A couple of stories struck me today. One was the news that the U.S. Securities and Exchange Commission is charging the flamboyant billionaire Mark Cuban with insider trading. Cuban is a character who is many things to many people -- owner of the NBA's Dallas Mavericks, hard-charging investor, movie producer and critic of the Bush administration, and even a veteran of "Dancing With the Stars." Ever since his 1990s dot-com boom venture paid off big time, he has been one of the richest men in America -- and yet there apparently is one thing that Cuban is not.
Above the law.
While some are prone to speculate that Cuban is a scapegoat because of his politics, the facts of the case -- as initially laid out by the government, and certain to be contested by Cuban and his lawyers -- read like a textbook example of insider trading. The government alleges that Cuban learned of an action that would lower the stock price of an Internet startup called Mamma.com in which he was a major investor, and he sold his stock to unwitting buyers before the news was made public, and at a higher price than it traded for after the move. Nevermind, that Cuban's transaction was more than four years ago, or that the money he saved by acting as he did, $750,000 or so, is a drop in the bucket compared to Cuban's net worth -- shades of the Martha Stewart case -- or to the market cap of the stock (at least at that time). It would have been remarkably easy for the feds to look the other way and to ignore what Cuban is accused of doing.
But if the Dallas billionaire did indeed behave as the SEC alleges, it appears that he acted illegally, and that should be punished -- in part as a powerful signal to others who may be tempted to carry out insider trading in the future. It says that no one is more potent than the law, not even a billionaire. It is one of those things that we like to think is special feature of America, something that makes us exceptional as a nation.
Sadly, it is increasingly clear that there is one class of Americans who are now increasingly completely out of the reach of any law: The president of the United States, and the people who work for him. Over the last couple of generations, it has become increasingly apparent that while a sitting president (Nixon, Clinton) might provoke a congressional investigation under the right circumstances, the commander-in-chief will never be prosecuted when he (or someday she) leaves the Oval Office, and aides can now likely expect pardons or commutations, assuming that any investigations even last beyond the change in administrations.
Even when the potential crime is something far worse and more insidious to this nation than insider trading.
Here's the case for what Obama is reportedly doing:
Putting the past behind us, moving forward. That has always been the way, ever since that Sunday morning in 1974 when Gerald Ford pardoned Richard Nixon, an act that most of the punditocracy has since hailed as one that healed the nation (although, frankly, during the malaise of the Ford and Carter years it was hard to tell). But did letting Richard Nixon remain a free man truly save the republic, or did the pardon embolden the Reagan administration to defy Congress and carry out the Iran-Contra scheme, knowing that America didn't want a rehash of Watergate. And did the lack of impeachment and the subsequent pardon of key Iran-Contra figures like Casper Weinberger and Elliot Abrams (recycled in the Bush administration!) encouraging bolder moves, including fishy pardons by Bill Clinton that weren't investigated by the Bush Justice Department, with the ensuing lack of outcry convincing the president there was zero downside to commuting the sentence of Scooter Libby, and now today we have President-elect Obama determined to pull a Gerald Ford, even when the alleged crime is as abhorrent as torture.
So where does it all stop? The slippery slope that Ford started 34 years ago didn't so much heal the nation as start a long chain of escalating presidential power, misconduct, and in some cases lawbreaking. The main reason that a Mark Cuban faces civil penalties for his alleged unlawful act to deter others from doing the same thing. But can deter a future president -- whether it is President Obama or the leaders who come after him -- from breaking the law?