Think about three seemingly unconnected news stories, all examples of costly or dangerously indictable fraud machines…

• The economic collapse of 2008 was caused in part by relaxed mortgage rules that allowed borrowers to get a home loan without a down payment or even proof of income in some cases.
• In the Pigford settlement, claimants were able to get $50,000 checks by asserting without proof that they had “attempted to farm.”
• In a move strongly supported by the NAACP and other liberal advocacy groups, the Obama Department of Justice just stopped South Carolina’s plan to put in place some minimal ID requirements for voting. Currently voters in a number of states don’t need to show any photo ID or other identity checks in order to cast a ballot.

All three stories are examples of systems that have been intentionally set up with such low standards that they invite fraud. But ingeniously, they have also been set up in a such a way that makes them almost critic-proof because the lack of standards makes detection of fraud nearly impossible. When the system is questioned, the defenders, creators and beneficiaries then point to the lack of “proof” of fraud as a reason to keep the status. Thus, a self-perpetuating fraud scheme is kept alive as long as possible.

Make no mistake, these scams are costly….

• In the mortgage crisis, politicians got to claim they were helping the poor become homeowners, thus helping to shore up their voter base. Meanwhile the politicians made insider trading profits and eventually bailed out the too-big-to-fail financial institutions. The cost of this one is almost too large to calculate; it helped trash the entire economy.
• In Pigford, politicians (mostly Democrats and the Congressional Black Caucus but some Republicans as well) got to claim they were helping black farmers in order to help them win elections. The USDA was able to claim victory without ever solving the underlying problems of racism. Attorneys made tens of millions of dollars.  Taxpayers shelled out billions in fraudulent claims
• In the voter ID clashes, both sides seem to agree that having lax voter ID laws favors the Democrats. Ironically, though, the law that allows the Obama Department of Justice to stop South Carolina voter ID law was forced through by a Republican who wanted to keep gerrymandering to protect GOP seats.

I first recognized the existence of the fraud machine while working on the Pigford story. Defenders of the Pigford settlement would sometimes ask for proof of the fraud, as though I were going to pull out a long list of names with red circles around them and say, “See! Bill Johnson committed fraud! Here’s right here on the list!”

No such proof exists, and I quickly realized the scam; it can’t exist. The system is set up so that almost nobody gets caught. The whole purpose is for nobody to get caught. In the case of Pigford, $50,000 checks were given out to people who claimed that they went to USDA and were sent home with no paperwork. There’s no possible way to prove or disprove such a claim but in Pigford, that’s enough to get you a nice fat check and to get your lawyer a nice fat cut of that check. Who set up the system? The lawyers and politicians who benefit the most from it, that’s who.

Defenders of the system weasel out of arguments by claiming “there is no proof” while ignoring the fact that the very nature of the systems don’t allow for any proof. Sometimes, the proof comes later after the entire system has collapsed (as in the mortgage crisis) or when large disparities are shown in collected data (such as the fact that there are three times more Pigford claimants than there were black farmers) that are impossible to for rational people ignore.

But we’re not dealing with disinterested rational people. We’re dealing with multi-billion dollar scams that keep the establishment firmly in place.

Any system with no reasonable checks is indefensible on its face. The actual incidents of fraud aren’t what need to be proven in order for the system to be criticized.  A system that clearly invites lying, cheating and stealing will probably prove to have plenty once they are exposed but the regular folks falling prey to the temptations of a corrupt systems shouldn’t be the main focus of inquiry. It’s the people who built the indefectible fraud machines who need to be exposed and prosecuted. The small time fraudsters are the grease that keeps the Political Class’s money engine pumping. It’s time for citizens to throw wrenches in these scam systems once and for all.

Federal employees whose compensation averages more than $126,000 and the nation’s greatest concentration of lawyers helped Washington edge out San Jose as the wealthiest U.S. metropolitan area, government data show.

The U.S. capital has swapped top spots with Silicon Valley, according to recent Census Bureau figures, with the typical household in the Washington metro area earning $84,523 last year. The national median income for 2010 was $50,046.

The figures demonstrate how the nation’s political and financial classes are prospering as the economy struggles with unemployment above 9 percent and thousands of Americans protest in the streets against income disparity, said Kevin Zeese, director of Prosperity Agenda, a Baltimore-based advocacy group trying to narrow the divide between rich and poor.

“There’s a gap that’s isolating Washington from the reality of the rest of the country,” Zeese said. “They just get more and more out of touch.”

Total compensation for federal workers, including health care and other benefits, last year averaged $126,369, compared with $122,697 in 2009, according to Bloomberg News calculations of Commerce Department data. There were 170,467 federal employees in the District of Columbia as of June. The Washington area includes the District of Columbia, parts of Northern Virginia, eastern Maryland and eastern West Virginia.

Read the full story here.

Say you don’t have the dough to add the fashions you see at Sunday’s Academy Awards ceremony to your closet. If you buy knockoffs instead, are you shopping smart or stealing?

Today it’s perfectly legal to copy whatever you see on the red carpet and sell it yourself. To some, such as  Diane Von Furstenburg, this sounds a lot like theft. The former German princess is one of the world’s most successful fashion designers and she’s teaming up with Senator Chuck Schumer (D-NY) to push a bill that would give designers a three-year monopoly on new creations.

The whole point of intellectual property is to spur innovation, and that, according to supporters, is exactly why the fashion industry needs such a bill. Without tougher protections, they say designers will have less incentive to create new looks.

But is the fashion industry really hurting for innovation? And are top-tier designers like Von Furstenberg really getting ripped off by bargain hunters? And even if they were, who’s to say whose look is truly original?

Johanna Blakely of USC’s Norman Lear Center worries that the relentless push for more intellectual property protection could lead to a situation where big design houses lawyer up and sue young designers. Designer Galina Sobolov, head designer and owner of Single by Galina Sobolov, agrees.

“If this bill was in effect as we grew our company, we would have faced probably millions of lawsuits,” says Sobolov, whose designs have been worn by celebs such as Katy Perry and Rachel Hunter. “And we would have never actually had a company.”

Approximately 6.30 minutes.

Written and Produced by Ted Balaker. Field Producer: Paul Detrick; Camera: Hawk Jensen, Alex Manning, Zach Weissmueller; Additional Photography: Dan Hayes.

Visit Reason.tv for downloadable versions of this and all our videos, and subscribe to Reason.tv’s YouTube channel to receive automatic notification when new content is posted.

The site, which has the address makenolaw.org, empowers grassroots activists from around the country that are standing up and saying no to unconstitutional attacks on free speech coming in the guise of campaign finance reform.  The site explains all the latest news and events going on in this increasingly complex area of law.  All of the writers are First Amendment attorneys and experts at the Institute for Justice (IJ)—the libertarian law firm dedicated to striking down campaign finance laws in state and federal courts.

The unfortunate reality is this:  Campaign finance laws are a way to regulate speech and silence speakers.  And they have seriously negative impacts on everyday Americans.

Consider Karen Sampson of Parker North, Colorado:

Karen and her neighbors opposed an effort to annex their town into a neighboring city because it would raise their taxes without providing them benefits.  So they printed up fliers and yard signs.  And then they got sued.

Under what basis?  Colorado’s campaign finance laws, which state that any group of individuals that spend over $200 magically become an “issue committee” that is forced to register with the state.  Further, they must track and report all their “contributions” and “expenditures” and disclose the identities of anyone who gives them money.

The result?  People took down their yard signs and stopped passing out fliers.

In 2008, a federal court upheld the lawsuit against Karen and her neighbors while admitting that Colorado’s campaign finance laws “had the effect of stifling political speech in violation of the First Amendment.”  The Institute for Justice appealed and is waiting for a decision.

In Seattle, Pat Murakami is fighting campaign finance laws that threaten grassroots activists with fines up to $10,000 for every act of free speech:

Pat heads up a diverse group of individuals that work together to fight eminent domain abuse.  She says that all the campaign finance laws do is “limit the political process to lobbyists and insiders.”  Moreover, they threaten her group’s very existence:

“For a volunteer organization like us, fighting to preserve our neighborhood is difficult and expensive enough as it is.  My organization cannot afford the time and lawyers necessary to correctly comply with Washington’s incomprehensible and complex law.”

36 states in America now use campaign finance laws to silence activism just like Pat’s.  And as bad as Washington state is, the situation is far worse on the east coast.  In New York such efforts are criminal, threatening people like Pat with four years in jail and several thousand dollars in fines—the exact same punishment handed out to arsonists.

Down south, campaign finance laws treat activists like Pat the same as people who kidnap children:  Alabama law says $30,000 in fines and 20 years behind bars.  [For more statistics, check out the report Mowing Down the Grassroots.]

The bottom line is that free speech on political matters is vital to our form of government.  And the right to talk about and participate in local politics is at the core of what the First Amendment was designed to protect.  Campaign finance laws don’t just affect politicians.  They restrict everybody’s speech, silencing the grassroots through red tape, regulations and punishment for speaking.

That is why we need to work together—which is where the new free speech site comes in. According to IJ campaign finance expert Paul Sherman:

“We are really excited about Congress Shall Make No Law.  It’s so important to bring the community of activists together.   For everyone interested in helping to protect free speech, there are four quick things you can do right now:  Bookmark, read, comment and share.”

That is:

1. Bookmark makenolaw.org
2. Read a few posts
3. Comment on them
4. Share with others

Sherman continued, “Our success in bringing together and educating people on free speech really depends on our activists.  Working together, with their help and support, we can save free speech from the regulators.”

The only thing Americans should need in order to speak out about politics is an opinion.  Join the free speech community and help IJ—along with grassroots activists from around the country—preserve our most cherished liberties.

There are several lines of examination that come immediately to mind.  We can rest assured that it will never happen – as the emails show, the last thing they want to do is be in a position where they have to explain themselves.  But certainly asking leading climate change cheerleader Phil Jones about his email describing his use of a “trick” to describe the manipulation of observed temperature data to “hide the decline” in order to achieve the desired result would be amusing:

• So, Dr. Jones, when you used the word “trick,” you really meant that it was not a “trick” at all but a valid, scientifically recognized process of data interpretation?
• Can you identify another instance in your experience where a scientist described his valid, scientifically recognized process of data interpretation with a term commonly used to describe a hoax, scam or fraud?
• And when you wrote the words “hide the decline,” is it now your testimony that when you used the word “hiding,” you were not actually “hiding” anything, and moreover, though you used the word “decline,” there was no “decline” in temperatures to be hidden in the first place?
• So, if I understand your explanation, it is that you commonly use language in your communications which means precisely the opposite of the meaning that you are seeking to communicate?
• And if an email from those who disagree with your findings – who you call “deniers” or “skeptics” – were to be made public that described their use of a “trick” to “hide the increase” in temperatures, would you find this to be of no great import because scientists commonly describe their processes as “tricks” and that their act of “hiding the increase” must be purely benign based on the manner of usage you describe?
• So, is it only proponents of man-made global warming that habitually use words and phrases that mean precisely the opposite of their common usage to describe their work?

But, as delightful as it would be to pick at particular instances of the activists’ admissions of fraud and their lame attempts to explain them away, there’s really one question that needs to be asked.  In fact, if Al Gore would ever expose himself to the questions of anyone beyond the most credulous climate change sycophants, someone ought to ask it of him:

Mr. Gore, would you be happy if tomorrow you were to see irrefutable scientific evidence that mankind’s activities are not causing the Earth to warm?

A normal person would answer with a resounding, “Yes!”  A normal person would be relieved that not only is our planet safe, but that we need not spend trillions of dollars and forfeit our most basic freedoms in pursuit of remedies for the bugbear of climate change.

But do you think for a second Al Gore would say, “Yes”?  Do you think any of the global warming suckers would?  Get real.

Understand you would not get an express, “No.”  He would probably just deny the validity of the question (“We know climate change is real so that will never happen”).  But after 15 years of examining witnesses, I have a rule of thumb.  Any answer to a question that is not an unambiguous “Yes” is really a “No.”

And to those invested (ideologically, professionally and financially) in man-made climate change, the answer would be “No.”  But contrary evidence would make no difference regardless.  Al Gore and his ilk would not be shaken in the least by contrary scientific findings because the climate change scam is not driven by science.  It is a campaign driven by the end the believers seek – an agenda of political, economic and social control.  The science is simply a convenient means to that end.  In fact, climate change belief is the opposite of science.  It is a faith, a pagan religion complete with infallible doctrines, ritual sacrifices and even heretics who must be burned at the (so far) figurative stake.

A basic concept in the scientific method is falsifiability, the idea that a scientific hypothesis can be disproven through evidence.  If a hypothesis cannot ever be falsified, then to believe it requires an act of faith.  Therefore, if the climate change hypothesis is truly based upon science, with the production of satisfactory evidence it could be disproven.  And this leads to one final question for the climate change believers:

Mr. Gore, if presented with irrefutable scientific evidence that the man-made climate change hypothesis is incorrect, would you accept it?

Of course, believing that Mr. Gore would answer with an unambiguous “Yes” would itself require an enormous leap of faith.