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Late last week, WTP Chairman and constitutional
activist Robert Schulz filed a federal lawsuit in
United States District Court in Albany seeking to
halt the execution of the emergency bailout of Wall
Street insurance giant American Insurance Group, AIG. On Wednesday, Schulz filed a second federal lawsuit
seeking to block the larger Wall Street bank bailout
currently being negotiated through the U.S.
Congress.
Yesterday, while ignoring the dissimilar legal
issues raised in the two lawsuits, the U.S. District
Court issued an Order combining the two cases into a
single case and denying the applications for
injunctive relief requested. The Court, in effect,
ducked a judicial (and very public) hearing to
examine the critical legal question at the heart of
the bailouts: What Constitutional authority
exists for the
U.S. Government or Federal Reserve to use public (taxpayer) funds for
definitively private purposes?
Again, what legal authority allows the U.S.
Government to directly purchase the distressed
assets and contracts of privately owned Wall Street
firms for the express purpose of mitigating their
private investment risks and losses?
Together, the lawsuits assert that the commitment of
public funds and credit for the direct benefit of
privately owned banks is an ultra vires act
by the United States Government and Federal Reserve,
i.e., beyond the limited legal authority granted by
the Constitution. Both lawsuits had asked for a
"show cause" hearing demanding that the Government
defendants produce evidence of their alleged legal
authority to commit public funds for such purposes,
as well as emergency and permanent injunctions
halting the bailout efforts.
Specifically, the second lawsuit charges that Congress lacks
any Constitutional authority to grant the Executive
any legal authority to directly participate
in commerce as a buyer or seller of private property
(as opposed to "regulating" commerce) and that
Congress also lacks any authority to utilize public
(taxpayer) funds for definitively private, i.e.,
non-public purposes. The first lawsuit charges
the Government has no authority to use public funds
to guarantee a loan between the privately held
insurance firm
AIG
and the privately held Federal Reserve Bank.
Despite Schulz's extensive federal litigation experience, the
Court's Order (erroneously) claims that the lawsuits
fail to provide any "citation to authority or an
explanation of this court's jurisdiction, except
conclusory statements of the law…"
One unnamed practicing attorney also with several
decades of federal litigation experience agreed that
the District Court's basis for denying the
injunction hearings was contrived to provide cover
to block any public, judicial examination of the
highly controversial constitutional questions raised
by the bailouts adding, "If the Court had dared sign
that request, all those cameras now in Washington
would immediately be up here in New York."
Schulz plans to file an emergency appeal to the U.S Court of
Appeals for the Second Circuit in
Manhattan on Monday, challenging the lower Court's
improper dismissal of the requests for Temporary and
Permanent injunctions.
Click here to read: Bank Bailout Complaint
Bank Bailout Memorandum
of Law
Press Release 9-25-08
U.S. District Court
Order
denying injunction requests to stop the bailouts
Last
week's WTP
AIG lawsuit update
On Wednesday, We The People Foundation issued a press release
regarding the second lawsuit. In part, it cites
Schulz:
"Beyond the moral hazard and dangerous precedent to
be established by this legislation, it is of vital
importance that the American people recognize that
the present financial crisis is not the result of
ineffective regulatory oversight or defective
government policy but rather a direct and
predictable result of decades of constitutional
violations by the Federal Government. Through a
long-standing program of disinformation and
collusion with the Federal Reserve and Wall Street
financial elite, the United States Federal
Government has denied the public access to vital
information about the secretive operations of the
privately owned and operated Federal Reserve System
and its monopoly control of America’s monetary
system."
"This monopoly control of our currency by a private
banking cartel is the root cause of the increasingly
distorted, volatile and damaging economic conditions
experienced in the U.S. and abroad. America’s fiat
currency is produced from thin air and manipulated
by the Federal Reserve for the benefit of its
private owners, major Wall Street institutions and
to enable the numerous unconstitutional activities
of the Federal Government. Beyond this, the Fed's
vast operations are substantively beyond
accountability to the taxpayers or the Congress.
These abuses of the Constitution have taken our
financial system to edge of the abyss. The chickens
have come home to roost."
Since 2002, the We The People Foundation and its
supporters have tried, thus far unsuccessfully, to
get the Government to respond to a number of First
Amendment Petitions for Redress of violations of the
Constitution, including the Federal Reserve System’s
violation of the money clauses of the Constitution.
Had the Government honored the Constitution and its
obligation to respond to the citizens’
Petitions for Redress, many of the nation’s
current financial and monetary problems could have
been avoided.
TIME TO FIGHT BACK:
The We the People Congress now encourages everyone to contact
their Congressional representatives and tell them
what you think about the bailout.
We strongly encourage personal phone calls and
faxes, rather than emails. Don't forget to call your
representative's local District offices located
throughout the 50 states.
Click here for a .txt file of
FAX numbers of Senators and Representatives.
Click here to find
local phone numbers and other Congress contact
information
(lookup info by map,
zipcode, etc.)
Here's the main Capital Switchboard number in
Washington: 202-224-3121
Here are
the TOLL FREE Capital
Hill switchboard numbers:
1-877-210-5351
1-800-828-0498
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