's money," said James Sheehan, a researcher at the Competitive Enterprise Institute, an economic research group in Washington. "This is a subsidy for risk-taking. If these investment funds were based on the financial merits of the investments, you would not need subsidies to make them happen."

OPIC's point of view is that it is guilty as charged and proud of it. The whole point of the program -- which is modeled, very roughly, after successful domestic venture funds like Kohlberg Kravis Roberts -- is to encourage investors to go where they otherwise fear to tread and to stimulate economic development on unfamiliar turf. "OPIC is trying to induce investors to do things they are not willing to do on their own," said Robert D. Stillman, a private investor who, until last April, headed the OPIC investment fund program. "If investors are not willing to put money into Eastern Europe, we will make it attractive. We're encouraging capitalism where the U.S. has a foreign-policy interest and getting investors comfortable with these places."

OPIC funds are closed-end limited partnerships intended to build on private-sector market discipline -- and capital. Each fund has slightly different objectives and different investors. Each is required to invest in companies overseas that either do not compete directly with American businesses or that help American companies. As in other venture capital funds, the money is invested for 5 to 10 years. Right now, all eyes are on Russia. OPIC funds have committed a total of $1.5 billion to the former Soviet republics, nearly half the program's investment kitty. Eleven OPIC funds are now in this region, to the dismay of some. "It is the wrong policy to be channeling funds into those countries where their economic policies are not correct," said Ian Vasquez, a director of economic policy at the Cato Institute, a research group in Washington. "We are rewarding governments for not undertaking reforms."

But Robert Peyton, manager of Agribusiness Partners International, a $100 million OPIC fund with seven Russian investments, said the OPIC guarantee is important to him -- now more than ever. "I just got back from Russia, and we are in fundamentally sound businesses," said Peyton, whose fund has invested in a soft-drink bottler in Moscow, a sparkling-wine plant in Georgia, dairies in Moldova and Ukraine, and Russian cheese and poultry plants. "If the politicians can hold the country, we'll be OK. Our investors are glad OPIC is there. If the Russian economy survives, these investments will turn out to be good. Today the OPIC guarantee is more important than three months ago."

Charles Toy, vice president of OPIC's investment fund program, said it was too early to assess any damage. Because OPIC funds have long-term investing goals, the final reckoning is as much as a decade away. Currently, Toy said, taxpayer exposure from OPIC's Russian debt is about $400 million, because not all the money raised for these funds has been invested yet. "It's a delicate situation," Toy said. "The impact of the market turbulence is that we will be more selective. Clearly, this shows why OPIC is needed. If you want to continue to encourage foreign direct investment as the vehicle for economic reform in any particular country and there is perceived political risk, we have to support and enhance returns to encourage private sector equity to be put at play."

Those assurances emboldened the managers of Allied Capital International Small Business, at $20 million the smallest OPIC fund. It has put money into small businesses including a pasta plant and a cannery in rural Hungary and a paging company in Brazil. If all goes according to plan, the big payoff for its investors will come in 7 to 10 years, when the businesses are sold or taken public. "We wanted to do business overseas, but we didn't want to bet the bank on it," said Cabell Williams, president of Allied Capital, a Washington-based private equity firm with $650 million in assets under management. "Our investments so far have been terrific. We will have a phenomenal return. We'll make a bloody fortune. Private capital won't go to some of these places; it's too risky. Who is going to go to Botswana and invest money? You clearly need a 50 percent return to go there."

While OPIC doesn't promise 50 percent returns, it readily suggests that investors can expect 25 to 35 percent annual returns; such boasts can be made because the funds are not registered securities. A recent solicitation memorandum issued by the U.S. Embassy in Tbilisi, Georgia, for a Caucasus region fund talked of returns in the range of "25 percent plus." For every dollar of equity raised from investors -- a group that has included Archer Daniels Midland, Coca-Cola Export Corp., Citicorp and Continental Casualty -- OPIC typically provides a match of $2 in government-guaranteed notes, backed by the full faith and credit of the United States. Some OPIC notes are bought by the funds' equity investors as a way of hedging their bets; any losses on their equity investment can be cushioned by gains on their OPIC notes. (Of course, some equity investors buy no OPIC debt at all.) Other buyers of OPIC notes are banks and insurance companies that are simply interested in owning government agency debt. Whatever the motivation of the note buyers, OPIC debt serves another important purpose: to bolster returns to the equity investors. In, say, a $300 million fund made up of $100 million in equity from institutional investors and $200 million in OPIC notes, nearly all the fund's earning power goes to the equity investors. This means that their returns are far greater than what $100 million alone could have earned. Only a small portion of the profits is used to pay interest on the notes -- which generally carry a coupon rate that is about 50 basis points, or hundredths of a percentage point, above that of Treasury notes. Not surprisingly, the OPIC guarantee is a powerful lure. "There is no chance we would have thought about any of these investment funds without an OPIC guarantee," said Stanley Zax, chairman of Zenith Insurance Co. in Woodland Hills, Calif. Zenith has invested in OPIC funds in Poland, Southeast Asia and Israel. "The fact of the matter is you have OPIC protecting the debt, which is two-thirds of the fund, and then you are getting the extra venture capital leverage of that debt. Without it, there was too much volatility in those markets."

Politics course through OPIC's fund program, traceable not only in the selections of countries to receive investment funds but, often, in links to the fund managers receiving lucrative contracts. The enthusiasm with which the administration has embraced the program is evidenced by the high visibility given to it by President Clinton and Vice President Al Gore: a West Bank fund announced at a 1996 White House meeting with Yasser Arafat; $750 million pledged for two sub-Saharan Africa funds during the president's highly publicized tour in Africa this year, and a $120 million South Africa fund announced in a White House meeting in 1996 between Gore and South African Deputy President Thabo Mbeki.

But domestic politics gets OPIC's attention, too. Critics say there is a disturbing relationship between OPIC and major Democratic Party donors, often people who attended White House coffees or slept in the Lincoln Bedroom. Six funds valued at $585 million were approved in the election year of 1996 shortly after sponsors of four of them had attended White House coffees. "This program exploded just after the Clinton administration came into office," said Paul Hendrie, communications director of the Center for Responsive Politics, a nonprofit research group in Washington. "And a large percentage of them are going to people with strong political connections or who made big contributions to Democrats in the last election." Among those are David Bonderman, a Texas investor with stakes in two OPIC funds who gave $140,000 to the Democrats in 1996. His business partner, Richard Blum, is a leading Democratic fund-raiser and the husband of Sen. Dianne Feinstein, D-Calif. Bonderman's investment firm was also named manager of the $300 million Aqua International Partners fund, which has hired William Reilly, director of the Environmental Protection Agency in the Bush administration, as its hands-on manager. Like all OPIC fund managers, Bonderman's firm will get a management fee equal to 2.5 percent of the fund's assets and 20 percent of the ultimate profits, which can run into the tens of millions.

The big contributors also included New York investor Dirk Ziff, who, with his brother, gave $400,000 to the Democrats in 1996 and manages the $150 million South Asia Capital fund. Alan Patricof, a New York venture capitalist who gave $140,000 to the Democrats in 1996 and raised $600,000 more, is manager of OPIC's $40 million Israel Growth fund. And Maurice Greenberg, a leading Democratic donor, is chairman of the AIG Group, an insurance company that gave Democrats $245,000 and $213,000 to Republicans in 1996. That year, AIG was named manager of the $300 million AIG Brunswick Millennium fund, which has $30 million of AIG money in it. Toy, the OPIC vice president, said politics plays no role in the selection of fund managers, who are picked by OPIC after a solicitation and competitive review. "OPIC fund managers have to be sophisticated world players," he said. "Therefore, it comes as no surprise that many OPIC managers have acquaintances with people in government. But our final decisions are economic. No institutional investor puts $10 million to $12 million in a fund on the basis of who the fund manager knows."

Still, for all its government ties, OPIC is loath to disclose financial information to anyone but fund investors. It will not identify to outsiders the funds' investments or institutional investors, the rates of return or any fund's current net asset value. This CIA-like secrecy has frustrated even members of Congress. "Getting information from them is like pulling teeth," said Shawn C. McBurney, special assistant to Rep. Ed Royce, R-Calif., chairman of the OPIC oversight committee. "They dodge a lot and are not forthcoming. We can't get any information about this little agency that exposes the American taxpayer to enormous risk off in a corner of government." In fact, OPIC prides itself on being more like a private company than the government agency it is. "As a public agency, we are charged with transparency," said Stillman, the former OPIC fund director. "But we have to attract private capital, and private investors don't want to disclose what they are investing in."

The shards of information available, however, from interviews and some sites on the World Wide Web, show that some OPIC funds do what private investors are already doing -- sometimes with the same fund managers. And this raises questions of why an OPIC guarantee is even needed. Consider Newbridge Andean Partners, a $160 million OPIC fund investing in Colombia, Venezuela, Peru, Ecuador and Bolivia. To date, the fund has invested in a cable television venture and a gas distribution network in Venezuela. But it has also put $6 million into bonds of a financially troubled Argentine maker of Nike and Converse shoes, which is being restructured by a non-OPIC sister fund, Newbridge Latin America, owner of $80 million of its bonds. Investor interest was so strong in a $180 million OPIC fund, South America Private Equity Growth, that the fund's manager set up a second, $37 million fund to make the same investments, but without OPIC guarantees. And when OPIC set up its Russian ventures, at least 28 other venture capital funds were also putting money there. While some had ties to other United States and European government agencies, several were out-and-out private ventures, including those run by AT&T and General Motors pension funds. Junction Investors, a Boston-based group managing the $92 million Caucasus Fund, has had funds in the Caucasus and Russia going back to the early 1990s. And New Century Holdings, which has a $250 million Russian OPIC fund, also has three other venture funds in the region with more than $400 million invested and a track record there dating to 1991. Even some OPIC fund managers question whether OPIC guarantees are needed. "We're delighted not to have OPIC in our new fund," said one OPIC fund manager, who spoke on condition of anonymity. "If you have the ability to raise money any other way, OPIC is not the best use of money for the taxpayer." On that score, OPIC agrees. The agency, for instance, probably will not set up another Poland or Latin America fund, said Stillman. "Our goal is to work ourselves out of business," he said. "If we can get people comfortable with these places, they will come in and do their thing."

Some of OPIC's institutional investors have a business agenda beyond receiving an attractive rate of return on their money. At least two investors in the $25 million Africa Growth fund, Coca-Cola Export and Dresser Industries, benefited from its investments, which include aa Kenyan bottling plant for Coca-Cola and a transportation company used by Dresser. The Israel Growth fund has taken stakes in the country's burgeoning software business -- including investments in two companies that later went public in the United States. The Massachusetts Institute of Technology, an investor in the fund, said it wanted to learn more about the high-technology business in Israel, where companies like IBM, Motorola and Intel have set up shop.

Still, critics of OPIC ask if all this business frenzy, especially with American taxpayers shouldering the risk, is a proper function of government. "If these are such good investments, then private money should go in and have all the risks and the benefits," said Douglas Bandow, a senior fellow at the Cato Institute. "If private enterprises want to do this, let them."

HILLARY Clinton is in imminent danger of indictment

Electronic Telegraph Wednesday 16 September 1998, by Ambrose Pritchard

HILLARY Clinton is in imminent danger of indictment for perjury and obstruction of justice as the independent counsel, Kenneth Starr, shifts the focus of his four-year inquiry back to allegations of financial misconduct in Arkansas.

Hillary Clinton: denials Persistent reports of charges gained credence when Dick Morris, President Clinton's former confidant, said yesterday that the investigation was closing in fast.

Mr Morris, who had to resign as an adviser to the President because of his own sex scandal, said in an article in the New York Post that Mrs Clinton's actions in the Monica Lewinsky affair must be seen through the prism of her own troubles.

He wrote: "If she is facing a conviction and he is facing impeachment and everything is going to hell, don't rule out the possibility that he might pardon her and then resign, knowing the jig is up. Bottom line: Bill Clinton would give up his presidency to save Hillary from prison. Bet on it. He isn't the most faithful husband, but he is one of the most loyal."

Last week's impeachment referral on the Lewinsky scandal contained a "threateningly specific" statement suggesting that Mr Starr's inquiries into possible fraud involving a bankrupt building society in Arkansas was coming to a head.

Mr Starr noted that "evidence is being gathered and evaluated on, among other things, events related to the Rose Law firm's representation of Madison Guaranty Savings and Loan Association; events related to the firings in the White House travel office; and events related to the use of FBI files". He added the warning: "All phases of the investigation are now nearing completion."

In each of these cases Mrs Clinton is at the centre of the alleged wrongdoing, but it is the Madison Guaranty inquiry that is most ominous for her. Mr Starr's reference to the "Rose Law firm's representation" of the bank is aimed directly at Mrs Clinton, who was a lawyer with the firm before moving to Washington.

The Telegraph has learned that Mr Starr is examining Mrs Clinton's role in three episodes of possible financial impropriety in the mid 1980s: a $2,000-a-month retainer paid by Madison Guaranty; her alleged involvement in a sham land deal called Castle Grande; and the possibility that she hid money from bank regulators in a deal involving Flowerwood Farms.

In all the cases the statute of limitations for criminal activity has long passed. But Mrs Clinton could be vulnerable if she testified falsely to investigators, or subsequently before a grand jury.

An indictment of the First Lady would make for highly combustible politics in Washington. She has emerged as a figure of sympathy during the Lewinsky affair and is more popular now than at any stage of her husband's presidency.

Mrs Clinton told government financial regulators that she and her husband had not solicited the $2,000 retainer and later repeated the denial before a grand jury. But all the other participants tell a different story.

They say that it was Mr Clinton who requested the retainer, virtually begging for the money when he called on Jim McDougal, the owner of Madison Guaranty and the Clintons' partner in the Whitewater Corporation. The incident was recalled vividly because Mr Clinton, then governor of Arkansas, had been jogging and left a puddle of sweat on Mr McDougal's light blue orthopaedic leather chair.

When regulators said that Madison Guaranty should be closed because of insolvency, the Arkansas state government allowed it to remain open. This led to a $60 million loss guaranteed by the taxpayers.

One of the questions is whether Mr Clinton, as governor, intervened to keep the bank afloat while he and his wife benefited from Mr McDougal's fraudulent schemes to divert money from Madison Guaranty. In the case of Castle Grande, Mrs Clinton has sworn that she was not involved in the legal work.

Invoices from the Rose Law firm could not be found when Mr Starr subpoenaed them. They surfaced in the White House two years later, apparently with Mrs Clinton's fingerprints on them. They show that she had 14 meetings or conversations about Castle Grande.

Mr Starr is being helped by a key witness, Jim Guy Tucker, a former governor of Arkansas. A source said: "He has made it quite clear that he's not going down to save the Clintons' skins."

Here are three surprising reasons why impeachment could be good for America

From the Libertarian Party

WASHINGTON, DC -- Impeaching a president is serious business -- but booting Bill Clinton out of office could be good for the country, the Libertarian Party said today.

"No matter what you think about the allegations against President Clinton, impeachment isn't all doom-and-gloom," said Ron Crickenberger, the party's national director. "Even if it turns out to be a nasty, drawn-out process, an impeachment hearing could help protect your liberty, give you a more honest perspective on politicians, and result in more political variety."

As the U.S. House Judiciary Committee contemplates launching a formal impeachment hearing against Clinton based on Special Prosecutor Kenneth Starr's sex-and-cigars-and-perjury report -- and the beleaguered president prepares a scorched earth defense -- Libertarians are finding reasons to be cheerful about the coming political brawl.

Specifically, said Crickenberger, there are at least three surprising ways that Americans could benefit from impeachment:

1) A lengthy, fierce, partisan impeachment battle will cause paralysis in Washington, DC -- which should make us all breathe a sigh of relief.

"The only good Congress is a paralyzed Congress," said Crickenberger. "When Republicans and Democrats are busy investigating each other, they're not busy raising taxes, censoring the Internet, spending our money to bail out foreign nations, regulating business, or violating the Bill of Rights.

"Remember: Gridlocked politicians are less dangerous politicians," he said. "The longer impeachment gridlock goes on, the longer ordinary Americans will be safe from Republicans and Democrats."

2) As more sordid details emerge from an impeachment hearing, voters' respect for politicians -- and their government programs -- will continue to plummet.

"If the Clinton sex scandal has demonstrated anything, it's that politicians can't even run their own lives properly. Why in the world should we give them the power to run ours?" asked Crickenberger.

"As an impeachment process drags on, and politicians hurl more mud at each other, the little faith we have left in government will trickle away. Voters will realize that they can't trust pathetic, flawed, self-destructive, hypocritical politicians -- whose lust for power is apparently matched only by their lust for vice, deceit, and personal gratification."

3) Impeachment hearings will showcase the need for a new political party.

"How much more crime and corruption will Americans tolerate from Republicans and Democrats?" asked Crickenberger. "Those two parties have book-ended the last 25 years with the two great scandals of this generation: Watergate and Fornigate. And sprinkled between were more mini-scandals than you could shake a subpoena at -- from Iran/Contragate, to Whitewatergate, to Gary Hart's Monkey Business, to the savings and loan bail-out.

"Impeachment hearings will demonstrate once again that Democrats and Republicans share not only a love for big government, but also an eagerness to wallow in subterfuge and corruption. In fact, the only thing they fundamentally disagree about is Bill Clinton's sex life," he said.

"At some point, Americans will realize that enough is enough, and that it's time to consider a genuine alternative -- the Libertarian Party."

While the Libertarian Party has taken no position on the president's sex scandal or whether he should be impeached on the basis of the Starr Report, the party has called for impeachment "based solely on the violations of the Constitution that have been perpetrated by President Clinton during the time he has been in office," noted Crickenberger.



WASHINGTON - Donors to President Clinton's legal-defense fund have started asking for their money back after the release of Kenneth Starr's report, the fund's lawyer said yesterday.

The fund's trustees say they haven't yet decided whether to grant the refunds.

Fund lawyer Richard Lucas told The Post there have been about a handful of requests for refunds so far, but he refused to give specific numbers.

Lucas said the trustees probably would decide each request on a case-by-case basis.

That's a change from the fund's policy last month, which was: No Refunds.

We would not give a refund ... because these are gifts, fund director Anthony Essaye said on Aug. 21, four days after Clinton admitted lying to the American people about his relationship with Monica Lewinsky.

At the time, Essaye said no one had asked for a refund - although The Post interviewed some New York donors who said they might not have given in the first place if they knew Clinton was lying.

We've received a very small number of requests for refunds, Lucas said yesterday.

Now that we have actual requests for refunds, we certainly will assess those requests, he said, refusing to give the amount of money at issue.

Common Cause, a good-government group that tracks campaign financing and legal funds, urged Clinton's legal fund to return the money.

It seems that if somebody decides that they don't want to make a contribution to the fund, that the reasonable and appropriate thing to do is to refund the money, said Common Cause Vice President Donald Simon.

Clinton's legal fund has received about $2.2 million from 17,000 contributors, including many $10,000 gifts - the maximum - from Hollywood big shots like Tom Hanks, Ron Howard, Steven Spielberg, David Geffen and Barbra Streisand.

Clinton created the new fund earlier this year with looser rules than his previous fund. The old fund wasn't raising enough money to cover the Clintons' mounting legal bills, estimated to be about $7 million.

Hopefully they can be made to return the cash under wire fraud or misrepresentation laws.

State Dept. Investigates U.N. Overpayment Credit

By George Archibald

The State Department inspector general is investigating charges by a Senate committee chairman that the Clinton administration hid a $42 million overpayment credit from the United Nations as it sought even more money from Congress for the world body.

The probe was announced yesterday after Sen. Rod Grams, Minnesota Republican, asked State why officials at the U.S. Mission in New York conspired to keep the information from Congress, according to government e-mail records.

"By keeping this information from Congress, it appears that the State Department hopes to prevent Congress from reducing the amount of money it appropriates to pay the arrears," Mr. Grams said.

The probe also involves charges that the U.S. Mission and the State Department have retaliated against a Senior Executive Service officer in New York, Linda S. Shenwick, who provided congressional committees and aides with U.N. financial data at their request.

The IG's investigation was sparked by the administration's failure to inform Congress that Joseph Connor, the U.N.'s undersecretary-general for administration, told U.S. officials last July that U.S. arrears were reduced by $42 million because of lower-than-expected spending by U.N. peacekeeping operations.

At the same time, the State Department was preparing to ask Congress to allow the administration to spend another $20.4 million peacekeeping windfall, reaped from currency-exchange gains, on other U.N. nonpeacekeeping activities -- including implementation of the Law of the Sea Treaty, which Congress has resisted supporting.

Mr. Connor and U.N. Secretary-General Kofi Annan have been waging a media and public relations blitz in the United States to pressure the administration and Congress to pay U.S. arrears of about $1 billion, going back many years. An administration-negotiated bill passed by Congress to pay the arrears is on President Clinton's desk awaiting signature.

An imminent payment of $211 million to $240 million is required to save the United States from losing its General Assembly vote under Article 19 of the U.N. Charter, according to a recent report by the congressional General Accounting Office. The $42 million credit was apparently not factored into the GAO numbers.

E-mail messages between officials at the U.S. Mission to the United Nations show that Mr. Connor told the mission two months ago about the $42 million credit to the United States, which pays more than 25 percent of all U.N. costs.

But Robert Orr, top aide to Assistant Ambassador Richard Sklar, third-ranking U.S. diplomatic representative at U.N. headquarters, ordered officials at the mission to hide the information from Miss Shenwick, the mission's counselor for resources management, who deals directly with House and Senate committees on U.N. finances, according to the messages.

"In the course of Connor's call, he said that our arrears are being reduced by $42 million due to unexpended [peacekeeping] obligations," James B. Bond, an adviser for resources management at the U.N. Mission wrote in a July 28 e-mail message to Susan M. Shearouse, deputy counselor for resources management.

Mr. Bond said Mr. Connor would send Bill Richardson, then U.S. ambassador to the U.N., "a letter explaining all. Orr wants it kept from Linda, so the Congress doesn't find out about it," he said in the e-mail. "But if it's in a letter, will she see it anyway? I suppose we can be discreet in the interim."

Mr. Bond and Miss Shearouse said they were unable to comment "without clearance." Mr. Sklar did not respond to a written request for an interview. Miss Shenwick, who is on leave following surgery, was unavailable for comment.

Victoria Toensing, a partner at the Washington law firm DiGenova & Toensing, responded to messages left for Miss Shenwick.

"The State Department is trying to get rid of Linda Shenwick because she is a whistleblower," said the attorney, who said she had been retained to defend Miss Shenwick. "She has provided Congress crucial facts that certain people at State don't want Congress to have. Preventing this attempt to get rid of her for doing her duty is important for all whistleblowers."

Miss Shenwick, an officer at the U.N. Mission for many years, is a financial and management analyst who watches ever-changing U.N. finances and budget data for the United States. Mr. Sklar, U.S. representative for U.N. reform and management issues, sits on the U.N. General Assembly's powerful assessment and appropriations panel called the Fifth Committee.

For years Miss Shenwick has responded to congressional inquiries on U.N. finances and management issues, according to Carlos Aranaga, spokesman for the U.S. mission to the U.N. He said it was "an informal arrangement because we don't have a congressional liaison, per se."

House and Senate members and their staffs from both parties said they have routinely worked with Miss Shenwick to obtain up-to-date and breaking information about the world body's finances.

"The nonpayment of U.S. arrears has been a major issue within the U.N. and a topic of considerable debate within Congress," Mr. Grams, chairman of the Senate Foreign Relations Committee's subcommittee on international operations, told Bonnie R. Cohen, undersecretary for management at State, at a Senate hearing on Thursday.

"Many of us in the Congress have been concerned, however, that the State Department has been more occupied with increasing the amount of the United States' arrears payments and eliminating any congressional conditions on those payments than working to achieve real reform at the United Nations," the senator said.

Miss Cohen appeared to justify a State Department request to reprogram the $20.4 million exchange-rate windfall to other U.N. operations and to use $6.4 million in unspent funds from fiscal year 1993 to reduce U.S. arrears.

She was unable to explain why news of the $42 million U.N. credit was withheld from lawmakers.

"It is not only the withholding of information from Congress, but the scheming to keep the information from an employee who would tell Congress the truth that I find so disturbing," Mr. Grams told Miss Cohen at the hearing.

"I want you to know that State has created a culture of fear at the U.S. Mission where employees are afraid that they will lose their jobs as a result, or face other reprisals, if they answer our queries openly and honestly." The U.N. Mission declined to comment, saying the State Department would respond to inquiries from The Washington Times.

Joe Dickie, a spokesman at State's Bureau of International Organizational Affairs, disputed parts of Mr. Bond's e-mail. "The reference to a letter reportedly promised in July by the U.N. to Ambassador Richardson is apparently the result of an inaccurate read-out of the results of a meeting between U.N. and U.S. officials at which the unencumbered [peacekeeping] balances were raised," he said in a written statement.

Mr. Dickie said the State Department recalculates U.N. credits at a reduced amount before reporting them to Congress.

"U.N. records credit the U.S. for the unencumbered balances as if we pay for 30.5 percent of peacekeeping costs, but by U.S. law we pay at a 25 percent rate. Therefore, the long-standing practice is to recalculate an unencumbered balances at the 25 percent rate before taking them off current peacekeeping bills," he said in a statement.

However, Senate aides said the United Nations, with administration support, assesses the United States at a 30.5 percent rate for peacekeeping operations, despite U.S. law. Therefore, credits should be applied to claimed U.S. arrears at the full 30.5 percent rate, they said.

"There never has been any intention on the part of the administration to mislead Congress regarding the status of unencumbered balances on U.N. peacekeeping accounts," Mr. Dickie said.

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