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AF 447: lawyers based on the families of victims

One attracts its customers through the Association of Victims and dangled a spectacular in the United States

Fabrice Amedeo 16/07/2009 (English Translation)(Emphasis mine)

A name, phone number, a profile on Facebook. The “Association for the truth about flight AF 447″ has not been slow to organize. Yet when one dials the number of the association, it falls directly from a law firm. The firm Maier is its name, is already through the association, 50 families. Contacted by Le Figaro, assures his boss that had to use his premises and his secretary to the association. “We are not sharks, Sylvain explains Maier. We will soon open a new phone line so there is no confusion. “

The firm works with a Parisian firm of Anglo-Saxon Stewarts Law, specializing in air crashes. According to our information, he contacted the relatives of the victims shortly after the tragedy to offer its services. Based in London, he receives at the premises of the association, ie within the law firm of Sylvain Maier, but certainly be “independent.” He dangled the prospects for victims compensation mirobolant.

This “soliciting” is banned in France, but no surprise his new partner in Paris. “I’m not shocked if the goal is to be effective,” explains Sylvain Maier. This process is not within the Bar of Paris, and I’m not even sure that it was banned in the UK. “Such a process is common relativise Denis Chemla, a partner at law firm Herbert Smith. Some law firms in the United States and Europe organized immediately after an accident in order to contact the families. “According to our records, Stewart Law has even contacted a lawyer close to the victim to try to recover his client’s piece of gold. “In France, our fees do not exceed 20% of the sums obtained by the victims, while the United States is 30 to 40%,” says the lawyer who was offered the deal.

To attract families, the Anglo-Saxon firm dangled the prospect of a trial in the United States. “The value of the seat, ie the compensation of victims, is more important to the United States than in France, said Denis Chemla. In France, including the compensation is calculated according to the income of the victims, while the United States considerations are more emotional. “Generally, a” seat “will be paid 3 to $ 5 million in the United States, against rarely more than 1 million euros in France. In the accident of Air France Concorde in 2000, families had received 1 million disappeared because passengers were quite fortunate. For the occurrence of Sharm el-Sheikh in 2004, compensation should be much lower.

Airbus made common cause with Air France

In the case of flight AF 447, Air France is not involved in a trial in the United States. Under the Montreal Convention, the company can not be prosecuted on the place of departure or arrival of his plane. The agreement also sets compensation at 90 000 euros per person. Part of this sum (17 000) has already been paid to families.

For its part, Airbus should make common cause with Air France. “Sometimes they do it without even knowing it, said a lawyer for victims. Finally, the reinsurer Lloyd’s which is the check, and it is not known who is behind. “

But once settled the case of Air France and Airbus, there is still all the equipment of the aircraft, most of whom are American. This is where the work of firms sometimes called “vultures” begins. For them, all means are good to export the judicial process on American soil. The investigators report a bad use of radar by the pilot? Bread blessed: the radar is American brand. Same scenario if the engine of the Airbus – it is General Electric – is mentioned, etc.. Remains whether the Anglo-Saxon firm really believe their fortunes through a trial in the United States or if it is for him as a way to attract customers. For a year, 150 cases of this, 147 applications have been rejected by U.S. courts.


The careful study of the debris started AF 447

Fabrice Amedeo 16/07/2009 (English Translation) (Emphasis mine)

Pieces of the plane recovered in the South Atlantic arrived Tuesday in France. But in the absence of black boxes, specialists hope not to make major discoveries.

This is a second investigation begins. The wreckage of flight AF 447 which sank in the South Atlantic on June 1st, arrived by ship Tuesday in Pauillac (Gironde). They were immediately unloaded and delivered to the Air Test Center in Toulouse (CEAT), where they are expected over the weekend.

Two teams are at work: those of the air transport police in charge of the judicial investigation and the Office surveys and analysis (BEA), whose report is intended not to identify those responsible, but to improve aviation safety . This investigation should lead to the publication of a new report by the BEA to one year and that a final report in several years.

So this is a true work of substance which now begins after the initial study on the spot. This has enabled the experts sent to Recife to say that Airbus had not disintegrated in midair and was intact at the time of impact. This scenario is corroborated by the crushing of all the parts from the front of the camera and the internal structures of the closet that have been uprooted from their vertical support and plated against the floor.

“For this kind of expertise, every piece is important and none is left out,” says Ronan Hubert, historian accidentology air. This includes observing the break points on each of the parties that have been recovered. “In general, many observations are visual, but the use of scanner is sometimes necessary. The study of the engine or some of its parts allows in general to say whether the engine still running at the time of impact. The analysis of elements of wiring also helps to determine which lights were switched on and therefore the state information of the pilots before the accident.

Industrial Issues

It seems that nothing of this nature has been recovered in the South Atlantic. So, skepticism is the rule among observers even before the second season has begun. “You can say many things in a wreck,” says Gérard Arnoux, the chairman of the pilots’ union at Air France. The problem is that in the case of flight AF 447, it has not recovered much. “640 elements of the aircraft were recovered but they represent only 2 to 3% of the total  plane. “With so few elements, we will only probabilities, not on reliable deduct any scenario,” said Ronan Hubert.

Second part of this investigation is expected by the pilots of Air France. Many fear that the tracks have been reduced in the name of industrial issues. “It is almost certain today that if the Pitot probes were not released, the aircraft would not land, insists a trade union official. Then, the question of the weather and the attitude of the crew. “

Unless a miracle and the recovery of black boxes, finding an answer to these questions seems difficult. French forces had stopped last week acoustic research black boxes and will start next week a visual search of the wreckage.

Yet for some experts, all hope is not lost. During the crash of a Boeing 737 in early 2007 off the coast of Indonesia, it took eight months to U.S. authorities recovered the famous black boxes. They were intact and were based in 2 000 meters of water.




In the cockpit of flight AF477 (English Translation)

How the crash of the Airbus A330 could occur? The Russian magazine Itogui held a reconstitution of the flight in a simulator.

25.06.2009 | Stepan Krivocheïev, Grigori Sanine

Sunday 31 May, 23 hours. At the airport in Rio de Janeiro, weather conditions are those of a splendid night of the season, “wind from north-westerly gusts, low cloud insignificant 1 000 m, cloud masses at 3 000 meters.” The Air France flight took off at midnight Paris time. Sixty minutes pass, and no signs of disaster, and visibility is about 10 kilometers and promises to remain stable during the three hours. The last radio contact between the crew and the ground takes place just under three and a half hours later, before the aircraft begins its voyage across the Atlantic. But that night, over the ocean, something unimaginable will happen.

“When you look at the weather maps we see that the area from which the plane issued a series of automatic signals, ie the area of his fall, suffered intertropical convergence phenomenon, ie a hurricane tropical extremely violent, “says Alexander Poliakov, deputy director of the Russian Meteorological Agency. “At the equator, the storm clouds may rise to 16 000 meters. Airbus, he was flying at 10 700 meters, so in the midst of the storm, which was accompanied by lightning discharges extraordinarily powerful. In addition, statements on this night, there was over the Atlantic large concentrations of tropical cumulus clouds, which still cause tremendous turmoil. “

The most serious threat to an airplane, it is not the winds that drive, not even the winds, the gradient wind speed according to altitude, or, more simply, the updrafts. If at a given level, the wind speed is 10 to 20 meters per second and, just above or below, it reaches 40 meters per second, it creates eddies which can carry from experts, a strong mechanical action on the fuselage and systems of the aircraft. “

Crews who have to cross the Atlantic are familiar with these phenomena. All pilots who have experienced tropical storms say there’s nothing more terrifying in the world. Fatikh Koutiouchev, a pilot familiar with the Atlantic and often overflew where Airbus has perished, evokes an area where the weather changing before our eyes: “We always approach this trap is to ask whether we can to pass. Consult on the radar, we look through the windows of the cockpit, everything indicates that we should be able to cross, and then suddenly when you arrive in the area expected to be released, we realize that we are fallen into a trap. The pilots are based on what they said on board radar, but if the road is blocked by a thick wall of clouds, there is no way to see what’s behind. When you fly over these areas, we are blinded and tossed around the plane while buzzing, vibrating, pulsating, lights up, shakes it to a point unimaginable. “

Straight ahead stands a wall of black clouds

i5966itoguiWe are in the season when the Hurricanes take the Atlantic tropical storm. The night of the accident, the vast space that separates Brazil from West Africa was in the grip of a raging storm. “The Airbus approached this area with an angle of 30 °, details Alexandre Poliakov. But what is strange is that where it disappeared, the wind was rather weak. It is over the height at which he was flying that the weather was so abysmal, with much more turbulence. It’s really quite curious. “

In an attempt to solve this mystery, we asked an airline pilot to attempt a reconstruction of the flight AF477 to board a flight simulator. Enclosed in the camera, we discover the multitude of on-board instruments while engineers entering computer data simulator flight Rio-Paris and the weather maps of the Atlantic for the night of tragedy. The captain informed the control tower that he was ready to take off. We drive on the track and put the levers of command reactors in position. We take the speed, we take off – that’s it, we are in the air, and we enclenchons the autopilot. Reached an altitude of 10 700 meters, we are relaxed. Our cruising speed is 870 km / h, the autopilot is docilely work, transmitting screen dashboard information on the operation of reactors, speed, altitude. The weather radar indicates that we are moving on a storm front.

Can not forget what we see through the windows right in front of us lies a huge wall of black clouds all around the air is zébré lightning, our headphones are spewing crépitements deafening, echoes of thunder hit. The computer announces that we have entered a zone of turbulence. The device is shaken from all sides. The situation is changing very quickly, columns of clouds bigger deal to us, downdrafts striking the aircraft, which, despite its imposing bulk, bounces like a football. We can not help but ask ourselves what are the passengers.

Just a few more minutes and we will be in the heart of a tropical storm. Around the cockpit, preventing swirling darkness to determine the status of the device, can not be relied instruments and the cockpit is nervous men feverishly seeking the best way to avoid the storm. You can not dive, and take the altitude is impossible due to the too high. The only options are skew to the right or left.

The radar shows a small hole on the right, the captain changes the speed to reduce the angle of the turn, and it gives the autopilot parameters of the maneuver. The aircraft “jumps” to the window immediately detected, but the space between the homes is suddenly stormy much smaller than expected. It is about 5 000 m and continues to decline.

The aircraft was caught in a deadly trap and without issue

The next instant, the storm engulfs our Airbus, without leaving any chance for him to turn away. Indeed, it looks like a trap. The tremors were so violent that is difficult to not vomit. We assourdis a strident cacophony of alarms and beeps from the various instruments. One after another, the captain of the calculation we drop, the computer immediately switches all the vital systems on the emergency and continues to fight against the forces of nature apart. The crew disconnected the autopilot and password manually (at least one of the assumptions made). Wielding the stick as a joystick electronic combat, the captain was trying to find a way to bypass the storm front. The screens show a horizon that shakes the storm wants us to win.

That’s when all switches. We are entering the computer speed that we provide the external sensors, pitot probes. According to one version planned, the Airbus accident could have been deranged and communicating false information. The speed that we are entering is not very consistent, as is our test. An alarm sounds immediately to notify us of a sudden acceleration. The pilot slowly operates the levers of control of reactors, but the speed falls to a coup and the device makes a spectacular caper before biting nose. Everything is finished.

Our captain lowers a switch and finally stops the simulator. The complexion and legs greenish cotton we exit the cockpit. This experience has shown us that a malfunction of the onboard computer, caused by extreme weather conditions, could be fatal to the aircraft of Air France. It is likely that Airbus will be caught in a deadly trap harmful if it had no issue.

Related Links

Daily Mail (UK):  The Airbus 330 – an accident waiting to happen

Telegraph (UK):  Air France crash: victims did not drown

LB Note:  Both of the above articles are speculative and are not worth our time discussing!

How many deaths will it take till he knows
That too many people have died?
The answer, my friend, is blowin in the wind,
The answer is blowin in the wind.

(La réponse mon ami, est Blowin dans le vent!)

Update–Corrected title & Figaro Link.


FAIR Update — Washington Post — The Heritage Foundation — DHS Press Releases — Federal Register (Final Rule – FAC 2005-29, FAR case 2007-013)



Senate Adopts Common-Sense Enforcement Measures as Part of DHS Appropriations Bill

The four amendments include:

  1. Sessions E-Verify Amendment #1371 — Offered by Senator Jeff Sessions (R-AL), Amendment #1371 makes the E-Verify program permanent. E-Verify is the online, electronically operated system that allows employers to quickly and easily check the work authorization status of their new employees. (For more on E-Verify, see FAIR’s E-Verify Backgrounder).  In addition to making this valuable program permanent, the Sessions Amendment requires all employers who do business with the federal government to use E-Verify on their new hires, as well as existing employees assigned to affected federal contracts.The adoption of the Sessions Amendment did not come without opposition. Senator Chuck Schumer (D-NY) — a well-known amnesty advocate and chairman of the Senate Judiciary Immigration Subcommittee — gave floor speeches on Tuesday, July 7 and Wednesday, July 8 in which he urged his fellow senators to oppose the Sessions Amendment. (See Schumer’s speeches from July 7, 2009 and July 8, 2009). On July 8, Schumer offered a motion to table — or kill — the amendment. However, the Senate supported the Sessions Amendment by rejecting Schumer’s motion on a 44-53 vote. (Senate Roll Call Vote #219, July 8, 2009).Following the vote on the motion to table, the Senate agreed by a voice vote to adopt a second degree amendment offered by Senator Patrick Leahy (D-VT) that added language to the Sessions Amendment to permanently authorize the EB-5 Immigrant Investor Regional Center pilot program. (Senator Leahy Press Release, July 8, 2009). This program sets aside 3,000 visas annually for wealthy foreign investors. Following the adoption of Leahy’s second degree amendment, the Senate approved the Sessions Amendment by a voice vote. (Congressional Quarterly, July 9, 2009).
  2. DeMint Border Fence Amendment #1399 — Offered by Senator Jim DeMint (R-SC), Amendment #1399 requires the Department of Homeland Security (DHS) to complete almost 700 miles of double-layered reinforced fencing along the southwest border by the end of 2010. (Senator DeMint Press Release, July 8, 2009). The DeMint Amendment would direct DHS to complete the border fence as Congress originally intended when it passed the Secure Fence Act of 2006.  DHS has been constructing fencing that would prevent vehicular border crossings, but the DeMint Amendment will ensure that the border fence will also reduce illegal alien foot traffic.Under the Secure Fence Act, the federal government was instructed to complete “at least 2 layers of reinforced fencing” along a total of about 670 miles of the U.S.-Mexico border before the end of 2008. (Secure Fence Act of 2006). However, in December 2007, Senator Kay Bailey Hutchison (R-TX) successfully attached an amendment to the 2008 Consolidated Appropriations Act that effectively gutted the two layer reinforced fencing requirement by giving DHS the discretion to construct other types of barriers to count toward the 670 mile total. (Consolidated Appropriations Act, 2008, December 26, 2007). As a result, the Government Accountability Office (GAO) reported in January 2009 that only 32 miles of double-layered fencing had been built, and that DHS had no intention to significantly add to that total. (GAO Report, January 29, 2009). The DeMint Amendment restores DHS’ original mandate to complete the entire 670-mile southwest border fence using only double-layered, reinforced fencing. On July 8, the Senate voted 54-44 to adopt the DeMint Amendment. (Senate Roll Call Vote #220, July 8, 2009).
  3. Vitter “No-Match” Amendment #1375 — Offered by Senator David Vitter (R-LA), Amendment #1375 prohibits any of the funding in the FY2010 Homeland Security spending bill from being used to rescind a DHS final rule that provides a method for DHS to notify employers when there are mismatches between names and social security numbers provided by their employees and to instruct employers on how to deal with these so-called “no-match” letters. The Senate approved the Vitter Amendment on July 9 by a voice vote. (Senator Vitter Press Release, July 9, 2009).The adoption of the Vitter Amendment came just one day after the Obama Administration announced its intention to rescind the No-Match rule. (DHS Press Release, July 8, 2009).  If Senator Vitter’s amendment survives conference, it will not take effect will until October 1, 2009.  The Obama Administration could rescind the No-Match rule before the Vitter Amendment goes into effect.
  4. Grassley E-Verify Amendment #1415 — Offered by Senator Charles Grassley (R-IA), Amendment #1415 would give employers who are enrolled in E-Verify the option to use the program to check the work authorization status of existing employees in addition to new hires. Currently, E-Verify can only be used to check the status of new hires. The Grassley Amendment was adopted by a voice vote on July 9. (Senator Grassley Press Release, July 9, 2009). The benefit of the Grassley Amendment is that employers would be able to begin using E-Verify to ensure that all of their employees are legal — not just their new hires. This would help free up jobs currently held by illegal aliens so that out-of-work Americans could apply for those jobs.


Also on July 9, the Senate adopted one other immigration-related amendment (Amendment #1428) to the FY2010 Homeland Security spending bill. Sponsored by Senator Orrin Hatch (R-UT) and adopted by voice vote, Amendment #1428:

  • Reauthorizes the Special Immigrant Non-Minister Religious Worker Visa Program for three years. This program, which would otherwise expire in September, provides 5,000 visas annually for foreign non-minister religious workers to enter the United States to perform work for religious institutions. U.S. Citizenship and Immigration Services has found that the Religious Worker Visa Program is highly susceptible to fraud. (Office of Fraud Detection and National Security Fraud Assessment Summary, July 2006).
  • Reauthorizes the Conrad 30 Program for three years. The Conrad 30 program, which would also otherwise expire in September, allows foreign doctors who attend school in the United States to extend their stay if they agree to practice in medically underserved communities for three years.Eliminates the requirement that an alien widow or widower of a deceased U.S. citizen must have been married to the citizen for a minimum of two years or face the automatic denial of a marriage-based petition for a green card application. (Senator Hatch Press Release, July 10, 2009).
  • Under current law, a citizen may petition for a green card on behalf of his or her alien spouse. However, current law provides that the petition for a green card for a widow or widower alien whose spouse dies before the couple has been married for two years must ultimately be denied. This provision is designed to prevent marriage fraud. (See FAIR’s Legislative Update, June 15, 2009)…

numbersusa_map_0121States Requiring the use of E-Verify (Source: NumbersUSA)

Obama, Napolitano Scrap DHS No-Match Rule, Affirm E-Verify Rule for Federal Contractors

The Obama Administration and the Department of Homeland Security (DHS) made two policy announcements this week.  The first will help illegal aliens keep their current jobs and make it easier for illegal aliens to commit Social Security fraud.  The second merely restates a Bush-era regulation regarding the use of E-Verify by federal contractors.

On Wednesday, July 8, DHS Secretary Janet Napolitano announced that the Obama Administration would finally implement a Bush-era federal regulation that would require most federal contractors to use E-Verify, the federal government’s employment verification program.  The DHS press release praised the effectiveness and reliability of E-Verify, saying the program represents a “smart, simple and effective tool that reflects our continued commitment to working with employers to maintain a legal workforce.”  According to DHS, E-Verify scored high marks in terms of accuracy, reliability, and user convenience and satisfaction. Secretary Napolitano also reiterated that E-Verify is federally funded and is made available to employers at no cost.  (DHS Press Release, July 8, 2009).

Despite the welcome news that DHS would begin to require federal contractors to use E-Verify for future contracts, the announcement comes after the Obama Administration delayed this same Bush-era rule on three separate occasions.  In the release, Secretary Napolitano noted that DHS will not be applying the regulation until September 8, 2009. (Id.).  This means that more than seven months’ worth of federal contracts, including many stimulus contracts, will have been signed by the Obama Administration before this regulation that will protect American jobs will go into effect.  (, July 8, 2009;, July 8, 2009; and Human Events, July 9, 2009).

Secretary Napolitano also announced that DHS would rescind the so-called “No-Match Rule.”  (DHS Press Release, July 8, 2009 and National Review, July 8, 2009).  Under the No-Match Rule, the Social Security Administration (SSA) would have been required to notify employers who report earnings for at least ten employees whose names do not match their Social Security numbers (SSNs).  The rule would have required that employers double-check their records for accuracy and then have employees work to correct any discrepancies.  When DHS announced the No-Match Rule in October 2008, the Department stated: “there is a substantial connection between social security no-match letters and the lack of work authorization by some employees whose SSNs are listed in those letters.” Additionally, DHS cited a private study that concluded that ”most workers with unmatched SSNs are undocumented immigrants.”  (No Match Final Rule, October 8, 2008).  Last week, Napolitano ignored the role the No-Match Rule could play in immigration enforcement and instead attributed most Social Security no-match letters to “typographical errors or unreported name changes.” (DHS Press Release, July 9, 2009)…

70to2000blue_0Source Numbers USA

Homeland Security Announces Changes to 287(g) Program

Late last week, Homeland Security Secretary Janet Napolitano announced that U.S. Immigration and Customs Enforcement (ICE) will alter the process that state and local law enforcement agencies must follow in order to participate in the 287(g) program.  The 287(g) program — named for the section of the Immigration and Nationality Act that authorizes the program – allows ICE to enter into agreements to train state and local law enforcement agencies in the enforcement of federal immigration laws.

In order to participate in 287(g), state and local law enforcement agencies are required to enter into a Memorandum of Agreement (MOA) with ICE. According to ICE, MOAs are designed to define “the scope and limitations of the authority to be designated” under 287(g). An MOA also establishes “the supervisory structure for the officers working under the cross-designation and prescribes the agreed upon complaint process governing officer conduct during the life of the MOA.” (ICE Fact Sheet). Napolitano’s announcement last week indicated that ICE has “standardized the Memorandum of Agreement (MOA) used to enter into ‘287(g)’ partnerships.” (DHS Press Release, July 10, 2009). According to the DHS press release, the new MOA “aligns 287(g) local operations with major ICE enforcement priorities — specifically, the identification and removal of criminal aliens.” The new MOA, the press release says, is meant “to address concerns that individuals may be arrested for minor offenses as a guise to initiate removal proceedings.” (Id.).

According to the author of the legislation that created 287(g) (House Judiciary Committee Ranking Member Lamar Smith (R-TX)), the new, one-size-fits-all, Washington-knows-best MOA approach contradicts with the legislative intent of the program. Smith noted at a House Homeland Security Committee hearing in March that “the goal was to really enable those local law enforcement authorities who wanted to enforce the immigration laws in whatever way they thought best…and that’s really a decision made by the government in individual situations.” (House Homeland Security Committee Hearing, March 4, 2009).

In addition, ICE’s new emphasis on aligning 287(g) with “the identification and removal of criminal aliens” is another departure from Congress’ intent. According to Smith, 287(g) MOAs should be tailored to suit the needs of law enforcement agencies who elect to participate in the program, “and that might or might not include those who have committed serious crimes.” (Id.).  DHS’ announcement eliminates much needed flexibility in the program that has helped local government tailor the MOAs to meet their local needs.  A January 2009 Government Accountability Office (GAO) report confirming Rep. Smith’s statement regarding the focus of the 287(g) program calls into question the DHS decision, which could dramatically undermine the effectiveness of the program.  According to GAO, “Section 287(g) and its legislative history do not detail…which removable aliens should be prioritized for removal.”  (GAO Report, January 2009)…


Schumer Pushes Amnesty Bill by Labor Day, Despite the Objections of the American People

Last week, Senator Chuck Schumer (D-NY), chairman of the Senate Immigration Subcommittee, declared that he expects to have a new amnesty bill ready by Labor Day. (The Associated Press, July 8, 2009).  This announcement came on the heels of a report released by an Independent Task Force of the Council on Foreign Relations (CFR) (The Washington Post, July 9, 2009), co-chaired by former Florida governor Jeb Bush and former Clinton White House chief of staff Thomas McLarty. The Task Force concluded that an amnesty program “is necessary and warranted for many illegal immigrants living in the United States.” (Council on Foreign Relations Independent Task Force Report No. 63, July 8, 2009).

Senator Schumer’s declaration and the conclusion of the CFR Task Force are out-of-touch with the views of the American people as evidenced by a recently released Rasmussen poll.  According to Rasmussen, this latest push for amnesty comes at a time when most voters don’t view immigration as a priority issue. Instead of passing an amnesty bill, 66% of likely voters say it is very important for the government to improve its enforcement of the borders and reduce illegal immigration.  In addition, 75% of voters believe that the federal government is not doing enough to secure the nation’s borders. (Rasmussen Reports, July 7, 2009).  The American people understand that amnesty would allow the more than 12 million illegal aliens in the United States to begin openly competing for any available jobs with the nearly 14.7 million American workers who are currently out of work.  (See FAIR’s Amnesty and Joblessness Report, July 2009).

map_us_outline_tuitionStates with In-State Tuition Laws (Source: NumbersUSA)


Obama Revives Bush Idea to Catch Illegal Workers

By Spencer S. Hsu – Washington Post Staff Writer – Thursday, July 9, 2009

President Obama will abandon a controversial immigration crackdown, sought by his predecessor, to pressure U.S. companies to fire 9 million workers with suspect Social Security numbers, Homeland Security Secretary Janet Napolitano announced yesterday.

Instead, Obama will mandate that federal contractors confirm the identities of 4 million workers against federal databases beginning in September, pushing ahead under pressure from Senate Republicans with another long-stalled Bush administration initiative.

Napolitano said her department will rescind a 2007 rule, tied up in federal court, that would have sent Social Security “no-match” letters to 140,000 U.S. employers. The notices were to warn companies to resolve discrepancies or fire suspect workers within 90 days, or face criminal penalties.

Instead, she said, the Department of Homeland Security will take a “more modern and effective” approach, ordering an estimated 170,000 federal contractors to confirm employees’ work documents against E-Verify, until now a voluntary electronic government system for companies to check new hires’ immigration and Social Security data.

Combined with a renewed emphasis by the DHS on targeting companies that hire illegal immigrants with civil fines and audits instead of high-profile raids, the moves mark the clearest sign yet of Obama’s efforts to chart a middle course on immigration enforcement, analysts said.

The administration’s announcement appeared aimed at satisfying law-and-order conservatives on Capitol Hill, where Senate Republicans successfully amended Homeland Security’s $43 billion 2010 budget yesterday to extend E-Verify to federal contractors and to expand construction of fencing on the U.S.-Mexico border.

“The American people have made it clear that immigration reform should start with better enforcement of the laws already on the books,” said Sen. Jeff Sessions (Ala.), the ranking Republican on the Senate Judiciary Committee. “Making [E-Verify] permanent and mandatory for federal contractors would be a big step toward meeting the public’s expectations.”

At the same time, Obama has told immigrant advocacy groups that Congress should try to overhaul the nation’s immigration laws within the coming year with the support of business groups and organized labor, all of whom had bitterly opposed the no-match rule.

“The Obama administration is trying to find its voice and put forward a coherent enforcement strategy,” said Angela Kelley, immigration analyst at the left-leaning Center for American Progress. “They’re looking for solid footing on enforcement so they can move on to what is the unknown territory” of broader legislation addressing the fate of 12 million illegal immigrants and the future flow of foreign workers, she said.

The complexity of navigating a centrist course, however, was revealed yesterday by the mixed reaction to Napolitano’s announcement.

As expected, business groups such as the U.S. Chamber of Commerce hailed the decision to kill the no-match rule. Since October 2007, a federal judge had held up the rule, acknowledging arguments by critics that the Bush administration failed to consider the impact on small businesses and that the rule could lead to discrimination against many legal workers because of millions of errors in the government’s Social Security databases.

But Angelo I. Amador, a spokesman for the Chamber, said business groups will continue to fight the contractor requirement in federal court, arguing that Congress never intended to make participation in the worker verification program mandatory.

“As of right now, our position remains that the rule as written is unconstitutional,” Amador said…




More of the Same From Mr. Obama

Saturday, July 11, 2009

The July 9 news story “Obama Revives Bush Idea to Catch Illegal Workers” said that the Obama administration will not force 9 million American workers with suspect Social Security numbers to provide evidence of their identity and the legitimacy of their numbers to retain their jobs. This lack of strict enforcement also may contribute to illegitimate voting.

While unemployment among people carrying legitimate Social Security numbers is nearing 10 percent, as many as 9 million unknown fabricators are allowed to continue working.

I voted for President Obama because he promised to bring change and accountability to Washington, but it is beginning to seem as if he is of the same ilk as his predecessor. George W. Bush is clearly not off the hook for his failure to act on this security issue. He did nothing for close to eight years but talk about doing something. Though there are implications here for homeland security, it is politics as usual — one politician setting up the other to try to gain an advantage. But in Mr. Obama’s case, he promised to stop it. It is simple: This is sanctioned identity fraud.



US Census Bureau; demographer Leon Bouvier; Roy Beck, Numbers USA (Source: CAIR)


Homeland Security Department Guts Workplace Enforcement

by James Jay Carafano, Ph.D. WebMemo #2535 July 10, 2009

This week, the Department of Homeland Security (DHS) announced it plans to kill some responsible, reasonable workplace verification rules. As a result, the department will perform less–not more–workplace checks.

This announcement undercuts the claim that the department is interested in “smart and tough” immigration enforcement.Effective workplace enforcement is vital, as employment is the principal draw for illegal immigrants to come to the United States. They come here for the jobs. Enforcing workplace laws is a vital component to create disincentives to unlawful immigration. Congress should not authorize or fund efforts to scale back workplace enforcement.

What DHS Did: Giving the Green Light to Employers to Hire Unauthorized Aliens

Homeland Secretary Janet Napolitano announced today that the department intends to rescind the 2007 Social Security No-Match Rule, a rule designed to clarify the obligations employers had with respect to knowingly hiring unauthorized aliens.

No-match letters are not new and are a tested component of the Social Security system, in use for nearly 30 years. The Social Security Administration (SSA) is required to track workers’ wage histories and collects this information from the W-2 forms that employers submit each year for each employee. Each year, the SSA receives 8-11 million W-2 forms containing names and Social Security numbers that do not match the information in its records. In 1994, SSA started sending no-match letters to employers who submitted 10 or more W-2 forms that could not be matched to SSA records or who have no-matches for more than one-half of 1 percent of their workforces. The majority of the individuals named in the no-match letters sent to employers are aliens unauthorized to work in the United States.

Under the Immigration Reform and Control Act of 1986 (IRCA), it is illegal to “knowingly” employ an alien unauthorized to work in the United States. However, some employers were uncertain as to whether receiving a no-match letter amounted to constructive knowledge that an employee was unauthorized to work. Many employers took advantage of this uncertain state of affairs and did little or nothing upon receipt of a no-match letter.

Therefore, in August 2007, the Immigration and Naturalization Service (INS) promulgated a formal rule on no-match letters to ensure greater uniformity of enforcement and to clarify the definition of “constructive knowledge.” The rule carved out a safe harbor for employers who receive no-match letters and spelled out what employers must do upon receipt of a no-match letter.

The new rule and guidance were an attempt to inform employers of their obligations under IRCA and of the risk they run by turning a blind eye to their employees’ false or forged credentials. Anti-enforcement groups were quick to protest, admitting that this new approach would actually have an impact on illegal employment. They sued, and in October 2007 a federal court issued a preliminary injunction against enforcement of the rule on the grounds that DHS did not sufficiently justify its change in policy among other things.

Subsequently, DHS provided its justification for the change in policy and amended the proposed rule in compliance with the court’s order. There is every reason to believe that the Administration would ultimately succeed in court if it pressed forward with this lawsuit. The amended proposed rule would become law, and employers would have the specific guidance they need to be in compliance with IRCA.

What DHS Did Wrong

Instead, the department said it will no longer seek to issue revised no-match letters and rely solely on a “more modern and effective E-Verify system.” Through E-Verify, participating employers can instantly check the work eligibility status of new hires through a secure online service that compares information from an employee’s I-9 form against SSA and DHS databases. This service is provided free to employers (though the individual companies must bear the cost of providing the infrastructure and people to enter the data). The system has proven to be quite effective, and SSA and DHS continue to work to improve service, reliability, and privacy protections.

The department also announced “the Administration’s support for a regulation that will award federal contracts only to employers who use E-Verify to check employee work authorization.” This is unobjectionable and in fact merely a continuance of the previous Administration’s plans and not a new initiative.

E-Verify is an excellent program. It is, however, not mandatory for all employers. Thus, the first consequence of not issuing no-match letters–and failing to allow DHS to check the no-match data compiled by SSA to identify employers who habitually scoff workplace at immigration laws–is that DHS will be doing less workplace enforcement, not more. In addition, it is not fully clear whether this Administration will fully comply with the intent of the previous Administration to apply E-Verify to all federal contract employees.

If, for example, E-Verify were applied only to new employees hired specifically for the contract work, then for instance, if a construction firm hires an unlawfully present individual and then one week later assigns him to work on a federal contract project, this unlawful individual would be considered an “existing employee” not subject to E-Verify.This Administration must craft the E-Verify rules to apply to all existing employees working for the federal government (a rule in place in the Bush Administration) and under federal government contracts; otherwise the result would be less work place enforcement, not more. That is unacceptable.


The DHS press release stated that the department was abandoning “no-match” because it had been challenged in the courts and an injunction was issued byDistrict Judge Charles Breyer. This statement is at odds with an announcement last year by the department when it proposed a revised rule on issuing no-match letters. Then, the department argued “additional detail provided in the proposal is enough to have the injunction lifted.” In fact, the Bush Administration amended the proposed rule consistent with Judge Breyer’s ruling, and there is every reason to believe that he would be forced to lift the stay if this Administration pushed the issue in court with him. Conversely, the press announcement did not note that the department’s efforts to have E-Verify apply to federal contractors has also been challenged in court. Indeed, any efforts at real workplace enforcement are likely to be challenged in the courts. Offering court challenges as an excuse to make bad public policy is unacceptable as well.

Moving Forward

One hundred percent verification of workplace enforcement is already a requirement by law.In order to curtail illegal immigration, this statute should finally be enforced by moving toward requiring all employers to use E-Verify to confirm the employment eligibility of all new hires and current employees.

Government policy should be based on the principles of empowerment, deterrence, and information. It should empower honest employers by giving them the tools to determine quickly and accurately whether a new hire is an authorized worker. It should hold employers free from penalty if they inadvertently hire an illegal worker after following the prescribed procedures.

Government should perform this verification in the most efficacious manner possible, one that is cost-effective; protects individual data and privacy; minimizes the burden on employers; and addresses concerns over security, public safety, and enforcement of workplace and immigration laws. Nothing less is acceptable. E-Verify is an important component of this effort and must be authorized as a permanent program and fully funded by the Congress and its use expanded by the government as practicable. Unitl E-Verify is more broadly adopted throughout the U.S. workforce, E-Verify must be complemented by a robust no-match letter process that assists employers by specifically spelling out their obligations. By rescinding the 2007 no-match letter amended rule, the Administration is effectively saying that it will not enforce the law against employing illegal immigrants for the overwhelming bulk of U.S. employers. It is giving employers of unauthorized aliens legal cover and an excuse not to follow IRCA. The new policy is an “open door” to hiring illegal immigration at a time of near record-high unemployment among American workers.

Rather than kill 2007 amended rule on “no-match” letters, a far better policy would be to retain the letter option and, in addition, for the SSA to routinely share no-match data directly with DHS. This can be done in a manner that does not risk individual employees’ sensitive information or civil liberties. With this data, DHS could more efficiently target employers who willfully hire unlawfully present labor.

Congress Must Act

The right approach to immigration enforcement is to combine “no-match” letters and greater data sharing between DHS and SSA with a reasonable and robust E-Verify program. The outline of the plan announced by DHS today may in the not too distant future leave America with neither. Consequently, Congress should:

  • Reject the plan announced by DHS to abandon the 2007 amended “no-match” letter rule;
  • Establish in law the authority for SSA and DHS to routinely and appropriately share SSA data in a manner that respects and safeguards personal information and the right to privacy;
  • Permanently authorize E-Verify and fund DHS to continue to expand and improve the program;
  • Require the department to issue a report explaining what is meant by “smart and tough enforcement” and each component of its workplace and immigration enforcement strategy;
  • Direct the General Accountability Office to evaluate the department’s workplace enforcement strategy; and
  • Defer major immigration or border security enforcement reform legislation until the Administration implements a comprehensive, suitable, feasible, and acceptable policy for workplace and immigration enforcement.

It is the responsibility of Homeland Security to enforce the law in a manner that is both reasonable and effective. This week’s announcement fails that test. Congress should not let it stand.

James Jay Carafano, Ph.D., is Assistant Director of the Kathryn and Shelby Cullom Davis Institute for International Studies and Senior Research Fellow for National Security and Homeland Security in the Douglas and Sarah Allison Center for Foreign Policy Studies at The Heritage Foundation.

Heritage Copyright Notice



US Census Bureau – Statistical Yearbook – Immigration and Naturalization Service — Averages: 178,000 per year from 1925-1965, 195,000 per year from 1921-1970 (Source: CAIR)


Secretary Napolitano Strengthens Employment Verification with Administration’s Commitment to E-Verify

Release Date: July 8, 2009

For Immediate Release
Office of the Press Secretary
Contact: 202-282-8010

Department of Homeland Security (DHS) Secretary Janet Napolitano today strengthened employment eligibility verification by announcing the Administration’s support for a regulation that will award federal contracts only to employers who use E-Verify to check employee work authorization. The declaration came as Secretary Napolitano announced the Department’s intention to rescind the Social Security No-Match Rule, which has never been implemented and has been blocked by court order, in favor of the more modern and effective E-Verify system.

“E-Verify is a smart, simple and effective tool that reflects our continued commitment to working with employers to maintain a legal workforce,” said Secretary Napolitano. “Requiring those who seek federal contracts to use this system will create a more reliable and legal workforce. The rule complements our Department’s continued efforts to strengthen immigration law enforcement and protect critical employment opportunities. As Senator Schumer and others have recognized, we need to continue to work to improve E-Verify, and we will.”

E-Verify, which compares information from the Employment Eligibility Verification Form (I-9) against federal government databases to verify workers’ employment eligibility, is a free web-based system operated by DHS in partnership with the Social Security Administration (SSA). The system facilitates compliance with federal immigration laws and helps to deter unauthorized individuals from attempting to work and also helps employers avoid employing unauthorized aliens.

The federal contractor rule extends use of the E-Verify system to covered federal contractors and subcontractors, including those who receive American Recovery and Reinvestment Act funds.  After a careful review, the Administration will push ahead with full implementation of the rule, which will apply to federal solicitations and contract awards Government-wide starting on September 8, 2009.

On average, one thousand employers sign up for E-Verify each week, totaling more than 134,000 employers representing more than half a million locations nationwide. Westat, an independent research firm, found that 96.9 percent of all queries run through E-Verify are automatically confirmed work-authorized within 24 hours. The figure is based on statistics gathered from October through December 2008. Since October 1, 2008, E-Verify has processed more than six million queries.  In an April 2009 American Customer Satisfaction Index Survey of over a thousand E-Verify participants, E-Verify scored 83 out of a possible 100 points—well above the latest federal government satisfaction index of 69 percent.

In addition to expanding participation, DHS continues to enhance E-Verify in order to guard against errors, enforce compliance, promote proper usage, and enhance security. Recent E-Verify advancements include new processes to reduce typographical errors and new features to reduce initial mismatches. In May 2008, DHS added access to naturalization database records which increased the program’s ability to automatically verify naturalized citizens’ status, reducing citizenship-related mismatches by 39 percent. Additionally, in February 2009, the agency incorporated Department of State passport data in the E-Verify process to reduce mismatches among foreign-born citizens.  Other initiatives underway will bring further improvements to Federal database accuracy; add new tools to prevent fraud, misuse, and discrimination; strengthen training, monitoring, and compliance; and enhance privacy protections.

DHS will be proposing a new regulation rescinding the 2007 No-Match Rule, which was blocked by court order shortly after issuance and has never taken effect.  That rule established procedures that employers could follow if they receive SSA No-Match letters or notices from DHS that call into question work eligibility information provided by employees. These notices most often inform an employer many months or even a year later that an employee’s name and Social Security Number provided for a W-2 earnings report do not match SSA records—often due to typographical errors or unreported name changes.  E-Verify addresses data inaccuracies that can result in No-Match letters in a more timely manner and provides a more robust tool for identifying unauthorized individuals and combating illegal employment.

As Governor of Arizona, Secretary Napolitano signed legislation mandating all employers in the State use E-Verify. Implementation of this legislation has received high marks from employers across Arizona and the USCIS Ombudsman (in a December 2008 report). For more information on E-Verify, visit


Federal Contractor rule delayed until September 8, 2009

(Link/Emphasis mine)

The effective date of the final rule requiring certain federal contractors and subcontractors to use E-Verify has been delayed until September 8, 2009.

The rule will only affect federal contractors who are awarded a new contract after September 8, 2009 that includes the Federal Acquisition Regulation (FAR) E-Verify clause (73 FR 67704).

Federal contractors may NOT use E-Verify to verify current employees until the rule becomes effective and they are awarded a contract that includes the FAR E-Verify Clause.

The new rule implements Executive Order 12989, as amended by President George W. Bush on June 6, 2008, directing federal agencies to require that federal contractors agree to electronically verify the employment eligibility of their employees.   The amended Executive Order reinforces the policy, first announced in 1996, that the federal government does business with companies that have a legal workforce. This new rule requires federal contractors to agree, through language inserted into their federal contracts, to use E-Verify to confirm the employment eligibility of all persons hired during a contract term, and to confirm the employment eligibility of federal contractors’ current employees who perform contract services for the federal government within the United States. You can read frequently asked questions about this new rule in the link below.



[Federal Register: November 14, 2008 (Volume 73, Number 221)]

[Rules and Regulations] [Page 67651-67705]

From the Federal Register Online via GPO Access [] [DOCID:fr14no08-30]

[[Page 67651]]





48 CFR Parts 2, 22, and 52

[FAC 2005-29; FAR Case 2007-013; Docket 2008-0001; Sequence 1] RIN 9000-AK91

Federal Acquisition Regulation; FAR Case 2007-013, Employment Eligibility Verification

AGENCIES: Department of Defense (DoD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.


SUMMARY: The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (Councils) have agreed on a final rule amending the Federal Acquisition Regulation (FAR) to require certain contractors and subcontractors to use the E-Verify system administered by the Department of Homeland Security, U.S. Citizenship and Immigration Services, as the means of verifying that certain of their employees are eligible to work in the United States.

DATES: Effective Date: January 15, 2009.

Applicability Date: Contracting Officers should modify, on a bilateral basis, existing indefinite-delivery/ indefinite-quantity contracts in accordance with FAR 1.108(d)(3) to include the clause for future orders if the remaining period of performance extends at least six months after the final rule effective date, and the amount of work or number of orders expected under the remaining performance period is substantial.

FOR FURTHER INFORMATION CONTACT: Ms. Meredith Murphy, Procurement Analyst, at (202) 208-6925 for clarification of content. For information pertaining to status or publication schedules, contact the FAR Secretariat at (202) 501-4755. Please cite FAC 2005-29, FAR case 2007-013.


A. Background and Purpose

Employment Eligibility Verification Requirements

As explained more fully in the proposed rule, the Federal Property and Administrative Services Act of 1949 (FPASA), authorizes the President to “prescribe policies and directives” governing procurement policy “that the President considers necessary to carry out” that Act and that are “consistent” with the Act’s purpose of “provid[ing] the Federal Government with an economical and efficient” procurement system. 40 U.S.C. 101, 121.

On June 6, 2008, the President exercised this authority and the authority vested in him under section 301 of Title 3 of the United States Code in issuing Executive Order 13465 “Economy and Efficiency in Government Procurement through Compliance with Certain Immigration and Nationality Act Provisions and the Use of an Electronic Employment Eligibility Verification System.”

73 FR 33285, Jun. 11, 2008, amending Executive Order 12989 (signed February 13, 1996, published February 15, 1996 at 61 FR 6091), previously amended by Executive Order 13286 (signed February 28, 2003, published March 5, 2003 at 68 FR 10619).

As amended, Executive Order 12989 now provides, at Section 5.(a), that “Executive departments and agencies that enter into contracts shall require, as a condition of each contract, that the contractor agree to use an electronic employment eligibility verification system designated by the Secretary of Homeland Security to verify the employment of: (i) All persons hired during the contract term by the contractor to perform employment duties within the United States; and (ii) all persons assigned by the contractor to perform work within the United States on the Federal contract.”

The Executive Order also requires, at Section 5.(c), that the Secretary of Defense, the Administrator of General Services and the Administrator of the National Aeronautics and Space Administration “amend the Federal Acquisition Regulation to the extent necessary and appropriate to implement the * * * employment eligibility verification responsibility * * * assigned to heads of departments and agencies under this order.”

On June 9, 2008, the Secretary of Homeland Security designated the “E-Verify system, modified as necessary and appropriate to accommodate the policy set forth in the Executive Order * * * as the electronic employment eligibility verification system to be used by Federal contractors.” (See 73 FR 33837, Jun. 13, 2008.)

This final rule responds to these requirements, and the Secretary’s designation, by amending the FAR to require certain Federal contractors and subcontractors to use the E-Verify system (E-Verify) administered by the Department of Homeland Security (DHS), U.S. Citizenship and Immigration Services (USCIS) as the means of verifying that certain of their employees are authorized to work in the United States.

Related Links

Numbers USA: Sign the Petition to Keep Workplace Enforcement Amendments in Homeland Security Spending Bill

Numbers USA: States Pass E-Verify Laws

The Dan Stein Report

WSJ:  Blame the Employers

Note:  The Following Links contain the below documents for viewing on the trusted docstoc website:

E-Verify User Manual revised April 2008

Employment Eligibility Handbook for Employers

Georgia: Security & Immigration Compliance Act – 2006 (Chapter 300-10-1)

North Carolina:  An Introduction to E-Verify


[Federal Register: November 14, 2008 (Volume 73, Number 221)]
[Rules and Regulations]
[Page 67651-67705]
From the Federal Register Online via GPO Access []

[[Page 67651]]





48 CFR Parts 2, 22, and 52

[FAC 2005-29; FAR Case 2007-013; Docket 2008-0001; Sequence 1]
RIN 9000-AK91

Federal Acquisition Regulation; FAR Case 2007-013, Employment
Eligibility Verification

AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.


SUMMARY: The Civilian Agency Acquisition Council and the Defense
Acquisition Regulations Council (Councils) have agreed on a final rule
amending the Federal Acquisition Regulation (FAR) to require certain
contractors and subcontractors to use the E-Verify system administered
by the Department of Homeland Security, U.S. Citizenship and
Immigration Services, as the means of verifying that certain of their
employees are eligible to work in the United States.

DATES: Effective Date: January 15, 2009.
    Applicability Date: Contracting Officers should modify, on a
bilateral basis, existing indefinite-delivery/ indefinite-quantity
contracts in accordance with FAR 1.108(d)(3) to include the clause for
future orders if the remaining period of performance extends at least
six months after the final rule effective date, and the amount of work
or number of orders expected under the remaining performance period is

FOR FURTHER INFORMATION CONTACT: Ms. Meredith Murphy, Procurement
Analyst, at (202) 208-6925 for clarification of content. For
information pertaining to status or publication schedules, contact the
FAR Secretariat at (202) 501-4755. Please cite FAC 2005-29, FAR case


A. Background and Purpose

Employment Eligibility Verification Requirements

    As explained more fully in the proposed rule, the Federal Property
and Administrative Services Act of 1949 (FPASA), authorizes the
President to ``prescribe policies and directives'' governing
procurement policy ``that the President considers necessary to carry
out'' that Act and that are ``consistent'' with the Act's purpose of
``provid[ing] the Federal Government with an economical and efficient''
procurement system. 40 U.S.C. 101, 121. On June 6, 2008, the President
exercised this authority and the authority vested in him under section
301 of Title 3 of the United States Code in issuing Executive Order
13465 ``Economy and Efficiency in Government Procurement through
Compliance with Certain Immigration and Nationality Act Provisions and
the Use of an Electronic Employment Eligibility Verification System.''
73 FR 33285, Jun. 11, 2008, amending Executive Order 12989 (signed
February 13, 1996, published February 15, 1996 at 61 FR 6091),
previously amended by Executive Order 13286 (signed February 28, 2003,
published March 5, 2003 at 68 FR 10619). As amended, Executive Order
12989 now provides, at Section 5.(a), that ``Executive departments and
agencies that enter into contracts shall require, as a condition of
each contract, that the contractor agree to use an electronic
employment eligibility verification system designated by the Secretary
of Homeland Security to verify the employment of: (i) All persons hired
during the contract term by the contractor to perform employment duties
within the United States; and (ii) all persons assigned by the
contractor to perform work within the United States on the Federal
contract.'' The Executive Order also requires, at Section 5.(c), that
the Secretary of Defense, the Administrator of General Services and the
Administrator of the National Aeronautics and Space Administration
``amend the Federal Acquisition Regulation to the extent necessary and
appropriate to implement the * * * employment eligibility verification
responsibility * * * assigned to heads of departments and agencies
under this order.''
    On June 9, 2008, the Secretary of Homeland Security designated the
``E-Verify system, modified as necessary and appropriate to accommodate
the policy set forth in the Executive Order * * * as the electronic
employment eligibility verification system to be used by Federal
contractors.'' (See 73 FR 33837, Jun. 13, 2008.)
    This final rule responds to these requirements, and the Secretary's
designation, by amending the FAR to require certain Federal contractors
and subcontractors to use the E-Verify system (E-Verify) administered
by the Department of Homeland Security (DHS), U.S. Citizenship and
Immigration Services (USCIS) as the means of verifying that certain of
their employees are authorized to work in the United States.

Sacramento Bee — Washington Post — CA BRD of EQ (Bill Analysis) — Miron Essay (Harvard) Marijuana Policy Project



Legal pot could generate $1.4 billion in revenue, tax board says (Emphasis mine)

California could see a nearly $1.4 billion per year increase in state revenues were it to legalize marijuana, the state Board of Equalization says in an analysis of pending legislation to to do that.

The bill (Assembly Bill 390) by Assemblyman Tom Ammiano, D-San Francisco, is still awaiting its first committee hearing and is likely not to be considered until next year. It would impose not only sales taxes but a $50 per ounce fee on marijuana sales, which would be licensed by the state much as alcoholic beverages are regulated.

Today, although considered illegal by federal authorities, California allows limited sales of marijuana for medicinal purposes, subject to local control, in accordance with a ballot measure approved by voters in 1996. And the state imposes sales taxes on those pot transactions. But wider sales would, under the Ammiano bill, be dependent on federal permission.

California is considered by federal authorities to be the nation’s top marijuana producing state with 8.6 million pounds a year, valued at $13.8 billion, making it one of the state’s largest agricultural crops, much of which is exported to other locales.The Board of Equalization analysis concludes that assuming 16 million ounces of marijuana consumption in California a year, legalization under AB 390 would generate $990 million from the $50 per ounce special levy and $392 million in sales taxes.

“We can no longer afford to keep our heads in the sand when it comes to marijuana,” Ammiano said in a statement. “The move towards regulating and taxing marijuana is long overdue and simply common sense. The benefits of regulation are clear – controlling marijuana would generate up to $1.3 billion in much needed revenue for the state, restrict access to only those over 21, end the environmental damage to our public lands from illicit crops, and improve public safety by redirecting law enforcement efforts to more serious crimes.

“It defies reason to propose closing parks and eliminating vital services for the poor while this potential revenue is available. California has an historic opportunity to be the first state in the nation to enact a smart, responsible public policy for the control and regulation of marijuana.”


In Calif., Medical Marijuana Laws Are Moving Pot Into the Mainstream

By Karl Vick, Sunday, April 12, 2009; Page A03 (Emphasis mine)

LOS ANGELES — With little notice and even less controversy, marijuana is now available as a medical treatment in California to almost anyone who tells a willing physician he would feel better if he smoked.

Pot is now retailed over the counter in hundreds of storefronts across Los Angeles and is credited with reviving a section of downtown Oakland, where an entrepreneur sells out classes offering “quality training for the cannabis industry.” The tabloid LA Journal of Education for Medical Marijuana is fat with ads for Magic Purple, Strawberry Cough and other offerings in more than 400 “dispensaries” operating in the city.

Los Angeles officials say applications for retail outlets surged after Feb. 26, when U.S. Attorney General Eric H. Holder Jr. announced that the Drug Enforcement Administration will no longer raid such stores. Those pressing for change in drug laws regard the announcement as a watershed in a 40-year battle against marijuana’s official listing as a dangerous drug — a legal fight that, in California, is being waged on ground that has shifted dramatically toward acceptance.

All told, 13 states have legalized medical marijuana, a trend advocates credit in part to growing openness to alternative healing. As a “Schedule 1″ drug under the 1970 federal narcotics act, marijuana officially has “no currently accepted medical use.” But doctors have found it effective in reducing nausea, easing glaucoma, and improving appetite and sleep in AIDS patients…


But in California, pot is such a booming growth industry that lawmakers are being asked to consider its potential as a salve to the state’s financial woes. Betty Yee, chairman of the California State Board of Equalization, endorsed a bill in February to regulate the estimated $14 billion marijuana market, citing the state’s budget problems. California currently collects $18 million in sales taxes from marijuana dispensaries, and Yee said a regulated pot trade would bring in $1.3 billion.

“I think the tide is starting to turn in terms of marijuana being part of the mainstream,” she said. “The pieces seem to be falling into place.”

…The new reality can be disorienting. In Mendocino County, the heart of Northern California’s “Emerald Triangle,” marijuana farming has been openly tolerated since the arrival of counterculture refugees in the late 1960s. But elected officials say they are being forced to crack down on growers who offended neighbors with aggressive farming after medical marijuana laws hastened pot’s shift from the black market to a gray zone.

Prop. 215 opened up a new world for people who had been underground,” said Scott Zeramby, referencing the 1996 ballot proposition that legalized pot for medical users. By 2007, Zeramby’s garden supply business in the town of Fort Bragg was doing $2.5 million in business amid a land rush by new growers eager to cash in.

“Things were getting a little crazy, even out of hand,” Zeramby said. “What happened? A critical mass.”

…”Medical marijuana, right here, right now,” chants a barker on the Venice Beach Boardwalk, outside the doorway of the Medical Kush Beach Club. “Get legal, right now.”

It really is that easy, the barker explains. Before being allowed to enter the upstairs dispensary and “smoking lounge,” new customers are directed first to the physician’s waiting room, presided over by two young women in low-cut tops. After proving state residence and minimum age (21), customers see a doctor in a white lab coat who for $150 produces a “physician’s recommendation.”

Valid for one year, it is all that California law requires to purchase and smoke eight ounces legally.

Oakland allows anyone with a medical card to cultivate 72 plants — 12 times the number the state legislature suggested in SB 420, which passed in 2003. (Even the title of the bill could be taken for a knowing wink, “420” being subculture code for enjoying marijuana). The bill generously interpreted the ballot initiative, which allowed pot to be dispensed for “any illness for which marijuana provides relief.”

…”They blend in quite well. It’s not what you would expect,” said Gertha Hays, who owns a boutique next door. “You might think it’s going to be drug dealers, all this and that. It’s not like that. And there’s no particular stereotype of who’s a cannabis smoker. It’s all types.”

Some customers walk over from the Alameda County Public Health Department. There, for $103 ($51.50 if on Medi-Cal), residents can upgrade from a simple physician’s recommendation to an official medical marijuana identification card, widely regarded as stronger protection against prosecution.




Date Introduced: 02/23/09 (Emphasis mine)

Bill No: AB 390 Tax: Marijuana Fee Author: Ammiano Related Bills: This analysis will only address the provisions which impact the State Board of Equalization (Board).


Among other things, this bill would impose a fee of fifty dollars ($50) per ounce on the retail sale of marijuana in this state. The Board would be required to administer and collect the fee on or after a specified date, and the funds would be dedicated to drug education, awareness, and rehabilitation programs.


Federal Law. Existing federal law prohibits the manufacture, possession, sale or distribution of marijuana. (21 U.S.C. § 841 et seq.) Congress enacted the Controlled Substances Act, (21 U.S.C. § 801 et seq.) (CSA) as part of the Comprehensive Drug Abuse Prevention and Control Act of 1970. The CSA establishes five “schedules” of certain drugs and other substances designated “controlled substances.” (21 U.S.C. §§802(6), 812(a).) For a drug or other substance to be designated a schedule I controlled substance, it must be found that the substance “has a high potential for abuse,“ have “no currently accepted medical use in treatment in the United States,” and lack accepted safety for use of the drug or other substance under medical supervision.” (21 U.S.C. § 812 (b)(1).)

Federal law lists marijuana as a schedule I controlled substance, deemed to have no accepted medical use. (21 U.S.C. § 812:Schedule I(c)(10).) State Law. Existing state law prohibits, except as authorized by law, the possession, cultivation, transportation, and sale of marijuana and derivatives of marijuana. (Health and Safety Code Sections 11357, 11358, 11359, and 11360.) Existing state law, as authorized under The Compassionate Use Act of 1996 (Proposition 215 of 1996), allows a patient or the patient’s primary caregiver to cultivate or possess marijuana for the patient’s medical use when recommended by a physician, as specified. (Health and Safety Code Section 11362.5) Under existing law, there is no fee imposed on the possession, sale, transport or cultivation of marijuana or derivatives of marijuana.

Under existing Sales and Use Tax Law (Part 1 (commencing with Section 6001) of Division 2 of the Revenue and Taxation Code), sales tax is imposed on all retailers for the privilege of selling tangible personal property at retail in this state, except where specifically exempted by statute. Tangible personal property is defined in law to mean any personal property which may be seen, weighed, measured, felt, or touched, or which is in any other manner perceptible to the senses. Therefore, under the law, retail sales of marijuana and any other illegal drugs or property, are subject to sales or use tax to the same extent as is any lawful retail sale of tangible personal property. This staff analysis is provided to address various administrative, cost, revenue and policy issues; it is not to be construed to reflect or suggest the Board’s formal position.


Assembly Bill 390 (Ammiano) Page 2


This bill would, among other things, add Part 14.6 (commencing with Section 34001) to Division 2 of the Revenue and Taxation Code (RTC) to enact the Marijuana

Supplemental Fee Law.

This bill would impose a fee of fifty dollars ($50) per ounce for the sale of marijuana sold at retail in this state on or after the date determined by Business and Professions Code (BPC) Section 25406. BPC Section 25406 provides that the bill’s provisions shall be enforced when the later of the following has occurred: (1) 30 days after the operative date of the regulations issued pursuant to Chapter 14.5 (commencing with Section 25400) of Division 9 of the BPC (added by this bill), or 2) 30 days after the date when federal law permits the possession and sale of marijuana consistent with BPC Chapter 14.5. Definitions.

This bill would define “marijuana,” for purposes of imposing the supplemental fee under the RTC, to include all marijuana, concentrated cannabis, and their derivatives, except that marijuana containing less than one-half of 1 percent tetrahydrocannabinol by weight is not subject to this supplemental fee. The bill provides that this fee shall not be imposed on marijuana used medicinally with a doctor’s recommendation as specified in Health and Safety Code Section 11362.5, which is known and cited as The Compassionate Use Act of 1996.

This bill would also define “retailer,” for purposes of imposing the supplemental fee, to mean any retailer licensed pursuant to BPC Section 23394.1 who sells marijuana at retail. BPC Section 23394.1 provides that an off-sale general license authorizes the sale, to consumers only and not for resale, of marijuana, concentrated cannabis, or any of its derivatives pursuant to the provisions of BPC Chapter 14.5.

Collection and Administration. Returns and payments, determinations, collections of fees, overpayments and refunds, and administration required under the provisions of this bill would be governed by Chapters 5, 6, 7, and 8 of the Sales and Use Tax Law. The Board would be required to enforce the provisions and may prescribe, adopt, and enforce rules and regulations relating to the administration and enforcement of this bill.

Disposition of Fund and Adjustment of Fees. Any amounts required to be paid under this part would be deposited into the Drug Abuse Prevention Supplemental Funding Account, which this bill would create in the State’s General Fund. Upon appropriation by the Legislature, the monies in the fund would be used exclusively for drug education, awareness, and rehabilitation programs under the jurisdiction of the Department of Alcohol and Drug Programs. The Department of Alcohol and Drug Programs would be required to review annually the fee imposed under this part to determine whether a lesser fee would provide sufficient resources to support its drug education, awareness, and rehabilitation programs.

Based on this annual review, the Department of Alcohol and Drug Programs would be required to adjust the fee to an amount not to exceed fifty dollars ($50) per ounce of marijuana that is necessary to fund the programs. Other provisions. Under proposed Chapter 14.5, Commercial Marijuana Production and Sale, of Division 9 of the BPC, the Department of Alcoholic Beverage Control (ABC) would license both commercial cultivators of marijuana and wholesalers of marijuana, who would be allowed to package and prepare marijuana for sale and would be authorized to sell marijuana to licensed sales outlets. These provisions would establish fees for the initial application for a license and fees for each annual renewal of a license. This staff analysis is provided to address various administrative, cost, revenue and policy issues; it is not to be construed to reflect or suggest the Board’s formal position.


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Effective and operative date. The provisions of the bill would become effective on January 1, 2010; however, the bill’s provisions would become operative the later of either: (1) 30 days after the operative date of the regulations issued pursuant to Chapter 14.5 of Division 9 of the BPC, or (2) 30 days after the date when federal law permits the possession and sale of marijuana consistent with Chapter 14.5.


As previously stated, in 1996 California voters passed Proposition 215, also known as the Compassionate Use Act of 1996, which allows patients and their primary caregivers to cultivate or possess marijuana for personal medical treatment with the recommendation of a physician, as specified. In 2003, SB 420 (Ch. 875, Vasconcellos, Stats. 2003) was enacted to establish statewide guidelines for Proposition 215 enforcement. In particular, SB 403 clarified that nonprofit distribution is allowed in certain cases for patient cultivation cooperatives, small-scale caregiver gardeners, and dispensing collectives.

However, despite the fact that numerous medical marijuana dispensaries are currently in business in California, the sale of medical cannabis is illegal under federal law. Up until late 2005, the Board’s longstanding policy was to not issue a seller’s permit to a person whose sole selling activity is the unlawful sale of tangible personal property, so as not to confer permissive authority or condone an illegal activity. However, although it was Board policy not to issue seller’s permits, the sale of medical marijuana has always been considered taxable.

In October 2005, the Board changed its policy after hearing a case that came before the Members of the Board involving medical marijuana sales, when the Board recognized the difficulty in reconciling its authority to issue assessments for taxes due from a seller’s marijuana sales while, at the same time, not issuing seller’s permits to such sellers, and also took into account the legality under state law of some sales of marijuana as authorized in SB 420. Now, the Board issues seller’s permits to those medical marijuana sellers that apply and will issue seller’s permits to any other sellers making unlawful sales. As part of the Board’s education outreach efforts, a special notice was mailed to California sellers of medical marijuana to clarify the application of tax to sales of medical marijuana and the requirement that they must hold a seller’s permit.


1. Sponsor and purpose. Assembly Member Ammiano is sponsoring this measure in an effort to generate more revenue for the state by regulating and taxing marijuana in a manner similar to alcohol.

2. Sales of marijuana would be subject to the proposed fee and the sales tax. As previously stated, retail sales of marijuana are subject to tax to the same extent as any other lawful retail sale of tangible personal property. Under the provisions of this bill, a retailer must apply to the ABC to obtain a license to sell marijuana at retail and be liable for the fee on its sales of marijuana in this state. In addition to the proposed fee, a licensed marijuana retailer would be required to apply for a seller’s permit, file returns, and pay sales tax to the Board. This staff analysis is provided to address various administrative, cost, revenue and policy issues; it is not to be construed to reflect or suggest the Board’s formal position.


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It should also be noted that the proposed fee would be included in the amount on which the sales tax would be imposed. Under current law, sales and use tax is due based on the gross receipts or sales price of tangible personal property in this state. The proposed marijuana fee would not be specifically excluded from gross receipts or sales price, so it would be included in the amount on which sales tax is computed.

3. What if marijuana is sold in amounts less than one ounce? It is not clear if the proposed fee would apply to retail sales of marijuana that are sold in amounts of less than one ounce. It is our understanding that medical marijuana is often sold in containers or packages of 1/8 of an ounce. Medical marijuana may also be purchased in the form of cigarette or joint. Would the sale of one or more joints, which would be less than an ounce, be subject to the fee? Would other marijuana products, such as edible products (e.g., brownies) containing marijuana be subject to the fee? This bill would require that the ABC develop an inspection and tracking system to ensure that marijuana may not be sold by an off-sale general licensee if that marijuana has not been assessed the proposed fee. While it is not specific, it appears that the intent of the bill is to make all sales of marijuana made by an off-sale general licensee subject to the proposed fee.

4. Operative date depends on federal changes. BPC Section 25406 provides that the ABC will begin enforcing the bill’s provisions beginning the later of when the following occur: (1) 30 days after the operative date of the regulations issued pursuant to Chapter 14.5 of Division 9 of the BPC, or (2) 30 days after the date when federal law permits the possession and sale of marijuana consistent with Chapter 14.5. Therefore, it appears the fee would be imposed on the retail sale of marijuana when such sale is permitted by the federal government. As the Board would require sufficient time to implement the fee collection provisions of the bill, it is recommended that the bill be revised to set an operative date for imposition and collection of the fee to be, e.g., the first day of the quarter beginning no less than 180 days after the later of the two events occurs.

5. The bill provides for three types of licenses issued by the ABC. The ABC would be responsible for issuing a license to commercial cultivators of marijuana (BPC Section 25401), marijuana wholesalers (BPC Section 25403), and marijuana retailers (BPC Section 23394.1). Marijuana wholesalers are authorized to package and prepare marijuana for sale and are also authorized to sell marijuana to licensed sales outlets. A retailer (off-sale general licensee) would be authorized to sell marijuana to consumers only and not for resale. The ABC is required to adopt and enforce regulations concerning the operations of commercial cultivators of marijuana, the sale and packaging of marijuana by wholesale licensees, and the sale of marijuana by off-sale general licensees. These regulations shall include an inspection and tracking system to ensure that marijuana cultivated, distributed, and ultimately sold by an off-sale general licensee is assessed the proposed fee.

6. Proposed fee should reference the Fee Collections Procedures Law. As written, the proposed fee, to the extent feasible, would be administered and collected in a manner consistent with the Sales and Use Tax Law, including the returns and payments, determinations, collections of fees, overpayments and refunds. However, since this fee does not parallel the sales and use tax, it is This staff analysis is provided to address various administrative, cost, revenue and policy issues; it is not to be construed to reflect or suggest the Board’s formal position.


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Recommended that the administrative provisions be placed under the Fee Collections Procedures Law (Part 30 (commencing with Section 55001) of Division 2, of the Revenue and Taxation Code). The Fee Collection Procedures Law contains “generic” administrative provisions for the administration and collection of fee programs to be administered by the Board. The Fee Collection Procedures Law was added to the Revenue and Taxation Code to allow bills establishing a new fee to reference this law, thereby only requiring a minimal number of sections within the bill to provide the necessary administrative provisions.

Among other things, the Fee Collection Procedures Law includes collection, reporting, refund and appeals provisions, as well as providing the Board the authority to adopt regulations relating to the administration and enforcement of the Fee Collection Procedures Law. The bill should also be amended to specify a due date for the fee and return and to authorize the payment of refunds on overpayments of the fee. Staff will work with the author’s office to address these issues as the bill progresses through the legislative process.

7. Disposition of proceeds – refund payments and administrative costs. While the bill provides that the any amount required to be paid to the State be deposited in the Drug Abuse Prevention Supplemental Funding Account in the State’s General Fund, which this bill creates, and be expended exclusively for drug education, awareness, and rehabilitation programs, the bill does not specify how payments for refunds and the Board’s administrative costs would be funded. The bill should be amended to address this issue.

8. The Board would need adequate time to notify feepayers of any reduction in the fee. The ABC would be required annually to review the proposed fee to determine whether a lesser fee would provide sufficient resources to support its drug education, awareness, and rehabilitation programs. It is suggested that the bill be amended to specify a date by which the ABC must notify the Board of a change in the fee rate, prior to the date the change would be effective, to provide Board staff sufficient time to notify feepayers of any fee rate change.

9. Legal challenges of any new fee program might be made on the grounds that the fee is a tax. In July 1997, the California Supreme Court held in Sinclair Paint Company v. State Board of Equalization (1997) 15 Cal.4th 866 that the Childhood Lead Poisoning Prevention Act of 1991 imposed bona fide regulatory fees and not taxes requiring a two-thirds vote of the Legislature under Proposition 13.

In summary, the Court found that while the Act did not directly regulate by conferring a specific benefit on, or granting a privilege to, those who pay the fee, it nevertheless imposed regulatory fees under the police power by requiring manufacturers and others whose products have exposed children to lead contamination to bear a fair share of the cost of mitigating those products’ adverse health effects.

Although this measure has been keyed by the Legislative Counsel as a majority vote bill, opponents of this measure might question whether the fees imposed are in legal effect “taxes” required to be enacted by a two-thirds vote of the Legislature. This staff analysis is provided to address various administrative, cost, revenue and policy issues; it is not to be construed to reflect or suggest the Board’s formal position.


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The Board would incur substantial administrative costs in creating a new fee program, identifying and notifying affected feepayers, developing computer programs, developing returns and supplemental schedules, developing publications and regulations, preparing and mailing special notices, training staff, and responding to numerous inquiries from affected feepayers and the public. This bill provides that the proposed fee would not be enforced until federal law permits the possession and sale of marijuana consistent with the provisions under the BPC. An estimate of these costs is pending.


Under this measure, the definition of marijuana includes all marijuana, concentrated cannabis, and their derivatives, except that marijuana containing less than one-half of one percent tetrahydrocannabinol by weight is not subject to this fee. Further, the measure provides that this fee shall not be imposed on marijuana used medicinally with a doctor’s recommendation as specified in Health and Safety Code Section 11362.5.

According to the report titled Marijuana Production in the United States (2006), an estimated 22.3 million pounds of marijuana was grown in the U.S. in 2006 with a value of $35.8 billion. California was the top producing state; it produced 8.6 million pounds with a value of $13.8 billion. The report also discusses that, although most marijuana is produced for local, in-state use, California is considered an export state in which marijuana is produced for both in-state use and export to other states. Our literature review indicates that estimated consumption of marijuana in California amounts to one million pounds per year, or 16 million ounces.

Based on the estimated 16 million ounces of annual consumption in California and several assumptions (which are summarized in the Qualifying Remarks section), the revenue effect of the bill is an estimated total annual revenue gain of $1.4 billion, as follows: • $990 million from the proposed $50 per ounce levy on retail sales of marijuana • $392 million in sales tax revenue.

This staff analysis is provided to address various administrative, cost, revenue and policy issues; it is not to be construed to reflect or suggest the Board’s formal position.


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The revenue impact of imposing a $50 per ounce levy on retail sales of marijuana in California would be as follows: Sales and Use Tax Revenue (In Millions of Dollars) Net Excise Revenue Gain $ 990 State (6.00%) $ 263 Fiscal Recovery Fund (0.25%) 11 Local (2.00%) 88 Special District (0.75%) 31 Total Sales and Use Tax Revenue $ 392 Total revenue from the excise tax and sales and use tax $ 1,382 Qualifying Remarks.

This estimate is based on numerous assumptions, all of which come from law enforcement estimates and academic studies. The most significant ones are as follows:

• Legalization of marijuana would cause its street price to decline by 50 percent.

• This 50 percent decline in price would lead to additional consumption of 40 percent.

• The imposition of the $50/ounce tax would then lead to reduced consumption of 11 percent.

Some of the revenue raised would result from additional residents consuming marijuana (that were not doing so when it was prohibited by law) in response to its being legalized.

However, a portion of this additional consumption could be at the expense of cigarettes and alcohol currently being consumed; in other words, there could be a “substitution effect” toward marijuana and away from cigarettes and alcohol. To the extent that this happens, current excise taxes from cigarettes and alcohol would switch to marijuana and the net revenue gain from the bill would be somewhat less than the $1.4 billion number cited above (exactly how much lower is unknown). The same is true with respect to the sales and use tax component of the estimate. In other words, consumers choosing to increase their consumption of marijuana would likely do so by reducing their consumption elsewhere, some of which is subject to the sales and use tax (such as cigarettes), some of which is not (such as groceries and most services).

If consumers are simply switching their consumption toward marijuana and away from some other taxable good, the increase in sales tax revenue from this measure would be less. As currently drafted, this measure stipulates that “each person 21 years of age or older may have in cultivation no more than 10 mature plants at any given time.”Substantial home production would clearly have an impact on the revenues generated . Available research indicates, however, that such production is likely to be minimal.

Analysis prepared by: Debra A. Waltz (916) 324-1890 07/15/09Revenue estimate by: Ronil Dwarka (916) 445-0840 Contact: Margaret S. Shedd (916) 322-2376 ls 0390-1dw.DOC This staff analysis is provided to address various administrative, cost, revenue and policy issues; it is not to be construed to reflect or suggest the Board’s formal position.


The Budgetary Implications of Marijuana Prohibition

June 2005

Jeffrey A. Miron
Visiting Professor of Economics
Harvard University
Cambridge, MA 02138

The Marijuana Policy Project provided funding for the research discussed in this report. Daniel Egan provided excellent research assistance.

Executive Summary

  • Government prohibition of marijuana is the subject of ongoing debate.
  • One issue in this debate is the effect of marijuana prohibition on government budgets. Prohibition entails direct enforcement costs and prevents taxation of marijuana production and sale.
  • This report examines the budgetary implications of legalizing marijuana – taxing and regulating it like other goods – in all fifty states and at the federal level.
  • The report estimates that legalizing marijuana would save $7.7 billion per year in government expenditure on enforcement of prohibition. $5.3 billion of this savings would accrue to state and local governments, while $2.4 billion would accrue to the federal government.
  • The report also estimates that marijuana legalization would yield tax revenue of $2.4 billion annually if marijuana were taxed like all other goods and $6.2 billion annually if marijuana were taxed at rates comparable to those on alcohol and tobacco.
  • Whether marijuana legalization is a desirable policy depends on many factors other than the budgetary impacts discussed here. But these impacts should be included in a rational debate about marijuana policy.


I. Introduction

Government prohibition of marijuana is the subject of ongoing debate. Advocates believe prohibition reduces marijuana trafficking and use, thereby discouraging crime, improving productivity and increasing health. Critics believe prohibition has only modest effects on trafficking and use while causing many problems typically attributed to marijuana itself.

One issue in this debate is the effect of marijuana prohibition on government budgets. Prohibition entails direct enforcement costs, and prohibition prevents taxation of marijuana production and sale. If marijuana were legal, enforcement costs would be negligible and governments could levy taxes on the production and sale of marijuana. Thus, government expenditure would decline and tax revenue would increase.

This report estimates the savings in government expenditure and the gains in tax revenue that would result from replacing marijuana prohibition with a regime in which marijuana is legal but taxed and regulated like other goods. The report is not an overall evaluation of marijuana prohibition; the magnitude of any budgetary impact does not by itself determine the wisdom of prohibition. But the costs required to enforce prohibition, and the transfers that occur because income in a prohibited sector is not taxed, are relevant to rational discussion of this policy.

The policy change considered in this report, marijuana legalization, is more substantial than marijuana decriminalization, which means repealing criminal penalties against possession but retaining them against trafficking. The budgetary implications of legalization exceed those of decriminalization for three reasons. First, legalization eliminates arrests for trafficking in addition to eliminating arrests for possession. Second, legalization saves prosecutorial, judicial, and incarceration expenses; these savings are minimal in the case of decriminalization. Third, legalization allows taxation of marijuana production and sale.

This report concludes that marijuana legalization would reduce government expenditure by $7.7 billion annually. Marijuana legalization would also generate tax revenue of $2.4 billion annually if marijuana were taxed like all other goods and $6.2 billion annually if marijuana were taxed at rates comparable to those on alcohol and tobacco. These budgetary impacts rely on a range of assumptions, but these probably bias the estimated expenditure reductions and tax revenues downward.

The remainder of the report proceeds as follows. Section II estimates state and local expenditure on marijuana prohibition. Section III estimates federal expenditure on marijuana prohibition. Section IV estimates the tax revenue that would accrue from legalized marijuana. Section V discusses caveats and implications.

II. State and Local Expenditure for Drug Prohibition Enforcement

The savings in state and local government expenditure that would result from marijuana legalization consists of three main components: the reduction in police resources from elimination of marijuana arrests; the reduction in prosecutorial and judicial resources from elimination of marijuana prosecutions; and the reduction in correctional resources from elimination of marijuana incarcerations. There are other possible savings in government expenditure from legalization, but these are minor or difficult to estimate with existing data.The omission of these items biases the estimated savings downward.

To estimate the state savings in criminal justice resources, this report uses the following procedure. It estimates the percentage of arrests in a state for marijuana violations and multiplies this by the budget for police. It estimates the percentage of prosecutions in a state for marijuana violations and multiplies this by the budget for prosecutors and judges. It estimates the percentage of incarcerations in a state for marijuana violations and multiplies this by the budget for prisons. It then sums these components to estimate the overall reduction in government expenditure. Under plausible assumptions, this procedure yields a reasonable estimate of the cost savings from marijuana legalization.

The Police Budget Due to Marijuana Prohibition

The first cost of marijuana prohibition is the portion of state police budgets devoted to marijuana arrests.

Table 1 calculates the fraction of arrests in each state due to marijuana prohibition. Column 1 gives the total number of arrests for the year 2000. Column 2 gives the number of arrests for marijuana possession violations. Column 3 gives the number of arrests for marijuana sale/manufacturing violations. Columns 4 and 5 give the ratio of Column 2 to Column 1 and Column 3 to Column 1, respectively; these are the percentages of arrests for possession and sale/manufacture of marijuana, respectively.

The information in Columns 4 and 5 is what is required in the subsequent calculations, subject to one modification. Some arrests for marijuana violations, especially those for possession, occur because the arrestee is under suspicion for a non-drug crime but possesses marijuana that is discovered by police during a routine search. This means an arrest for marijuana possession is recorded, along with, or instead of, an arrest on the other charge. If marijuana possession were not a criminal offense, the suspects in such cases would still be arrested on the charge that led to the search, and police resources would be used to approximately the same extent as when marijuana possession is criminal.

In determining which arrests represents a cost of marijuana prohibition, therefore, it is appropriate to count only those that are “stand-alone,” meaning those in which a marijuana violation rather than some other charge is the reason for the arrest. This issue arises mainly for possession rather than for trafficking. There are few hard data on the fraction of “stand-alone” possession arrests, but the information in Miron (2002) and Reuter, Hirschfield and Davies (2001) suggests it is between 33% and 85%. To err on the conservative side, this report assumes that 50% of possession arrests are due solely to marijuana possession rather than being incidental to some other crime. Thus, the resources utilized in making these arrests would be available for other purposes if marijuana possession were legal. Column 6 of Table 1 therefore indicates the fraction of possession arrests attributable to marijuana prohibition, taking this adjustment into account.

The first portion of Table 2 uses this information to calculate the police budget due to marijuana prohibition in each state. Column 1 gives the total expenditure in 2000 on police, by state. Column 2 gives the product of Column 1 with the sum of Columns 5 and 6 from Table 1. This is the amount spent on arrests for marijuana violations. For 2000, the amount is $1.71 billion.


The Judicial and Legal Budget Due to Marijuana Prohibition

The second main cost of marijuana prohibition is the portion of the prosecutorial and judicial budget devoted to marijuana prosecutions. A reasonable indicator of this percentage is the fraction of felony convictions in state courts for marijuana offenses. Data on this percentage are not available on a state-by-state basis, so this report uses the national percentage. Data on the percentage of possession convictions attributable to marijuana are also not available, so this report assumes it equals the percentage for trafficking convictions.

In 2000 the percent of felony convictions in state courts due to any type of trafficking violation was 22.%. this total, 2.7% was due to marijuana, 5.9% was due to other drugs, and 13.4% was unspecified. This report assumes that the fraction of marijuana convictions in the unspecified category equals the fraction for those in which a specific drug is given, or 31.4% [=2.7%/(2.7%+5.9%)]. The report also assumes that the percentage of possession convictions due to marijuana equals this same fraction. These assumptions jointly imply that the percentage of felony convictions due to marijuana equals the fraction of felony convictions due to any drug offense (34.6%) multiplied by the percentage of trafficking violations due to marijuana (31.4%). This yields 10.9% (=34.6%*31.4%).

The second portion of Table 2 uses this information to calculate the judicial and legal budget due to marijuana prohibition. Column 3 gives the judicial and legal budget, by state. Column 4 gives the product of Column 3 and 10.9%, the percentage of felony convictions due to marijuana violations. This is the judicial and legal budget due to marijuana prosecutions. For 2000, the amount is $2.94 billion.

The Corrections Budget Due to Marijuana Prohibition

The third main cost of marijuana prohibition is the portion of the corrections budget devoted to incarcerating marijuana prisoners. A reasonable indicator of this portion is the fraction of prisoners incarcerated for marijuana offenses.

As with the percentage of prosecutions due to marijuana, state-by-state information on the percentage of prisoners incarcerated for marijuana offenses is not available. Appropriate data do exist for a few states, however, and this percentage is likely to be similar across states. This report therefore computes a population-weighted average based on the few states for which data exist; it then imposes this percentage on all states. This percentage is 1.0%, as documented in Appendix A.

The third portion of Table 2 calculates the corrections budget due to marijuana prohibition. Column 5 gives the overall corrections budget, by state. Column 6 gives the product of Column 5 and 1.0%, the estimated fraction of prisoners incarcerated on marijuana charges. This is the corrections budget devoted to marijuana prisoners. For 2000, the amount is $484 million.

Overall State and Local Expenditure for Enforcement of Marijuana Prohibition

As shown at the bottom of Table 2, total state and local government expenditure for enforcement of marijuana prohibition was $5.1 billion for 2000. This is an overstatement of the savings in government expenditure that would result from legalization, however, for two reasons. First, under prohibition the police sometimes seize assets from those arrested for marijuana violations (financial accounts, cars, boats, land, houses, and the like), with the proceeds used to fund police and prosecutors. Second, under prohibition some marijuana offenders pay fines, which partially offsets the expenditure required to arrest, convict and incarcerate these offenders. The calculations in Appendix B, however, show that this offsetting revenue has been at most $100 million per year in recent years at the state and local level. This implies a net savings of criminal justice resources from marijuana legalization of $5.0 billion in 2000. Adjusting for inflation implies savings of $5.3 billion in 2003.


III. Federal Expenditure for Marijuana Prohibition Enforcement

This section estimates federal expenditure on marijuana prohibition enforcement. There are no data available on expenditure for marijuana interdiction per se; existing data report expenditure on interdiction of all drugs, without separately identifying expenditure aimed at marijuana versus other drugs. It is nevertheless possible to estimate the portion due to marijuana prohibition using the following procedure:

  1. Estimate federal expenditure for all drug interdiction;
  2. Estimate the fraction of this expenditure due to marijuana interdiction based on the fraction of federal prosecutions for marijuana;
  3. Multiply the first estimate by the second estimate.

This provides a reasonable estimate of federal expenditure for marijuana interdiction so long as this expenditure is roughly proportional to the variable being used to determine the fraction of total interdiction devoted to marijuana.

Table 3 displays federal expenditure for drug interdiction. This was $13.6 billion in 2002 (Miron 2003b), and it is the figure that applies for all drugs. To determine expenditure for marijuana interdiction, it is necessary to adjust for the fraction of federal expenditure devoted to marijuana as opposed to other drugs.

Table 3 next shows possible indicators of the relative magnitude of marijuana interdiction as compared to other-drug interdiction. These indicators include use rates, arrest rates, and felony convictions for marijuana versus other drugs. For the purposes here, the most appropriate indicator is the percentage of DEA arrests or convictions for marijuana as opposed to other drugs.

The data therefore indicate that $2.6 billion is a reasonable estimate of the federal government expenditure to enforce marijuana prohibition in 2002.

As with state and local revenue, this figure must be adjusted downward by the revenue from seizures and fines. Appendix B indicates that this amount has been at most $214.2 million in recent years, implying a net savings of about $2.39 million. Adjusting for inflation implies federal expenditure for enforcement of marijuana prohibition of $2.4 billion in 2003.

IV. The Tax Revenue from Legalized Marijuana

In addition to reducing government expenditure, marijuana legalization would produce tax revenue from the legal production and sale of marijuana. To estimate this revenue, this report employs the following procedure. First, it estimates current expenditure on marijuana at the national level. Second, it estimates the expenditure likely to occur under legalization. Third, it estimates the tax revenue that would result from this expenditure based on assumptions about the kinds of taxes that would apply to legalized marijuana. Fourth, it provides illustrative calculations of the portion of the revenue that would accrue to each state.

Expenditure on Marijuana under Current Prohibition

The first step in determining the tax revenue under legalization is to estimate current expenditure on marijuana. ONDCP (2001a, Table 1, p.3) estimates that in 2000 U.S. residents spent $10.5 billion on marijuana. This estimate relies on a range of assumptions about the marijuana market, and modification of these assumptions might produce a higher or lower estimate. There is no obvious reason, however, why alternative assumptions would imply a dramatically different estimate of current expenditure on marijuana. This report therefore uses the $10.5 billion figure as the starting point for the revenue estimates presented below.

Expenditure on Marijuana under Legalization

The second step in estimating the tax revenue that would occur under legalization is to determine how expenditure on marijuana would change as the result of legalization. A simple framework in which to consider various assumptions is the standard supply and demand model. To use this model to assess legalization’s impact on marijuana expenditure, it is necessary to state what effect legalization would have on the demand and supply curves for marijuana.

This report assumes there would be no change in the demand for marijuana. This assumption likely errs in the direction of understating the tax revenue from legalized marijuana, since the penalties for possession potentially deter some persons from consuming. But any increase in demand from legalization would plausibly come from casual users, whose marijuana use would likely be modest. Any increase in use might also come from decreased consumption of alcohol, tobacco or other goods, so increased tax revenue from legal marijuana would be partially offset by decreased tax revenue from other goods. And there might be a forbidden fruit effect from prohibition that tends to offset the demand decreasing effects of penalties for possession. Thus, the assumption of no change in demand is plausible, and it likely biases the estimated tax revenue downward.


Under the assumption that demand does not shift due to legalization, any change in the quantity and price would result from changes in supply conditions. There are two main effects that would operate (Miron 2003a). On the one hand, marijuana suppliers in a legal market would not incur the costs imposed by prohibition, such as the threat of arrest, incarceration, fines, asset seizure, and the like. This means, other things equal, that costs and therefore prices would be lower under legalization. On the other hand, marijuana suppliers in a legal market would bear the costs of tax and regulatory policies that apply to legal goods but that black market suppliers normally avoid. This implies an offset to the cost reductions resulting from legalization. Further, changes in competition and advertising under legalization can potentially yield higher prices than under prohibition.

It is thus an empirical question as to how prices under legalization would compare to prices under current prohibition. The best evidence available on this question comes from comparisons of marijuana prices between the U.S. and the Netherlands. Although marijuana is still technically illegal in the Netherlands, the degree of enforcement is substantially below that in the U.S., and the sale of marijuana in coffee shops is officially tolerated. The regime thus approximates de facto legalization. Existing data suggest that retail prices in the Netherlands are roughly 50-100 percent of U.S. prices.

The effect of any price decline that occurs due to legalization depends on the elasticity of demand for marijuana. Evidence on this elasticity is limited because appropriate data on marijuana price and consumption are not readily available. Existing estimates, however, suggest an elasticity of at least -0.5 and plausibly more than -1.0 (Nisbet and Vakil 1972).

If the price decline under legalization is minimal, then expenditure will not change regardless of the demand elasticity. If the price decline is noticeable but the demand elasticity is greater than or equal to 1.0 in absolute value, then expenditure will remain constant or increase. If the price decline is noticeable and the demand elasticity is less than one, then expenditure will decline. Since the decline in price is unlikely to exceed 50% and the demand elasticity is likely at least -0.5, the plausible decline in expenditure is approximately 25%. Given the estimate of $10.5 billion in expenditure on marijuana under current prohibition, this implies expenditure under legalization of about $7.9 billion.

Tax Revenue from Legalized Marijuana

To estimate the tax revenue that would result from marijuana legalization, it is necessary to assume a particular tax rate. This report considers two assumptions that plausibly bracket the range of reasonable possibilities.

The first assumption is that tax policy treats legalized marijuana identically to other goods. In that case tax revenue as a fraction of expenditure would be approximately 30%, implying tax revenue from legalized marijuana of $2.4 billion. The amount of revenue would be lower if substantial home production occurred under legalization. The evidence suggests, however, that the magnitude of such production would be minimal. In particular, alcohol production switched mostly from the black market to the licit market after repeal of Alcohol Prohibition in 1933.

The second assumption is that tax policy treats legalized marijuana similarly to alcohol or tobacco, imposing a “sin tax” in excess of any tax applicable to other goods. Imposing a high sin tax can force a market underground, thereby reducing rather than increasing tax revenue. Existing evidence, however, suggests that relatively high rates of sin taxation are possible without generating a black market. For example, cigarette taxes in many European countries account for 75–85 percent of the price (US Department of Health and Human Services 2000).

One benchmark, therefore, is to assume that an excise tax on legalized marijuana doubles the price. If general taxation accounts for 30% of the price, this additional tax would then make tax revenue account for 80% of the price. This doubling of the price, given an elasticity of -0.5, would cause roughly a 50% increase in expenditure, implying total expenditure on marijuana would be $11.85 billion (=$7.9 x 1.5). Tax revenue would equal 80% of this total, or $9.5 billion. This includes any standard taxation applied to marijuana income as well as the sin tax on marijuana sales.

The $9.5 billion figure is not necessarily attainable given the characteristics of marijuana production, however. Small scale, efficient production is possible and occurs widely now, so the imposition of a substantial tax wedge might encourage a substantial fraction of the market to remain underground. The assumption of a constant demand elasticity in response to a price change of this magnitude is also debatable; more plausibly, the elasticity would increase as the price rose, implying a larger decline in consumption and thus less revenue from excise taxation. The $9.5 figure should therefore be considered an upper bound.

These calculations nevertheless indicate the potential for substantial revenue from marijuana taxation. A more modest excise tax, such as one that raises the price 50%, would produce revenue on legalized marijuana of $6.2 billion per year.

Distribution of the Marijuana Tax Revenue

hemp_for_warThe estimates of tax revenue discussed so far indicate the total amount that could be collected summing over all levels of government. In practice this total would be divided between state and federal governments. It is therefore useful to estimate how much revenue would accrue to each state, and to state governments versus the federal government, under plausible assumptions.

Table 4a indicates the tax revenue that would accrue to each state and to the federal government under the assumption that each state collected revenue equal to 10% of the income generated by legalized marijuana and the federal government collected income equal to 20%. This is approximately what occurs now for the economy overall, except that the ratio of tax revenues to income varies across states from the 10% figure assumed here. The table indicates that under these assumptions, the federal government would collect $1.6 billion in additional revenue while on average each state would collect $16 million in additional tax revenue.

These calculations ignore the fact that marijuana use rates differ across states, so application of identical policies would yield different amounts of revenue per capita. Wright (2002, Table A.4, p.82), for example, indicates that the percent of those 12 and over reporting marijuana use in the past month ranged in 1999-2000 from a low of 2.79% in Iowa to a high of 9.03% in Massachusetts. Table 4b therefore shows the breakdown of revenue by state under the assumption that tax revenue is proportional to state marijuana use rates. A third possibility, which cannot easily be examined with existing data, is that revenue by state differs depending on the distribution of marijuana production.

V. Summary

This report has estimated the budgetary implications of legalizing marijuana and taxing and regulating it like other goods. According to the calculations here, legalization would reduce government expenditure by $5.3 billion at the state and local level and by $2.4 billion at the federal level. In addition, marijuana legalization would generate tax revenue of $2.4 billion annually if marijuana were taxed like all other goods and $6.2 billion annually if marijuana were taxed at rates comparable to those on alcohol and tobacco.


Baicker, Katherine and Mireille Jacobson (2004), “Finders Keepers: Forfeiture Laws, Policing Incentives, and Local Budgets,” manuscript, Department of Economics, Dartmouth College.

Bates, Scott W. (2004), “The Economic Implications of Marijuana Legalization in Alaska,” Report for Alaskans For Rights & Revenues, Fairbanks, Alaska.

Caputo, Michael R. and Brian J. Ostrom (1994), “Potential Tax Revenue from a Regulated Marijuana Market: A Meaningful Revenue Source,” American Journal of Economics and Sociology, 53, 475-490.

Clements, Kenneth W. and Mert Daryal (2001), “Marijuana Prices in Australia in 1990s,” manuscript, Economic Research Centre, Department of Economics, The University of Western Australia.

Durose, Matthew and Patrick A. Langan (2003), Felony Sentences in State Courts, 2000, Bureau of Justice Statistics, Office of Justices Programs, U.S. Department of Justice, NCJ 198821.

Easton, Stephen T. (2004), “Marijuana Growth in British Columbia,” Public Policy Sources, Fraser Institute Occasional Paper #74.

European Monitoring Centre for Drugs and Drug Addiction (2002), Annual Report 2002, available at (

Gettman, Jon B. and Stephen S. Fuller (2003), “Estimation of the Budgetary Costs of Marijuana Possession Arrests in the Commonwealth of Virginia,” Center for Regional Analysis, George Mason University.

Harrison, Lana D., Michael Backenheimer, and James A. Inciardi (1995), “Cannabis use in the United States: Implications for Policy,” in Peter Cohen and Arjan Sas, eds., Cannabisbeleid in Duitsland, Frankrijk en do Verenigde Staten, Amerstdamn: Centrum voor Drugsonderzoek, Universiteit van Amsterdamn, 231-236.

Lewis, Minchin (2004), Report on the Syracuse Police Department Activity for the Year Ended June 30, 2002, Department of Audit, City of Syracuse.

MacCoun, Robert and Peter Reuter (1997), “Interpreting Dutch Cannabis Policy: Reasoning by Analogy in the Legalization Debate,” Science, 278, 47-52.

Miron, Jeffrey A. (2002), “The Effect of Marijuana Decriminalization on the Budgets of Massachusetts Governments, With a Discussion of Decriminalization’s Effect on Marijuana Use,” Report to the Drug Policy Forum of Massachusetts, October.

Miron, Jeffrey A. (2003a), “Do Prohibitions Raise Prices? Evidence from the Markets for Cocaine and Heroin,” Review of Economics and Statistics, 85(3), 522-530.

Miron, Jeffrey A. (2003b), “A Critique of Estimates of the Economic Costs of Drug Abuse,” Report to the Drug Policy Alliance, July.

Miron, Jeffrey A. (2003c), “The Budgetary Implications of Marijuana Legalization in Massachusetts,” Report to Change the Climate, August.

Murphy, Patrick, Lynn E. Davis, Timothy Liston, David Thaler, and Kathi Webb (2000), Improving Anti-Drug Budgeting: Santa Monica, CA: Rand.

Nisbet, Charles T. and Firouz Vakil (1972), “Some Estimates of Price and Expenditure Elasticites of Demand for Marijuana Among U.C.L.A. Students,” Review of Economics and Statistics, 54, 473-475.

Office of National Drug Control Policy (1993), State and Local Spending on Drug Control Activities, Washington, D.C.: ONDCP

Office of National Drug Control Policy (2001a), What America’s Users Spend on Illegal Drugs, Cambridge, MA: Abt Associates.

Office of National Drug Control Policy (2001b), The Price of Illicit Drugs: 1981 through Second Quarter of 2000, Washington, D.C: Abt Associates.

Office of National Drug Control Policy (2002), National Drug Control Strategy, Washington, D.C.: ONDCP.

Pacula, Rosalie Liccardo, Michael Grossman, Frank J. Chaloupka, Patrick M. O’Malley, Lloyd D. Johnston, and Matthew C. Farrelly (2000), “Marijuana and Youth,” NBER WP #7703.

Reuter, Peter, Paul Hirschfield, and Curt Davies (2001), “Assessing the Crack-Down on Marijuana in Maryland,” manuscript, University of Maryland.

Schwer, R. Keith, Mary Riddel, and Jason Henderson (2002), “Fiscal Impact of Question 9: Potential State-Revenue Implications,” Center for Business and Economic Research, University of Nevada, Las Vegas.

US Department of Health and Humans Services (2000), Reducing Tobacco Use: A Report of the Surgeon General, Tobacco Taxation Fact Sheet. Accessed at

U.S. Department of Health and Human Services (2004), Treatment Episode Data Set (TEDS) Highlights – 2002, Washington, D.C.: Substance Abuse and Mental Health Services Administration, Office of Applied Statistics.

Wright, D. (2002), State Estimates of Substance Use from the 2000 National Household Survey on Drug Abuse: Volume I, Findings (DHHS Publication No. SMA 02-3731, NHSDA Series H-15), Rockville, MD: Substance Abuse and Mental Health Services Administration, Office of Applied Statistics.

Table 1: Percentage of Arrests Due to Marijuana Prohibition
Total Arrests MJ Possession MJ Sale/Man. Poss % S/M % Poss % /2
1 2 3 4 5 6
Alabama 215587 11501 258 0.053 0.001 0.027
Alaska 40181 1239 200 0.031 0.005 0.015
Arizona 304142 16288 1233 0.054 0.004 0.027
Arkansas 218521 6846 928 0.031 0.004 0.016
California 1428248 50149 12338 0.035 0.009 0.018
Colorado 282787 12067 604 0.043 0.002 0.021
Connecticut 146992 6751 773 0.046 0.005 0.023
Delaware 41515 2151 131 0.052 0.003 0.026
D.C.* 4009 32 0 0.008 0.000 0.004
Florida* 0 0 0 0.043 .006 0.022
Georgia 429674 24321 4093 0.057 0.010 0.028
Hawaii 64463 1110 167 0.017 0.003 0.009
Idaho 76032 2949 219 0.039 0.003 0.019
Illinois* 319920 0 0 0.043 0.006 0.000
Indiana 270022 14484 1806 0.054 0.007 0.027
Iowa 113394 6054 551 0.053 0.005 0.027
Kansas 78285 3277 594 0.042 0.008 0.021
Kentucky* 160899 10669 1188 0.066 0.007 0.033
Louisiana 297098 14941 2526 0.050 0.009 0.025
Maine 57203 3294 554 0.058 0.010 0.029
Maryland 318056 17113 2711 0.054 0.009 0.027
Massachusetts 160342 8975 1365 0.056 0.009 0.028
Michigan 413174 14629 2050 0.035 0.005 0.018
Minnesota 269010 9325 6782 0.035 0.025 0.017
Mississippi 202007 9925 1054 0.049 0.005 0.025
Missouri 322775 13202 1338 0.041 0.004 0.020
Montana 30396 384 35 0.013 0.001 0.006
Nebraska 97324 6787 326 0.070 0.003 0.035
Nevada 148656 3828 933 0.026 0.006 0.013
New Hampshire 50830 3706 550 0.073 0.011 0.036
New Jersey 375049 20285 3058 0.054 0.008 0.027
New Mexico 112829 2966 325 0.026 0.003 0.013
New York 1295374 101739 11309 0.079 0.009 0.039
North Carolina 523920 21179 2539 0.040 0.005 0.020
North Dakota 27846 896 137 0.032 0.005 0.016
Ohio 533364 25420 1863 0.048 0.003 0.024
Oklahoma 166004 11198 1302 0.067 0.008 0.034
Oregon 157748 6336 283 0.040 0.002 0.020
Pennsylvania 493339 16471 5057 0.033 0.010 0.017
Rhode Island 35733 2200 293 0.062 0.008 0.031
South Carolina 216451 14348 2370 0.066 0.011 0.033
South Dakota 41615 2449 153 0.059 0.004 0.029
Tennessee 232486 12869 2586 0.055 0.011 0.028
Texas 1074909 55509 1926 0.052 0.002 0.026
Utah 125553 4192 311 0.033 0.002 0.017
Vermont 17565 632 65 0.036 0.004 0.018
Virginia 303203 13140 1443 0.043 0.005 0.022
Washington 298474 13146 1329 0.044 0.004 0.022
West Virginia 51452 2618 248 0.051 0.005 0.025
Wisconsin 322877 45 16 0.000 0.000 0.000
Wyoming 34243 1633 164 0.048 0.005 0.024

* Quoting : “(3) No arrest data were provided for Washington, DC, and Florida. Limited arrest data were available for Illinois and Kentucky.”

Source: FBI Uniform Crime Reports accessed at

Table 2: Expenditures Attributable to Marijuana Prohibition ($ in millions)
Police Budget Judicial Budget Corrections Budget Total
State Total: MJ Prohib: Total MJ Prohib: Total MJ Prohib. Total MJ Prohib.
Alabama 656 18.28 262 28.56 404 4.04 1,322 51
Alaska 177 3.61 130 14.17 175 1.75 482 20
Arizona 1096 33.79 611 66.60 955 9.55 2,662 110
Arkansas 351 6.99 156 17.00 328 3.28 835 27
California 8703 227.97 6255 681.80 7170 71.70 22,128 981
Colorado 830 19.48 329 35.86 820 8.20 1,979 64
Connecticut 682 19.25 430 46.87 554 5.54 1,666 72
Delaware 166 4.82 90 9.81 228 2.28 484 17
Florida 3738 103.19 1396 152.16 3272 32.72 8,406 288
Georgia 1279 48.38 525 57.23 1375 13.75 3,179 119
Hawaii 222 2.49 180 19.62 153 1.53 555 24
Idaho 207 4.61 102 11.12 191 1.91 500 18
Illinois 3053 84.28 961 104.75 1763 17.63 5,777 207
Indiana 843 28.25 325 35.43 727 7.27 1,895 71
Iowa 426 13.44 253 27.58 298 2.98 977 44
Kansas 430 12.26 206 22.45 349 3.49 985 38
Kentucky 488 19.78 290 31.61 610 6.10 1,388 57
Louisiana 829 27.89 359 39.13 780 7.80 1,968 75
Maine 164 6.31 69 7.52 123 1.23 356 15
Maryland 1120 39.68 489 53.30 1104 11.04 2,713 104
Massachusetts 1479 53.98 628 68.45 795 7.95 2,902 130
Michigan 1792 40.62 905 98.65 1853 18.53 4,550 158
Minnesotta 874 37.18 442 48.18 591 5.91 1,907 91
Mississippi 404 12.03 154 16.79 292 2.92 850 32
Missouri 886 21.79 359 39.13 627 6.27 1,872 67
Montana 136 1.02 66 7.19 125 1.25 327 9
Nebraska 235 8.98 96 10.46 231 2.31 562 22
Nevada 539 10.32 248 27.03 471 4.71 1,258 42
New Hampshire 187 8.84 92 10.03 115 1.15 394 20
New Jersey 2231 78.52 948 103.33 1480 14.80 4,659 197
New Mexico 382 6.12 167 18.20 315 3.15 864 27.47
New York 5717 274.42 2262 246.56 4392 43.92 12,371 564.90
North Carolina 1318 33.03 470 51.23 1159 11.59 2,947 95.85
North Dakota 68 1.43 55 6.00 40 0.40 163 7.82
Ohio 2124 58.03 1158 126.22 1937 19.37 5,219 203.63
Oklahoma 518 21.53 193 21.04 511 5.11 1,222 47.68
Oregon 696 15.23 356 38.80 747 7.47 1,799 61.50
Pennsylvania 2220 59.82 1067 116.30 2221 22.21 5,508 198.33
Rhode Island 211 8.23 105 11.45 139 1.39 455 21.06
South Carolina 653 28.79 179 19.51 559 5.59 1,391 53.89
South Dakota 88 2.91 40 4.36 81 0.81 209 8.08
Tennessee 940 36.47 399 43.49 604 6.04 1,943 86.00
Texas 3204 88.47 1355 147.70 3755 37.55 8,314 273.71
Utah 381 7.30 202 22.02 351 3.51 934 32.83
Vermont 78 1.69 39 4.25 66 0.66 183 6.60
Virginia 1176 31.08 513 55.92 1246 12.46 2,935 99.46
Washington 1007 26.66 470 51.23 1053 10.53 2,530 88.42
West Virginia 171 5.17 108 11.77 184 1.84 463 18.79
Wisconsin 1124 0.13 440 47.96 1030 10.30 2,594 58.39
Wyoming 99 2.83 50 5.45 98 0.98 247 9.26
56,398 1,707.41 26,984 2941.26 48447 484.47 131,829 5,133
Arrest Data: Judicial Percent: Pastore and Maguire (2003), Table 5.42, p.444
Budget Data: Incarceration Percent: Pastore and Maguire (2003), Table 6.30, p.499

Table 3: Federal Expenditure on Marijuana Prohibition, 2002

1. Prohibition Enforcement, All Drugs $13.6 billion
2. Marijuana Use Rate, Past Year, 2002 11.0%
3. Any Illicit Drug Use Rate, Past Year, 2002 14.9%
4. Ratio 74%
5. Ratio × Line 1 $10.0 billion
6. Percent of All Drug Arrests for MJ, 2001 46.0%
7. Line 6 × Line 1 $6.3 billion
8. Percent of All Trafficking Arrests for MJ, 2001 26%
9. Line 8 × Line 1 $3.6 billion
10. Percent of DEA Drug Arrests for MJ, 2002 18.6%
11. Line 10 × Line 1 $2.5 billion
12. Percent of DEA Drug Convictions for MJ, 2002 19.9%
13. Line 12 × Line 1 $2.7 billion


Line 1: Miron (2003b, p.10).

Lines 2-3: SAMHSA, Office of Applied Statistics, National Survey on Drug Use and Health, 2002,

Lines 6 and 8: Sourcebook of Criminal Justice Statistics Online,

Line 10: Sourcebook of Criminal Justice Statistics Online,

Line 12: Sourcebook of Criminal Justice Statistics Online,

Table 4a: State Marijuana Tax Revenue – Population Method
Population Proportion Tax Revenue
































Dist. Columbia




















































































New Hampshire




New Jersey




New Mexico




New York




North Carolina




North Dakota




















Rhode Island




South Carolina




South Dakota




























West Virginia












State Populations:

Table 4b: State Marijuana Tax Revenue – Consumption Method
Use Rate†

User Population

Use Proportion

Tax Revenue









































Dist. Columbia









































































































New Hampshire





New Jersey





New Mexico





New York





North Carolina





North Dakota

























Rhode Island





South Carolina





South Dakota



































West Virginia















†Marijuana Use Rates:

Appendix A: Percentage of Corrections Population Incarcerated on Marijuana Charges

State-by-state data on the fraction of prisoners incarcerated on marijuana charges are not available, but data for a few states provide reasonable estimates of this fraction. This appendix displays the available information.

Appendix Table A1

State Year

% Incarcerated for MJ Violation


Pop %

Weighted Share

California 2003





Georgia 2000





Massachusetts 2000





Michigan 2001





New Hampshire 2002










Weighted Average



New Hampshire:




Massachusetts: Miron (2002, pp.4-5).


Appendix B: Revenue Under Prohibition from Seizures and Fines

State-by-state data on fines and seizures are not available. There is sufficient information, however, to estimate an upper bound on the revenue from fines and seizures. There are also data on federal fines and seizures.


The two main sources of federal seizure revenue are the Drug Enforcement Administration (DEA) and the U.S. Customs Service. In 2002, the DEA made seizures totaling $438 million.[32] In 2001, the U.S. Customs Service seized property valued at $592 million.[33] These figures overstate revenue since some defendants recovered their seized property. The Customs seizures overstate revenue related to drugs because the figure includes seizures for all reasons, such as violation of gun laws, intellectual property laws, and the like. There may also be double-counting between the DEA seizures and the U.S. Customs seizures.

Summing together the two components yields $1,030 million (= $438+$592 million) as the seizure revenue that results from enforcement of drug laws. This figure must be adjusted downward, however, to separate out the portion due to violation of marijuana laws as opposed to other drug laws. As shown in Table 3, approximately 20% of the federal drug enforcement budget is attributable to marijuana, so it is reasonable to assume approximately 20% of the fines and seizures correspond to enforcement of marijuana laws.

Thus, seizure revenue at the federal level due to marijuana prosecutions is roughly $206.0 million annually.

State and local data on forfeiture revenue are not readily available for all states Baicker and Jacobson (2004), however, estimate using a sample of states that state forfeiture revenue per capita was roughly $1.14 during the 1994-2001 period. This implies aggregate state forfeiture revenue of $342 million. Deflating by 26%, the fraction of all drug trafficking arrests due to marijuana, implies that marijuana seizures yield $89 million to state governments.

Fines: In 2001, the total quantity of fines and restitutions ordered for drug offense cases in U.S. District Courts was just under $41 million.[34] Adjusting this by the 20% figure implies $8.2 million from marijuana cases. Assuming the ratio of state/local to federal fine revenue is similar to ratio of state/local to federal seizure revenue implies that state and local fines/restitution from marijuana cases is about $3.5 million.

Related Links

Interview with Milton Friedman on the Drug War, 1991

PollingReport – Illegal Drugs

Esquire:  He’s Not High: Inside Barney Frank’s Plan to Legalize Marijuana July 14, 2009

LA Times:  A pot tax? July 14, 2009

Mother Jones: The Patriot’s Guide to Legalization July/August 2009

HotAir:  Arnold: Time to discuss marijuana legalization, even though I oppose it

UN Office On Drugs & Crime:  World Drug Report – 2009 (view pdf/download @ docstoc)

September 16, 2007
“Blunt proposition for California’s healthcare mess”
LA Times

November 30, 2006
“Petition Drive Could Lead to Legalization of Marijuana”
The Michigan Daily

November 27, 2006
“He Rests, His Legacy Can’t Conservatives Should Do Milton Friedman’s Unfinished Business”
National Review

November 26, 2006
“Friedman was right: we should legalize drugs”
The Star Tribune

November 25, 2006
“LTE: Budding possibilities”
Dallas Morning News

September 12, 2005
“Smoked Out”

September 10, 2005
“Marijuana Policy Isn’t Working”
St. Petersburg Times

September 9, 2005
“Does Minnesota Need a Marijuana Sales Tax?”
The Minnesota Daily

September 4, 2005
“Legalise Mild Drugs?”
The Times of India

August 8, 2005
“Treat Pot Like Booze And Save $$$, Economists Say”
Out In The Mountains

July 24, 2005
“Legalize Pot and Tax It? No Way, Say Lawmakers”
The Register-Herald

July 21, 2005
“The Price of Prohibition”
Boulder Weekly

July 20, 2005
“Time For A Marijuana Sales Tax” (end)
San Francisco Examiner

June 26, 2005
“The High Cost of Prohibition”
Pittsburgh Tribune-Review

June 16, 2005
“High and Mighty”
Los Angeles City Beat

June 14, 2005
“Getting Tough with the Terminally Ill”
The Times-Republican

June 8, 2005
“Fallout of Marijuana Verdict”
The Christian Science Monitor

June 7, 2005
“High Court’s Pot Mistake; Lost in Supreme Shuffle: $14 Billion in Benefits We’re Missing by Not Legalizing and Taxing Pot”

June 7, 2005
“Reefer Madness: Is Sanity Breaking Out?”

June 6, 2005
“Retail Industry Should Support Legalization of Marijuana, According to RetailWire Poll”
Press Release Newswire

June 5, 2005
“Targeting Marijuana Saps Anti-Drug Effort, Critics Say”
Chicago Tribune

June 3, 2005
“Economists Call for Marijuana Reform “
The New Standard

June 3, 2005
“Further Evidence That Marijuana Prohibition is a Bad Idea”

June 3, 2005
“Colorado Pot Push Bypasses Aspen for Telluride”
Aspen Times

June 3, 2005
Marijuana Lobby Points to Economic Impact”
Denver Business Journal

June 2, 2005
“Milton Friedman: Legalize It!”

June 2, 2005
“The High Cost of Prohibition”




I have thought about this subject matter for some time now and have resisted posting on the birth certificate issue.  I don’t want to be called a “truther” or “birther” however I think it is time this issue was finally put to rest.  Why can’t the President simply provide a copy of the real birth certificate?  I don’t know what to believe?

This country is divided politically down the middle and this issue is now front and center and I don’t envy our military leaders explaining this to their troops as they go into battle each day against those who would cause harm to our country and its citizens.

Mr. President, as Commander in Chief, it is your responsibility to put the facts on the table and let the American people decide.  This is all that I ask…


Federal judge dismisses reservist’s suit questioning Obama’s presidency


A federal judge this morning dismissed the suit filed here by a U.S. Army reservist who says he shouldn’t have to go to Afghanistan because he believes Barack Obama was never eligible to be president.

Judge Clay Land sided with the defense, which claimed in its response to Maj. Stefan Frederick Cook’s suit, filed July 8 with the U.S. District Court for the Middle District of Georgia, that Cook’s suit is “moot” in that he already has been told he doesn’t have to go to Afghanistan, so the relief he is seeking has been granted.

“Federal court only has authority of actual cases and controversies,” Land said. “The entire action is dismissed for lack of subject matter jurisdiction.”

Cook arrived at the federal courthouse in uniform this morning for his hearing. Outside the courthouse, before the hearing, Cook defended his controversial position and declared his devotion to the military.

“I love the Army and I want to continue to serve in the Army,” Cook said. “If we can establish that he is in fact president of the United States legally, I’m on the airplane the next day over to Afghanistan… if they cut my deployment orders, so I can do the job that I want to do.”

Cook said following orders made by an illegitimate superior could ultimately lead to his prosecution, or worse.

“If one cannot establish the validity and legality of the order … we would be following illegal orders and subject to prosecution,” he said. “I could be prosecuted by the Uniform Code of Military Justice and if captured I would not be privy to protections under the Geneva Convention.”

Other soldiers have been supportive of his position, Cook said. “I’ve received quite a bit of popular support from officers in my grade and some officers a grade above and some officers a grade below,” he said. “Thus far, I’d say about 90 percent positive.”…

Note:  The Ledger-Enquirer also reports that “A controversial suit brought by a U.S. Army reservist has been joined by a retired Army two-star general and an active reserve Air Force lieutenant colonel.”

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From Wikipedia:

The United States Constitution requires that Presidents (and Vice Presidents) of the United States be natural born citizens of the United States.

Constitutional provisions

The special term “Natural Born Citizen” is used in particular as a requirement for eligibility to serve as President or Vice President of the United States. Section 1 of Article Two of the United States Constitution contains the clause:

No Person except a natural born Citizen, or a Citizen of the United States, at the time of the Adoption of this Constitution, shall be eligible to the Office of President; neither shall any Person be eligible to that Office who shall not have attained to the Age of thirty five Years, and been fourteen Years a Resident within the United States.

Additionally, the Twelfth Amendment to the United States Constitution states that: “[N]o person constitutionally ineligible to the office of President shall be eligible to that of Vice-President of the United States.” The grandfather provision of the Natural Born Citizen Clause thus covered the only exceptions to the natural born requirement for the first several presidents and vice-presidents, who were citizens at the time of the adoption of the Constitution, but had been born as British subjects before the American Revolution.

Although only dealing with the concept of citizenship and not necessarily natural born citizenship, the Citizenship Clause of the Fourteenth Amendment to the United States Constitution provides an additional source of constitutional doctrine stating that birth “in the United States” and subjection to U.S. jurisdiction at the time of birth, entitles one to citizenship:

All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside.

Definitions & Sources

One possible source of the natural born citizen clause can be traced to a letter of July 25, 1787, from John Jay (who was born in New York) to George Washington (who was born in Virginia), presiding officer of the Constitutional Convention. John Jay wrote: “Permit me to hint, whether it would be wise and seasonable to provide a strong check to the admission of Foreigners into the administration of our national Government; and to declare expressly that the Commander in Chief of the American army shall not be given to nor devolve on, any but a natural born Citizen.” (Underlining in the original)[1] There was no debate, and this qualification for the office of the Presidency was introduced by the drafting Committee of Eleven, and then adopted without discussion by the Constitutional Convention.

The term “natural born Citizen” has never been defined by the Courts in the course of a Presidential qualification challenge. It is believed by some people, including some of the so-called “birthers,” that this provision means that only persons born on U.S. soil to two U.S. citizens are “natural born Citizens” of the nation and eligible to become President.

There are others who believe that anyone who acquires citizenship by any means other than naturalization is a “natural born Citizen” and eligible for the Presidency. In between these extremes lie gray areas, some controversy,[2] and various obiter dicta from the courts.[3][4][5] A majority of commentators today argue that the Presidential Eligibility clause incorporates both common-law (jus soli) and English statutory (jus sanguinis) principles.[6]


  1. Heard, Alexander and Nelson, Michael. Presidential Selection, page 123 (Duke University Press 1987) via Google Books.
  2. How can Panamanian-born McCain be elected president?, 2008-02-25, retrieved 2008-12-05.
  3. Minor v Happersett (1874) case law at
  4. a b c U.S. v Wong Kim Ark (1898) case law at
  5. Perkins v Elg (1939) case law at
  6. Meese, Edwin; Edwin Meese, III, David F. Forte, Matthew Spalding, (2008). The Heritage Guide to the Constitution. Washington, D.C.: Regnery Publishing. p. 190. ISBN 159698001X. Solum, Lawrence B. (2008-09-05). “Originalism and the Natural Born Citizen Clause“. Michigan Law Review (Michigan: University of Illinois) 107: 22. ISBN 159698001X.




BORN IN THE USA? Bombshell: Orders revoked for soldier challenging prez


Press Secretary Robert Gibbs remarks begin at the 55:27 mark of the press briefing. (Click photo to view)

Major victory for Army warrior questioning Obama’s birthplace

The mystery letter

… Obama has maintained he was born in Hawaii, and at least one hospital, Honolulu’s Kapi’olani Medical Center for Women and Children, claims it received a letter from the president declaring his birth there.

As WND reported, White House Press Secretary Robert Gibbs refused to confirm that the letter which was used by the hospital to solicit donations is, in fact, a real correspondence.

When WND exposed doubts about the authenticity of the letter because it was created with HTML computer code and had no presidential or White House seal, the hospital which for nearly six months proudly declared Obama was born at its facility commenced an active cover-up, hiding that White House letter from its original webpage and refusing to confirm such a letter actually exists.

WND also reported that just within the last week, at least two reports have cited Obama’s birth in Kenya. Wikipedia also was found to have been reporting on Obama’s birth in Kenya, before a series of scrubs placed his birth in Honolulu.

And that came on the heels of several online information sites changing the president’s supposed birthplace from one hospital in Hawaii to another, after WND broke the news of the letter said to be from the White House.

obamahospitalletterWND: Barack Obama states in this purported letter from him on what appears to be White House stationery that he was born at the Kapi’olani Medical Center for Women and Children in Honolulu. The letter was posted by the medical center for nearly six months on its website and used for fundraising before electronically hidden once WND disclosed it was not an actual paper letter, but merely HTML coding. The hospital and White House now refuse to confirm that a real document even exists.



July 15th, 2009

4:09-cv-00082-CDL Cook v. Good et al

Top of Form

U.S. District Court [LIVE AREA]

Georgia Middle District

Notice of Electronic Filing

The following transaction was entered by Taitz, Orly on 7/15/2009 at 1:41 PM EDT and filed on 7/15/2009

Case Name: Cook v. Good et al
Case Number: 4:09-cv-82
Filer: Stefan Frederick Cook
Document Number: 6

Docket Text:
MOTION for Preliminary Injunction by Stefan Frederick Cook filed by Orly Taitz.(Taitz, Orly)
4:09-cv-82 Notice has been electronically mailed to:

Hugh Randolph Aderhold , Jr,,,,,,,, Orly Taitz

4:09-cv-82 On this date, a copy of this document, including any attachments filed with this document, has been mailed by United States Postal Service to any non CM/ECF participants in this case as indicated below::

The following document(s) are associated with this transaction:

Document description:

Main Document
Original filename:n/a
Electronic document Stamp:
[STAMP dcecfStamp_ID=1071512857 [Date=7/15/2009]

FileNumber=1060580-0] [5d018320d9bbd6949bf70ee59e946b1a65ddf09fbfd46282705b1db98b8bfab9cab

Bottom of Form

Application for injunction

Orly Taitz, Esq

Attorney & Counselor at Law

26302 La Paz, Suite 211

Mission Viejo Ca 92691

ph. 949-683-5411

fax 949-586-2082

California Bar ID No. 223433

(Application for Admission Pro Hac Vice

U.S.D.C. Middle District of Georgia

Submitted July 10, 2009)





LT. COL. DAVID EARL GRAEF,                §


Plaintiffs,                                           §


v.                                                                     §


COLONEL LOUIS B. WINGATE,              §          Civil Action:

COLONEL WANDA L. GOOD,                  §          4:09-cv-00082-CDL



STATES SECRETARY OF DEFENSE,       §          Rule 65 Application for

BARACK HUSSEIN OBAMA, de facto §          Preliminary Injunction


Defendants.                                      §


Plaintiff Major Stefan Frederick Cook previously received from the Defendants in this cause what appear to be facially valid orders from Colonel Wanda L. Good mobilizing him to active duty with the United States Army in Afghanistan on July 15-18, 2009 (Exhibit A).  Plaintiff filed his Original Application for TRO on Friday July 10, 2009, and on Tuesday, July 14, 2009 his deployment to Afghanistan was revoked by order of Colonel Louis B. Wingate, apparently Col. Good’s successor at Army Human Resources Command in St. Louis (Exhibit B).

This unexpected action does not in any way, shape or form, “moot” the application for TRO, which is here amended and resubmitted as an Application for Preliminary Injunction, covering both the possibility of future orders and to prevent negative collateral consequences such as retaliation against Major Stefan Frederick Cook (which have already begun) including possible violations of the general Federal and specific military whistleblower acts, as well as the First and Ninth Amendment civil rights of Major Stefan Frederick Cook to challenge the chain of command in the U.S military.  It is obvious that this case has the potential to be converted into a class action on behalf of all military servicemen and women who require the means of establishing the legality of their orders with certainty.

This Court has the authority to hear cases which might otherwise be moot so long as they present: 1) an unsettled legal issues of public interest and importance and 2) an issue of a recurring nature that will escape review unless the Court exercises its discretionary jurisdiction.  Major General Carol Dean Childers  retired but subject to lifetime recall, and Lt. Col David Earl Graeff – Medical Surgeon in US Airforce Active Reserves, subject to recall any day, join in this Application for Preliminary Injunction because it is a matter of unparalleled public interest and importance and because it is clearly a matter arising from issues of a recurring nature that will escape review unless the Court exercises its discretionary jurisdiction.


Moreover, however, retaliation has occurred or begun against Plaintiff Stefan Frederick Cook for the exercise of his First Amendment right to petition for redress of grievances and Plaintiff Cook accordingly here seeks an injunction against the continuance or full implementation of this official governmental retaliation or in the alternative for a writ of mandamus, order to show cause, or rule nisi be issued to the Department of Defense commanding it to cease, cure, or remedy all retaliation against Plaintiff Cook.  The circumstances are as follows:

Late on Tuesday afternoon, July 14, 2009, at around about 4:30 pm, Plaintiff Stefan Frederick Cook returned a call to an unknown telephone call from (813) 828-5884 and was told that his services were no longer required in Afghanistan and that he need not report for duty.  In addition Plaintiff an e-mail with the revocation order attached from Master Sargent Miguel Matos (Exhibit C).  Upon receipt of the revocation, Plaintiff Major Cook called his civilian boss, the CEO of Simtech, Inc., a closely held corporation that does DOD contracting in the general field of information technology/systems integration, at which Plaintiff Major was employed until taking a Military Leave of Absence on Friday July 10, 2009, a senior systems engineer and architect, in preparation for his deployment to Afghanistan.  (Plaintiff has five Cisco Systems certifications in information technology dating from 2000 and just recertified in June 2009 for the Cisco Certified Design Expert qualification exam.)

The CEO of Simtech, Inc., Larry Grice, explained to Plaintiff over a series of four conversations within the next two hours, that he had been terminated.  Grice told the Plaintiff that he would no longer be welcome in his former position at SOCOM but that Grice wanted to see whether he could find something within the company (Simtech, Inc.) for Cook.  The upshot was that at this time Grice did not have anything for Plaintiff to do.  Grice told Plaintiff, in essence, that the situation had become “nutty and crazy”, and that Plaintiff would no longer be able to work at his old position.

Grice explained that he had been in touch with Defense Security Services (an agency of the Department of Defense[1], with regional offices located in SOCOM Headquarters at McDill Airforce Base in Tampa, Florida), and that DSS had not yet made a determination whether Plaintiff Major Cook’s clearances would be pulled, but Grice made clear to Cook that it was DSS who had compelled Cook’s termination.  Essentially, because of the “nutty and crazy” situation and the communications received from DSS was no longer employable by him at all.  So he was not optimistic about getting me another job at the company.  Grice also reported to Plaintiff that there was some gossip that “people were disappointed in” the Plaintiff because they thought he was manipulating his deployment orders to create a platform for political purposes.  Grice then discussed Plaintiff’s expectation of receiving final paychecks (including accrued leave pay) already owed, without any severance pay, and wished the Plaintiff well.

A federal agency (such as the Department of Defense, acting through the Defense Security Services Agency) clearly violates the Whistleblower Protection Act if it takes or fails to take (or threatens to take or fail to take) a personnel action with respect to any employee or applicant because of any disclosure of information by the employee or applicant that he or she reasonably believes evidences a violation of a law, rule or regulation; gross mismanagement; gross waste of funds; an abuse of authority; or a substantial and specific danger to public health or safety.  What has happened in the present case of Stefan Frederick Cook is that a federal agency appears to have taken action against Stefan Frederick Cook’s private employer, Simtech, Inc., which is a closely held corporation owned and operated by members of a single family, who are as much victims of the Department of Defense’ heavy-handed interference with Plaintiff Cook’s private-sector employment as is Plaintiff Cook himself.


This Plaintiff, at the time of his original induction into service, took the United States, military oath of an enlisted man, which reads:

“I, Stefan Frederick Cook, do solemnly swear (or affirm) that I will support and defend the Constitution of the United States against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same; and that I will obey the orders of the President of the United States and the orders of the officers appointed over me, according to the regulations and the Uniform Code of Military Justice. So help me God”

Later, however, he took the oath of an officer of the United States Armed Forces, as follows:

“I, Stefan Frederick Cook, having been appointed an officer in the Army of the United States, as indicated above in the grade of Major do solemnly swear (or affirm) that I will support and defend the Constitution of the United States against all enemies, foreign or domestic, that I will bear true faith and allegiance to the same; that I take this obligation freely, without any mental reservations or purpose of evasion; and that I will well and faithfully discharge the duties of the office upon which I am about to enter; So help me God.” (DA Form 71, 1 August 1959, for officers.)

This oath is based on 5 U.S.C. §3331:

An individual, except the President, elected or appointed to an office of honor or profit in the civil service or uniformed services, shall take the following oath: “I, AB, do solemnly swear (or affirm) that I will support and defend the Constitution of the United States against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same; that I take this obligation freely, without any mental reservation or purpose of evasion; and that I will well and faithfully discharge the duties of the office on which I am about to enter. So help me God.” This section does not affect other oaths required by law.  See also:

An officer does not swear to obey the orders of the President.  Rather, he assumes the obligation to defend the Constitution against all enemies, foreign and domestic (for example, a possible Presidential Usurper, if it were shown by clear-and-convincing evidence that a person took the office under false pretenses of constitutional qualifications).   The Founding Fathers had the foresight to protect and secure against a situation such as that now facing the United States.  The officer oath is a safeguard to protect the Constitution against a corrupt elected government.  Officers have an obligation to defend the Constitution. The officer oath does not even mention following the UCMJ laws as does the enlisted oath.  Furthermore, Plaintiff Stefan Frederick Cook carries with him a card entitled “Army Values” issued by the United States Army (Exhibit D), which commands in part as follows:

“Bear truth faith and allegiance to the United States Constitution, the Army, your unit, and other soldiers.”

“Put the welfare of the Nation, the army, and your subordinates before your own.”

“Do what’s right, legally and morally.”

“Face fear, danger, or adversity (physical or moral).”

Title 10, Subtitle A, Part II of the United States Code contains the Uniform Code of Military Justice (UCMJ).  10 U.S.C. §890 (ART.90), makes it an offence subject to court-martial if any military personnel “willfully disobeys a lawful command of his superior commissioned officer,” 10 U.S.C. §891 (ART.91) “lawful order of a warrant officer”, and most importantly, 10 U.S.C. §892 (ART.92) provides court-martial for any officer who

(1) violates or fails to obey any lawful general order or regulation;

(2) having knowledge of any other lawful order issued by a member of the armed forces, which it is his duty to obey, fails to obey the order; or

(3) is derelict in the performance of his duties;

In each case, Plaintiff submits that it is implicit though not expressly stated that an officer is and should be subject to court-martial, because he will be derelict in the performance of his duties, if he does not inquire as to the lawfulness, the legality, the legitimacy of the orders which he has received, whether those orders are specific or general.

Unfortunately the Uniform Code of Military Justice does not provide a means for ascertaining the legality of orders, and accordingly, this Plaintiff is left with no choice but recourse to the ordinary civil courts of the United States to seek a determination of what he considers to be a question of paramount constitutional and legal importance: the validity of the chain of command under a President whose election, eligibility, and constitutional status appear open to serious question.

Plaintiff Major Stefan Frederick Cook is not a pacifist.  He does not object to war or the use of military force in the implementation of national policy or the enforcement of international law.  Above all, Plaintiff is not a coward, he is not engaged in mutiny, sedition, insubordination, contempt, disrespect, or any kind of resistance to any general or specific lawful order of which he knows or has received notice.

Plaintiff Major Stefan Frederick Cook realized and accepted as a matter of political reality (although it is very hard for him to bear personally) that many might criticize or even shun him, saying that he is not acting in the best interests of his country for trying to uphold the plain letter of the Constitution.  Others may cynically ridicule this Plaintiff when, as an officer responsible not only to obey those above him but to protect those under his command, he comes to this Court asking for the right to establish the legality of orders received not only for his own protection, but for the protection of all enlisted men and women who depend on HIS judgment that the orders he follows are legal.

Above all, when Plaintiff Major Stefan Frederick Cook submitted and contended, as he continues to submit and contend, that he filed and will prosecute this lawsuit and seeks a preliminary injunction against the Defendants’ enforcement of potentially illegal orders for the benefit of all servicemen and women and for the benefit all officers in all branches of the U.S. Military, he knew that those in power illegitimately may seek to injure his career, although frankly, he had no idea how fast they would work, or that his civilian career would be ended within five days of exercising his First Amendment Right to Petition for Redress of Grievances.

He knew that he risked all and he did and continues to do so in the conscientious belief that he does so for not merely his own, but the general good.  It is also now true that the Department of Defense has taken retaliatory action against this Plaintiff through DSS, and that Plaintiff now has nothing more to lose, and must defend his civil rights, his constitutional duty (oath of office as an officer) and above all his honor and his good name against all those who would and have criticized him for making the decision to stand up and demand proof.

Quite simply, the Plaintiff cannot escape from the mandates of his conscience and his awareness, his educated consciousness, that all military personnel but especially commissioned officers have an obligation and a duty to only obey Lawful orders and indeed have an obligation to disobey Unlawful orders, including orders by the president that do not comply with the UCMJ. The moral and legal obligation is to the U.S. Constitution and not to those who would issue unlawful orders, especially if those orders are in direct violation of the Constitution and the UCMJ.

Professor Hitomi Takemura of Kyushu University has recently (December 5, 2008) published a book entitled: International Human Right to Conscientious Objection to Military Service and Individual Duties to Disobey Manifestly Illegal Orders (New York: Springer-Verlag).  This book stands as an international legal analysis of the duties of military officers, and it is significant, if not possibly somewhat ironic, that President Barack Hussein Obama has repeatedly argued that the United States should conform itself to international law and customs.

Plaintiff does not in this case seek a judicial determination of whether or not there is a general duty to disobey all unlawful orders, but rather to decide whether an officer, such as the Plaintiff, may seek judicial determination of the lawful or unlawful nature of an order based on a constitutional challenge to the chain of command originating from a probably ineligible President and Commander-in-Chief.

Plaintiff files this suit to clarify how he can both obey all lawful orders and avoid dereliction of his duties so as to escape court-martial under the UCMJ if he does NOT question the legality of the orders he has received.  Plaintiff seeks to avoid not only court-martial in this country, but also treatment as a war-criminal or terrorist, not eligible even for protection under the Geneva convention, if he were found to be a merely mercenary soldier in a private army of slaves, “owned” or controlled by an unconstitutional and therefore illegal commander, if he does not ask the question: “is this order legal?”


Plaintiff presents the key question in this case as one of first impression, never before decided in the history of the United States: Is an officer entitled to refuse orders on grounds of conscientious objection to the legitimate constitutional authority of the current de facto  Commander-in-Chief?  In the alternative, is an officer entitled to a judicial stay of the enforcement of facially valid military orders where that officer can show evidence that the chain-of-command from the commander-in-chief is tainted by illegal activity?  In the alternative, does the issuance of orders based on a constitutionally infirm chain-of-command under Article II create or render military service as a mere “involuntary servitude” in violation of the Thirteenth Amendment which may be judicially enjoined?

Plaintiff seeks injunctive relief against the United States Department of Defense, and each of Plaintiff’s commanding officers, as expressly authorized by 5 U.S.C. §702.   Specifically, Plaintiff alleges that he will suffer legally cognizable but irreparable injury because of agency (U.S. Department of Defense) action if the order attached as Exhibit A were to be enforced, and that Plaintiff is adversely affected and aggrieved by this agency action within the meaning of Article II, §§1-2 of the United States Constitution, and is entitled to judicial review thereof. This action is filed in this United States District Court for the Middle District of Georgia, which venue is appropriate in that deployment from Fort Benning, Georgia, has been ordered to take place on July 18, 2009 (see Exhibit A).

This suit is filed seeking purely injunctive and declaratory relief (and no money damages) and the Complaint to be filed within 10-15 days of the filing of this Application for Preliminary Injunction (circumstances have changed so wildly in the past few days that it is impossible to have a complaint ready by the time of the first scheduled hearing on July 16, 2009, to be held in Columbus, Georgia) states a claim that the Department of Defense and its officers, including the de facto President Barack Hussein Obama, as de facto Commander in Chief, together with Secretary of Defense Robert M. Gates, and Colonels Louis B. Wingate, Thomas D. MacDonald and Wanda L. Good as employees thereof, have acted illegally/i.e., without actual legal authority (valid chain of command) in issuing this order, or else failed to act in a de jure official capacity at all, or else have acted under color of legal authority by pretending that a lawful chain of command under the authority of a constitutionally qualified and elected President has been established pursuant to Article II, §§1-2 of the United States Constitution, when in fact, the current de facto Commander-in-Chief is not constitutionally qualified nor was he legally elected or appointed to succeed to the office of President of the United States.

Pursuant to 5 U.S.C. §702 this Application and Complaint yet to be filed may proceed and shall not be dismissed nor relief therein be denied on the ground that the Court may determine that this suit is filed against the United States or that the United States is an indispensable party[2].

Plaintiff submits that this court is required by federal common law to enter a Preliminary Injunction in this case and to enjoin Defendants’ persecution of and retaliation against Plaintiff Stefan Frederick Cook for questioning the legitimacy of the chain of command predicate to the validity of to the orders contained in Exhibits A, B, and C for the following reasons:

(1)            The United States Supreme Court has held that Federal rules are “necessary to protect uniquely federal interests”.  Texas Industries, Inc., v Radcliff Materials, Inc., 451 U.S. 630, 640 (1981), quoting Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398, 426 (1964).

(2)           Included in this category is the creation of federal common law to protect federal interests in international law, which are particularly relevant to the legitimacy of United States military presence and intervention in foreign countries, of which the Plaintiff herein will be an integral part and instrument if the orders set forth in Exhibit A are not enjoined from enforcement.  Id.

(3)           The issue or question raised by this suit is uniquely federal and properly (and in fact necessarily) subject to the exercise of federal power: the question whether the constitutional legitimacy of the chain of command under a constitutionally legitimate commander-in-chief pursuant to Article II, §§1-2 of the Constitution is essential to the maintenance of balance of powers and separation of powers under the constitution, and cannot be lightly dismissed in light of the Plaintiff’s evidence that the de facto President of the United States is not only constitutionally unqualified, but procured his election by fraudulent and illegitimate means which may constitute a pattern of racketeering utilizing the apparatus of corrupt organizations in violation of 18 U.S.C. §1961 et seq.

(4)           A substantive federal rule of law to govern this issue has never been developed, presumably because there has never been a serious challenge to the constitutional eligibility and legitimacy of any commander-in-chief of the United States Armed Forces prior to the apparent election of Barack Hussein Obama, but the novelty and uniqueness of this situation only underscores and does not diminish the critical nature of the inquiry to be made.  See, e.g., Martha A. Field “Sources of Law: the Scope of Federal Common Law”, 99 Harvard L. Rev. 881, 886 (1986) and David J. Barron & Martin S. Lederman “The Commander-in-Chief at the Lowest Ebb—Framing the Problem, Doctrine, and Original Understanding,” 121 Harvard L. Rev. 689, 712, 748 (2008).

(5)           It is probably not an overstatement to submit that there has never been a greater need to create federal law to safeguard federal interests than now, when the constitutional legitimacy of the President and by extension of all exercises of Presidential power are called into question.  There are no direct precedents in all of United States History, there are no state rules which could reasonably be applied.   To paraphrase the United States Supreme Court’s holding in Clearfield Trust Co. v. United States, “the rights and duties of the United States” in regard to the constitutional legitimacy and qualifications of its highest officers “are governed by federal rather than” any other law.  318 U.S. 363 at 366 (1943).

(6)           “The authority to” inaugurate the President and determine whether his orders are entered with legitimate authority or not have “its origins in the Constitutions and the Statutes of the United States and [is] in no way dependent upon the laws of” any particular state or foreign jurisdiction.  Id. at 366-7.

(7)            Few will dispute that the legitimacy of the President and of the Presidency itself is a matter of paramount concern (even exceeding that of the government issued commercial paper/checks at issue in Clearfield Trust) and importance to the several states and all foreign jurisdictions which may have to deal with the most powerful nation in the world.  As noted above, the legitimacy of the Chief Executive and Commander-in-Chief affects the relationships of the Federal Government particularly with those nations in which this nation takes and implements action and policy by and through its military forces on foreign soil.  See also Erwin Chemerinsky Federal Jurisdiction, 5th ed. (2007) 363.

(8)           Thus, federal interests of incomparable dimensions exist which justify this court’s creation of federal law and no challenged action instituted by the executive branch should be allowed to proceed until clear criteria have been established to guide this determination.  To hold otherwise would be to reduce the constitution to notions of realpolitik and a government of men asserting their power by force rather than laws.

(9)           Plaintiff submits that in the absence of a constitutionally valid and legitimate commander-in-chief, he cannot serve to impose the military might and power of this country in a foreign land as a matter of principle. Plaintiff asks that he therefore be granted status as a conscientious objector on moral, religious and philosophical grounds, not that Plaintiff is a pacifist or in any way opposed to the use of military force to further the legitimate interests of the United States, but on the grounds that he cannot abide the notion that he might possibly be implementing by force the policy of a government whose executive power and commander-in-chief may have assumed power unlawfully and might have established themselves on a foundation of fraud, lies, and deceit.

(10)        The evidence contained in Exhibit E shows that Barack Hussein Obama might have used as many as 149 addresses and 39 social security numbers prior to assuming the office of President.  The social security number most commonly used by Barack Hussein Obama, is one issued in the state of Connecticut, the state where Barack Hussein Obama never resided and it shows him to be 119 years old. This coupled with the fact that Mr. Obama’s grandmother, Madeline Dunham was a volunteer at the Oahu Circuit Court Probate Department and had access to the social security numbers of the deceased, constitutes circumstantial evidence casting serious doubt on the legitimacy of Mr. Obama and his claims of being born on US territory.  Exhibit F, the expert affidavit of renowned forensic document examiner Sandra Ramsey Lines, states that the certification of live birth posted by Mr. Obama as verification of his legitimacy, cannot be verified as genuine, and should be presumed fraudulent.

(11)         This doubt is further reinforced by the fact that the Hawaiian statute 338 allows foreign born children of Hawaiian residents to obtain Hawaiian birth certificates, that those birth certificates can be obtained based on a statement of one relative only without any corroborating evidence from the hospital; that “late birth certificates” (i.e. non-contemporaneously, post-facto, in two words “potentially fabricated”) can lawfully, under this statute, be obtained at any time later in life.

(12)        That is of paramount concern, as Barack Hussein Obama’s original birth certificate was never provided by the state of Hawaii, but only a statement that there is an original “long birth certificate” document on file.  The statement repeatedly provided by Hawaiian officials is quite simply incomplete, evasive, and without explanation of critical details: namely, whether it is a foreign birth certification or one obtained based on a statement of one relative only, or a late certification or amended one, obtained upon adoption by his stepfather.  See Exhibit C: the Certification of Live Birth posted by Mr. Obama on the Internet, cannot be treated as genuine without examining the original on file with the Health department of the State of Hawaii.

(13)        In addition or in the alternative, Plaintiff submits that, absent clearly established and indisputable proof of constitutional right to serve as commander-in-chief, the army becomes merely a corps of chattel slaves under the illegitimate control of a private citizen, in violation of the Thirteenth Amendment and that this Plaintiff is entitled to constitutionally complete and sufficient proof of his commander-in-chief’s eligibility and entitlement to serve in this capacity under Article I, §§1-2 prior to obeying orders from a man against whom mountains of evidence now exist (Exhibits E and F, and additional evidence which can be provided at the Preliminary Injunction hearing or in conjunction with the Complaint to be filed in this case) to show that Barack Hussein Obama obtained the office of President without legal qualifications, and further that he did so by and through a continuous pattern and program of fraud and deceit.

(14)        A long line of cases now exists to show that 42 U.S.C. §§1983, 1988 may be used to bring suit against Federal Officials for violations of constitutional rights, and 42 U.S.C. §1988(a) specifically authorizes courts to adapt or fashion common law remedies to prevent constitutional violations where no adequate remedy exists or is set forth in law—such specially fashioned remedies would include expressly empowering military officers to challenge orders based on constitutional defects in the chain of command by means of equitable judicial proceedings such as this one, and to permit injunctions against deployment where the chain of command is reasonably subject to question.

(15)        Critical among the cases applying §1983 to suits against Federal (indeed, Military) officers, is the 1982 case of Harlow v. Fitzgerald, 457 U.S. 731 (1982) and closely related successor Mitchell v. Forsyth, 472 U.S. 511 (1985). These cases held that U.S. Government officials (such as Defendants in this case) could only claim qualified immunity, and that even qualified immunity was available to them only if they followed well-established law and norms of construction or interpretation of law.

(16)        Plaintiff submits and here asks this Court to find, declare, and hold that the requirement that the President of the United States be a natural born citizen, set forth in Article II, §1 of the Constitution, creates a “clearly established … constitutional right of which a reasonable person would have known.”  Harlow v. Fitzgerald, 457 U.S. at 818.

(17)         The right in question which Plaintiff asks this Court to define and recognize as a matter of first impression should be defined either as the unilateral right to disobey or the right to seek a judicial injunction against the enforcement of orders given on the unproven de facto authority of a government headed by a man against whom such evidence of  high likelihood of fraud as the affidavit of Neal Sankey (attached as Exhibit E) can be assembled from public records alone.

(18)        In other words, Plaintiff asks this Court to rule, declare, and adjudge, pursuant to 42 U.S.C. §1988(a), that an officer of the Army of the United States (all officers)!) must have the right to question apparently illegitimate authority in the courts or else in the course of his employment as an officer directly within the army chain of command or in both capacities and by both manners.  Current law does not establish any means of verifying the constitutional legitimacy of orders or the constitutional chain of command.

(19)        Unlike the Federal officers in Wilson v. Layne who brought reporters along with them when they executed search warrants (526 U.S. 703 [1999]), there IS a simple consensus of authority on the question of the requirement that the President be a natural born citizen sufficient to provide a basis for a reasonable army officer to doubt that his country’s commander-in-chief might be accepted as legitimate outside the United States.  This Court should rule that a reasonable officer has the right to ask, indeed to demand, that a federal court enjoin his overseas deployment until such time as the answers raised by Barack Hussein Obama’s use of multiple addresses (almost all outside of any reasonable connection to his “official” life history) and social security numbers, including at least one social security number of a deceased person (Exhibit B).

(20)       That this Plaintiff claims status as a conscientious objector must be clarified and emphasized in several ways: Plaintiff is no pacifist, nor an anti-war protester.  Plaintiff actually does want to go to Afghanistan and he verifies this fact, as he does this entire petition, under penalty of perjury (as required by Rule 65(b)(1).

(21)        Plaintiff believes that his service in Afghanistan would be positive and serve the interests of world peace, the advancement of the people of Afghanistan, and the security of the people of the United States (and the allies of the United States in Europe and around the world).

(22)        However, Plaintiff is also aware that the general opinion in the rest of the world is that Barack Hussein Obama has, in essence, slipped through the guardrails to become President.  The United States and her military, commanded by a man who has himself expressed pacifist and anti-military opinions, are the targets of derision and ridicule abroad.

(23)        The grounds for grant of a Preliminary Injunction are well known: (a) likelihood of success on the merits, (b) balance of hardships, (c) irreparable injury to Plaintiff, and (d) public policy favors the issuance of injunctive relief.

(24)        Plaintiff submits that as to the likelihood of success on the merits—since this is a question of first impression, Plaintiff should be awarded the temporary injunction regardless of the lack of precedent, (a) because of the critical nature of any serious question concerning the constitutional legitimacy of the President as Commander-in-Chief, (b) because of the critical federal interest in this question, especially from the standpoint of military presence abroad, in potentially if nor certainly hostile territory, (c) because of the mounting evidence of fraud on the part of the de facto President shown in Exhibits E and F,  and (d) because of the well-known but as yet undecided question of Barack Hussein Obama’s legitimacy, qualified immunity does not protect any officer from a potentially erroneous decision in this matter, Plaintiff’s likelihood of success on the merits—at least on the question that standards need to be established for constitutional legitimacy of the President, and that military officers must have the right (especially in time of domestic peace and no known imminent invasion or attack on the country) to demand proof of legitimate chain of command.

(25)        As to balance of hardships, the Plaintiff Stefan Frederick Cook is a Patriotic American who voluntarily joined the army and placed his life on the line for the defense of freedom and the rule of law (“truth, justice, and the American way of life”) as his career.

(26)        All three Plaintiffs have found reason to doubt the legitimacy of the Commander-in-Chief, and demands proof, at the very minimum, of the Barack Hussein Obama’s constitutional legitimacy and eligibility, which is made more acute by the evidence of multiple addresses and social security numbers attached as Exhibit E.

(27)        However, Barack Hussein Obama, in order to prove his constitutional eligibility to serve as President, basically needs only produce a single unique historical document for the Plaintiff’s inspection and authentication: namely, the “long-form” birth certificate which will confirm whether Barack Hussein Obama was in fact born to parents who were both citizens of the United States in Honolulu, Hawaii, in or about 1961.  It is no answer to show the short-form birth certificate which has no seals and is signed by no one and is produced, as most birth-certificates are, by computerized reproduction.  In light of Exhibits E, the affidavit of Neal Sankey, as well as Exhibit F, Plaintiff submits under his sworn acknowledgement and verification below, that only final proof of Barack Obama’s natural born citizenship by authentic, and authenticated, legal documents will prevent this Plaintiff from fear that he is serving a false master, a false commander-in-chief, a false President, and thereby violating the international laws of nations by acting without legitimate authority.

(28)       However, as a practical matter, the mere execution by the President of a comprehensive medical release under HIPAA (Privacy Rule of the Health Insurance Portability and Accountability Act of 1996) would permit the Plaintiffs to obtain most of the information which they are seeking; separate releases of the President of his personal passport files and history maintained by the United States Department of State and Social Security Commission would resolve all other questions raised by Exhibits E and F.

(29)        Accordingly, the President needs to sign three releases concerning his personal and private history prior to becoming President, and the President cannot possibly suffer any unjustified inconvenience or harm from the execution of these documents, especially since Presidents have historically disclosed their full medical histories as a routine matter of public interest and concern.

(30)       The balance of equities, the balance of hardships, clearly favor the entry of this Temporary Restraining Order.  From the Plaintiff’s standpoint, if the history of World War II and the Nuremberg Trials teaches us anything, it is that no military officer should ever rely on “apparent” authority or “facial” legitimacy of orders.  Every officer has an independent duty to use his conscience and evaluate the legitimacy of the chain of command under which he operates, and when reasonable doubts arise, the Courts should afford remedy and protection.  If Plaintiff were to proceed to wage war on the people of Afghanistan, even the Taliban and other proven sponsors of terrorism, under the orders of an illegitimate President, Plaintiff runs the risk of acting as a de jure war criminal—not entitled to the protections of international law at all.

(31)        All that is asked of the President is that he humbly acknowledge and produce his true and complete “original” birth certificate.  So long as this form proves the Barack Hussein Obama’s status as a “natural born” citizen, the President and the Presidency will not only have suffered no harm, but will have reaffirmed the faith of the people in the rule of law as dominating all men, including the President of the United States.

(32)        As discussed above, the balance of the equities and hardships shows that, so long as the President is and has always been honest and truthful about his place of birth and parentage, he will suffer no harm at all—and if the President has not always been honest and truthful about his origins, then he will suffer no unjustified harm or injury as a result of the necessary disclosures.

(33)        However, the potential harm to the Plaintiff if relief is denied is that he will be required to serve heavily burdened by a doubtful and unwilling conscience, which in itself is and ought to be repugnant to a free society.  Involuntary servitude was abolished in 1865, and this Court should not underestimate the crisis of confidence which an order of unquestioning obedience will have, nationwide, on the legitimacy and “full faith” which can be accorded to its officers and their actions.

(34)        A man who doubts his commander-in-chief cannot be a good soldier, unless he is instructed that “following orders” is the highest virtue of all, and surely the Nuremberg Trials, and the Trial of Adolf Eichman in Jerusalem, have proven this position false and dangerous to civilization and the moral and ethical administration of government.  This harm, this injury to conscience, is not speculative, it is not remote, it is immediate and without any legal remedy of damages or later honor bestowed as a result of service.

(35)        Perhaps slightly more remote and speculative, but possible, plausible, and by no means without precedent in the past century is the possibility that if THIS Plaintiff is not allowed access to the truth, someone else may yet expose that the current de facto President serves in mockery and defiance of the Constitution, and that all his military adventures abroad will eventually be classified as private, slave armies engaged in private, piratical warfare unsanctioned by International Law and subject this Plaintiff to prosecution as a war criminal.

(36)        As far as public policy goes, allusion has already been made to the crisis of public confidence—even if only 10-20 percent of the American people believe that Barack Hussein Obama is lying about or hiding the details of his true place of birth or national origins—this Court would be doing the public interest a great service by protecting this Plaintiff’s right to conscientiously object based on his reasonable and well-founded doubts concerning the chain of command originating from a questionable commander-in-chief.

(37)        Furthermore, judicial resolutions of festering doubts and lack of confidence can diffuse social tension and re-establish confidence in the rule of law more generally.

(38)       Plaintiff points out that there was another time in United States history when officers of the military were forced to make a choice whether to follow the central government or their consciences.  That time in United States history was in 1861 when some of the finest officers of the United States Army felt that they and their constitution had been betrayed by the central government, and that is how Mexican War heroes Jefferson Davis and Robert E. Lee, among so many others, became the leaders of the Confederate States of America.

(39)        There were no lawsuits filed at that time—5 U.S.C. §702 and 42 U.S.C. §§1983-1988 had not yet been enacted.  But the public interest is served by permitting Army officers to seek judicial protection and assistance when they question the legitimacy and authority of the commander-in-chief with regard to moral and constitutional issues.

(40)       There are no “competing” governments now—no seceding states, however over 30 states have either passed or considered the bills of Sovereignty lately, which can be a step towards secession and a sign of vast dissatisfaction with the Federal government and the President.

(41)        In historical hindsight it is easy to say the Jefferson Davis and Robert E. Lee hurt their own states of Mississippi and Virginia by supporting secession.

(42)        In historical hindsight it is easy to say that even the pro-slavery cause might have been better served by acquiescence under Abraham Lincoln, who (absent secession and civil war) lacked any realistic legal power, as President in 1861, to interfere with slavery in any state or territory where it already existed.

(43)        Plaintiff submits that judicial resolution of festering sores such as occur when people feel they cannot trust their leaders to follow the law, to live by the law, and to respect the concerns of all the people, especially when it will cost their leaders almost nothing to restore or bolster confidence, is a major public policy reason why this Application for Preliminary Injunction should be granted.


This application for Application for Preliminary Injunction will be served on all parties named, but as required, will in addition be served on Maxwell Wood, the United States Attorney for the Middle District of Georgia, resident in Macon, Georgia, with offices in Athens, Columbus, Macon and Valdosta, Georgia, as required by law, as well as on Eric Holder, the Attorney General of the United States of America.

The timing of Plaintiff Stefan Frederick Cook’s receipt of the rescission of his orders on July 14, 2009, and the sudden the cancelation of his imminent deployment from Fort Benning to Afghanistan, do not render any part of this action declaratory judgment and injunction moot.  In fact, because the orders could be reinstated at any time, there is now more than adequate time to render effective relief.   Effective relief  is still required and can still be ordered at this stage for the Plaintiffs, including all those subject to recall or mobilization to active duty at any time in the future. See Bernhardt v. County of Los Angeles, 279 F.3d 862, 871 (9th Cir.2002).

Article III, Section 2 of the Constitution limits federal court jurisdiction to “cases” and “controversies.” This case or controversy requirement exists through all stages of federal judicial proceedings. Spencer v. Kemna, 523 U.S. 1, 7, 118 S.Ct. 978, 140 L.Ed.2d 43 (1998). A number of doctrines have developed, however, to permit courts to review a case in which it is no longer possible to remedy the particular grievance giving rise to the litigation.

One is the exception to the mootness doctrine for violations “capable of repetition, yet evading review.” See, e.g., Gerstein v. Pugh, 420 U.S. 103, 110 n. 11, 95 S.Ct. 854, 43 L.Ed.2d 54 (1975).   This is such a case.  It is most unlikely that any given individual could have his constitutional claim decided on appeal after he is ordered to duty but before his actual deployment.   In Gerstein the Supreme Court held the exception to the mootness doctrine for violations “capable of repetition, yet evading review” applied because the constitutional violation was likely to be repeated but would not last long enough to be reviewed before becoming moot. Id.

An order to a reserve officer to be deployed in active duty is ordinarily  even more temporary than the pretrial detention at issue in Gerstein. This case evades review for essentially the same reason. The Plaintiffs could not have brought the challenges to this court before the harm of issuance of illegal orders without proper chain of command could be addressed or resolved judicial.

This situation giving rise to this challenge also is capable of repetition.  Plaintiffs can only assume that issuance of orders to mobilize will be recurring on the part of these defendants. See O’Shea v. Littleton, 414 U.S. 488, 496, 94 S.Ct. 669, 38 L.Ed.2d 674 (1974).   This case is therefore not readily distinguishable from an abortion case, the classic case capable of repetition yet evading review, because we can assume a woman can become pregnant again. See generally Roe v. Wade, 410 U.S. 113, 125, 93 S.Ct. 705, 35 L.Ed.2d 147 (1973).  Some cynics might say that Barack Hussein Obama’s refusal to document his personal and medical history once challenged has amounted to an abortion of the legitimacy of the American Presidency, and of the confidence of the people, especially the men and women of the United States Armed Forces, who serve directly under his de facto Command and long for a show of clear and convincing de jure validation of his commitment to the Constitution and Rule of Law as applied to all citizens.

This makes no material difference, however, because a future mobilization order assuredly will surely be issued against some officers of the United States Army, and the shackling policy would similarly escape review.  Furthermore, it appears to be a policy of the Federal Government to avoid answering questions about de facto President Barack Hussein Obama’s constitutional qualifications to occupy the White House and serve as commander-in-chief.  Thus, this case is capable of repetition when because defendants are challenging an ongoing government policy. Oregon Advocacy Ctr. v. Mink, 322 F.3d 1101, 1118 (9th Cir.2003). In Oregon Advocacy Center, the plaintiffs alleged that the state mental hospital, which was charged with evaluating and treating mentally incapacitated defendants, refused to accept the defendants on a timely basis. Id. at 1105-06. The plaintiffs challenged a state policy that results in the delays. Id. at 1118.

Although the particular situation precipitating a constitutional challenge to a government policy may have become moot, the case does not become moot if the policy is ongoing. Id. “The continued and uncontested existence of the policy that gave rise to [the] legal challenges forecloses [the] mootness argument.” Id.

The D.C. Circuit similarly held that when a complaint challenges an acknowledged or apparent government policy, the government cannot prevail by arguing that the controversy became moot when the particular situation at issue resolved itself. Ukrainian-American Bar Ass’n v. Baker, 893 F.2d 1374, 1377 (D.C.Cir.1990). The defendants in this case are challenging what they allege to be an ongoing government policy of stonewalling and obfuscation.

As a practical matter, this case is materially similar to a class action in which the class representative’s claims may become moot, but there are members of the class whose claims are not moot.  It is actually quite possible that this case will be converted into a class action.  The Supreme Court has held that under the capable of repetition, yet evading review doctrine, the termination of a class representative’s claim does not moot the claims of other class members. See Gerstein, 420 U.S. at 110 n. 11, 95 S.Ct. 854. This holding applies outside of the class action context when the circumstances of the case are analogous to those found in class action cases. Oregon Advocacy Ctr., 322 F.3d at 1117; see also Gerstein, 420 U.S. at 111 n. 11, 95 S.Ct. 854.


WHEREFORE, Plaintiff prays that this Court will enter a Preliminary Injunction upon full-hearing, waiving all bonds or other financial requirements. Specifically, Plaintiff prays that this Court

(1) recognize and respect Plaintiffs’ status, and the status of all persons similarly situated in the United States Army, as conscientious objectors based solely on legitimate doubts concerning the constitutional qualifications and eligibility of the de facto President and Commander-in-Chief, Barack Hussein Obama,

(2) enjoin Defendants Robert M. Gates, as well as Colonels Louis B. Wingate, Wanda L. Good and Thomas D. MacDonald from deploying Plaintiffs or any persons similarly situated to Afghanistan or anywhere on active duty at all until

(3) such time as the constitutional qualifications and eligibility of Barack Hussein Obama to serve as President and Commander and Chief have been established by clear and convincing evidence (which standard of proof befits a constitutional requirement, especially in light of the confusing and conflicting circumstantial evidence set forth in Exhibits E and F).

Respectfully submitted,


July 15, 2009


Orly Taitz, DDS, Esq.

California Bar ID No. 223433


Major General Carol Dean Childers

Lieutenant Colonel David Earl Graef

Major Stefan Frederick Cook

Attorney & Counselor at Law

26302 La Paz, Suite 211

Mission Viejo Ca 92691

29839 S. Margarita Pkwy

Rancho Santa Margarita Ca 92688

Ph. W.: 949-586-8110 Cell: 949-683-5411

Fax 949-586-2082


On this 15th day of July, 2009, the undersigned Plaintiff Major Stefan Frederick Cook appeared in person before me and, having been by me duly administered the oath as required by law, and further having been advised that he made all statements under penalty of perjury, he then and there did depose himself and state that he had read the above-and-foregoing Application for Preliminary Injunction to prevent his deployment to Afghanistan under orders of a chain of command headed by Barack Hussein Obama, and that he had personally verified that all the factual statements contained therein.

As required by Rule 65 the same Plaintiff Major Stefan Frederick Cook also stated that Exhibit A is a true and correct copy of his orders of deployment to active duty, requiring him to report to MacDill Airforce Base in Tampa on July 15 and from thence be transferred to Fort Benning, Georgia, and from thence be deployed in Afghanistan.  Exhibits B and C are true and correct copies of the revocation of these orders and e-mail transmittals of the same.  Exhibit D is a true and correct copy of the “Army Values” card Plaintiff carries at all times.

Plaintiff affirmed and acknowledged that he conscientiously objected to serving under orders from the armed forces of the United States on active duty if and as currently headed by Barack Hussein Obama, fearing that the President obtained and held his office under false pretenses and fraudulent statements concerning his constitutional eligibility, personal history, and background, and that Plaintiff would be acting in violation of international law by engaging in military actions outside the United States under this President’s command, and that Plaintiff would thus be simultaneously unable to perform his duties in good conscience and yet be simultaneously subjecting himself to possible prosecution as a war criminal by the faithful execution of these duties.

In conclusion, Plaintiff affirmed and verified that he submitted this Application for Preliminary Injunction solely for the purposes and reasons stated, and not for any fear or reluctance to serve his country in the armed forces, but purely and simply from his complete distrust of the Commander-in-Chief and the constitutional qualifications of this de facto President to lead and serve the army, including but not limited to his legitimate authority and power to establish a de jure chain of command.

This verification and acknowledgement was done and executed on this 15th day of July, 2009, in Tampa, Hillsborough County, Florida.


Major Stefan Frederick Cook, U.S. Army


As aforesaid, Plaintiff Stefan Frederick Cook appeared in person before me on July 15, 2009, to acknowledge, execute, sign under oath, and verify the above and foregoing Application for Preliminary Injunction as Required by Rule 65 of the Federal Rules of Civil Procedure.

I am a notary public, in good standing, authorized and qualified by the State of Florida to administer oaths.


Notary Public, State of Florida,

Tampa, Hillsborough County


Printed Name of Notary:_______________, address:_________________

My Commission Expires:____________________


The above-and-foregoing Application for Preliminary Injunction was served by facsimile and/or hand delivery on July 15, 2009, on the following parties:

Colonel Thomas D. MacDonald, Garrison Commander, Fort Benning, Georgia

Colonel Wanda L. Good*, Retired U. S. Army Human Resources Command-St. Louis

1 Reserve Way St. Louis, MO 63132

Col. Louis B. Wingate, U. S. Army Human Resources Command-St. Louis

1 Reserve Way, St. Louis, MO 63132 .

Dr. Robert M. Gates, Secretary of Defense, by and through the Pentagon:

1000 Defense Pentagon  Washington, DC 20301-1000

President Barack Hussein Obama,


The White House

1600 Pennsylvania Avenue

Washington, D.C. 20500

by and through the Attorney General of the United States, Eric Holder, at

U.S. Department of Justice

950 Pennsylvania Avenue, NW

Washington, DC 20530-0001

and Maxwell Wood, United States Attorney for the Middle District of Georgia, at

U.S. Attorney’s Office 
Gateway Plaza 
300 Mulberry Street, 4th Floor
Macon, Georgia 31201 
Tel: (478) 752-3511

And also at:

Columbus Division  
1246 First Avenue  
SunTrust Building, 3rd Floor  
Columbus, Georgia 31901  
Tel: (706) 649-7700.


Attorney Orly Taitz, Esquire,

For the Plaintiff Major Stefan Frederick Cook

EXHIBIT A: Deployment Order Received by U.S. Army Major Stefan Frederick Cook

Exhibit B: Revocation of Deployment Order July 14, 2009

Exhibit C: E-mail from Master Sargeant Matos

Exhibit D: “Army Values” Card

Exhibit D: Affidavit of Neal Sankey And list of Addresses and Social Security Numbers Utilized by Barack H. Obama

Exhibit E: Affidavit of Sandra Ramsey Lines Concerning Barack Hussein Obama’s Web-published

[1] The Defense Security Service (DSS) is an agency of the United States Department of Defense (DoD). Within areas of DoD responsibility, DSS is tasked with facilitating personnel security investigations, supervising industrial security, and performing security education and awareness training. It is not a Federal law enforcement organization; it does not have police powers. Originally known as the Defense Investigative Service (DIS), DIS was established in 1972. DSS changed from DIS in 1999.

[2] 5 U.S.C. §702 states in relevant part:

The United States may be named as a defendant in any such action, and a judgment or decree may be entered against the United States: Provided, That any mandatory or injunctive decree shall specify the Federal officer or officers (by name or by title), and their successors in office, personally responsible for compliance.


Related Links:

OC Weekly:  Meet Orly Taitz, Queen Bee of People Obsessed With Barack Obama’s Birth Certificate

The Huffington Post:  Stefan Frederick Cook: Soldier Won’t Deploy Over Obama Birth Certificate

US Senate Res. 511:  Senators: McCain Is A ‘Natural Born Citizen’

PrisonPlanet:  African Media: Obama Returned To “Continent Of His Birth”

Salon:  Why the stories about Obama’s birth certificate will never die

KITV:  Obama’s Birth Certificate Verified By State

American Thinker:  Why the Barack Obama Birth Certificate Issue Is Legitimate

New York Times:  A Hint of New Life to a McCain Birth Issue

Lou Dobbs: Hey, Why Won’t Obama Produce His Birth Certificate? (Listen mp3)

Wiki:  Executive Order 13489

Signed on 21 January 2009.  Federal Register page and date: 74 Fed. Reg. 4669 26 January 2009. Restores the wording of Executive Order 12667, and revokes the Bush administration replacement Executive Order 13233.




Georgia Estimated ARRA Funds

Stimulus oversight requires diligence

By Kristi E. Swartz
The Atlanta Journal-Constitution

The $6.35 billion in federal stimulus money that is flowing into Georgia may require the establishment of a state office to make sure the dollars wind up where they’re supposed to, state officials say.

Gov. Sonny Perdue is pondering a new state authority to track federal Recovery Act money, a governor’s spokesman said, even though the state already has had four agencies working on a monitoring program since February.

Members of those agencies —- the state auditor, inspector general, accounting and planning and budget —- will meet with Perdue over the next few weeks to further explore the idea, spokesman Chris Schrimpf said.

The need for a new oversight office was underscored in a federal audit, released last week, which determined that Georgia’s resources for tracking stimulus money “continue to be limited.” The audit reported that both the state auditor and inspector general want to hire more people to keep track of the federal funds.

The state auditor’s office, which has assigned 140 people to audit stimulus money through fiscal 2011, said it will need incremental staff additions in coming years.

According to the report, released by the Government Accounting Office, state auditor Russell Hinton will need seven more workers to help with audits for fiscal 2009, 16 more for fiscal 2010 and 10 more for fiscal 2011.

Two of the four workers in the state inspector general’s office have some oversight of stimulus funds, the report said, but inspector general Elizabeth Archer wants to hire five more people.

In addition to making sure agencies are complying with Recovery Act guidelines and reviewing how funds are being spent, the inspector general’s office would review contracts tied to stimulus money and investigate allegations that money was being misspent, the report said.

How the state would fund the new stimulus tracking office is unclear. The federal Office of Management and Budget has guidelines on how stimulus money can be spent for administrative purposes and a bill is pending in Congress on how to track stimulus money, Schrimpf said.

The state has opened a Recovery Act Web site with a searchable database for the money each agency has received or expects to receive. Consumer advocates say that, combined with other efforts, is a strong step in the right direction. But they want more.

“We have much work ahead to gain a level of confidence that all of the i’s have been dotted and the t’s crossed,” said Angela Speir Phelps, deputy director of Georgia Watch, one of the groups that created the Georgia Stimulus Transparency and Accountability Coalition.

The state has started using an automated system to track jobs created or saved because of stimulus money, according to the federal audit, which is the second such report released since funds were first disbursed.

The Web-based system is a data warehouse that state agencies have already been using to report on other federal money they have been allocated, said state accounting officer Greg Griffin. Using that system as a model, the state re-created another one for federal stimulus money.

Griffin declined to provide a figure for the number of jobs that have been created with stimulus dollars, stating that not every agency has begun using the data warehouse


Georgia – July 8, 2009

The content below was excerpted from the Georgia Appendix (PDF, 45 pages) of GAO’s second bimonthly review of the Recovery Act.[1]

Use of Funds

GAO’s work focused on nine federal programs, selected primarily because they have begun disbursing funds to states. The programs include existing programs receiving significant amounts of Recovery Act funds or significant increases in funding, and new programs. Program funds are being directed to helping Georgia stabilize its budget and support local governments, particularly school districts, and several are being used to expand existing programs. Funds from some of these programs are intended for disbursement through states or directly to localities. The funds include the following:

Funds Made Available as a Result of Increased Medicaid Federal Medical Assistance Percentage (FMAP)

As of June 29, 2009, Georgia had received more than $541 million in increased FMAP grant awards, of which it had drawn down about $498 million, or 92 percent. Georgia officials reported they are using funds made available as a result of the increased FMAP to offset the state budget deficit. State officials also reported they are planning to use these funds to cover the state’s increased caseload, to maintain current Medicaid populations and benefits, and avoid cuts to eligibility, pending state approval to do so.[2]

Highway Infrastructure Investment Funds

The U.S. Department of Transportation’s Federal Highway Administration (FHWA) apportioned $932 million in Recovery Act funds to Georgia. As of June 25, 2009, the federal government’s obligation for Georgia was $449 million. Georgia has selected the first phase of projects to be completed with Recovery Act funds and has awarded 44 contracts totaling $88 million. The projects selected include a bridge-widening project in Gwinnett County and a road-widening and -expansion project in Henry County.

U.S. Department of Education State Fiscal Stabilization Fund (SFSF)

The U.S. Department of Education has awarded Georgia its entire $1 billion initial allocation. As of June 30, 2009, the state had allocated $698 million of these funds to local education agencies and institutions of higher education. These entities plan to use the funds to stabilize their budgets and retain staff. For example, the University of Georgia plans to use its $19 million allocation for fiscal year 2010 to retain approximately 160 full-time faculty positions.

Title I, Part A, of the Elementary and Secondary Education Act (ESEA) of 1965

The U.S. Department of Education has awarded Georgia about $176 million in Recovery Act ESEA Title I, Part A funds, or 50 percent of its total allocation of approximately $351 million. The state allocated all of these funds to the local education agencies within the state in late April 2009. Local education agencies plan to use these funds to help educate disadvantaged youth by, among other things, providing training and other professional development opportunities for teachers. For example, the Richmond County School System plans to use its funds to expand services to 23 additional elementary, middle, and high schools.

Individuals with Disabilities Education Act (IDEA), Parts B and C

The U.S. Department of Education has awarded Georgia about $169 million in Recovery Act IDEA, Part B and C funds, or 50 percent of its total allocation of about $339 million. Georgia allocated all of its IDEA, Part B funds to the local education agencies within the state in late April 2009. Local education agencies plan to use these funds to support special education and related services for preschool and school-aged children with disabilities. For instance, the Atlanta Public Schools plans to use its funds to provide training for its staff and retain 49 special education paraprofessionals.

Workforce Investment Act Youth Program

The U.S. Department of Labor allotted to Georgia about $31.3 million in Workforce Investment Act Youth Recovery Act funds. As of June 30, 2009, the state had allocated $26.7 million of these funds to local workforce boards. As of June 19, 2009, about 8,700 youth were enrolled in summer youth programs statewide. Overall, the state expects the funds to create more than 10,000 summer jobs for its youth.

Edward Byrne Memorial Justice Assistance Grants

The U.S. Department of Justice’s Bureau of Justice Assistance has awarded $36 million in Recovery Act funding directly to Georgia. As of June 25, 2009, none of these funds had been obligated by the Georgia Criminal Justice Coordinating Council, which administers these grants for the state.[3] The state plans to use these funds to support positions at state agencies with criminal justice missions and fund assistance for victims of crime, among other things.

Weatherization Assistance Program

The U.S. Department of Energy (DOE) allocated to Georgia about $125 million in Recovery Act weatherization funding for a 3-year period. As of June 26, 2009, DOE had provided $62.5 million to Georgia, and the state had obligated none of these funds. Georgia plans to get weatherization activities under way in August 2009 and ultimately weatherize about 13,600 homes owned by low-income families.

Public Housing Capital Fund

The U.S. Department of Housing and Urban Development has allocated about $113 million in Recovery Act funding to 184 public housing agencies in Georgia. As of June 20, 2009, these public housing agencies had obligated about $8 million (7.5 percent). At the two public housing agencies we visited (Atlanta and Athens), these funds—which flow directly to public housing authorities—will be used for various capital improvements, including modifying bathrooms and kitchens and replacing roofs, windows, and elevators.

Safeguarding & Transparency

Georgia has issued unique accounting codes to track Recovery Act funds separately. In addition, the Governor’s Office of Planning and Budget has issued a risk management handbook that requires each agency that is a direct recipient of Recovery Act funding to prepare a risk mitigation plan. The State Auditor has provided internal controls training to state agency personnel but is awaiting additional federal guidance on targeting its risk assessments to include programs receiving Recovery Act funding. In addition, the individual state agencies that administer Recovery Act funds have implemented internal controls, such as risk assessments and monitoring plans.

Assessing the Effects of Spending

While waiting for additional federal guidance, the state proceeded with plans to adapt an automated system used for financial management to meet Recovery Act reporting requirements. The system is operational, and the state has begun collecting data on jobs created and retained.

Additional content excerpted from the Georgia Appendix:

Georgia Is Using Recovery Act Funds to Offset Declining Revenues

To offset declining revenue, Georgia included Recovery Act funding in both its amended fiscal year 2009 budget and its fiscal year 2010 budget. Our work, which focused on nine selected federal programs, indicated that Georgia has started spending its Recovery Act funds. The nine programs on which we focused included the Medicaid program, three education programs, and the federal-aid highway program.

During fiscal year 2009, Georgia took a number of cost-saving measures due to its declining fiscal condition:

A few agencies furloughed staff. For instance, the Georgia Department of Transportation required all full-time employees to take 1 furlough day during the months of April, May, and June 2009 and plans to continue the furloughs in fiscal year 2010. The Georgia Department of Education required all employees to take 1 furlough day from November 17, 2008, through February 13, 2009.

A number of programs were cut or eliminated. For instance, the primary funding mechanism for elementary and secondary education was reduced by approximately $550 million in the amended fiscal year 2009 budget and by about $431 million in the fiscal year 2010 budget. At the Georgia Department of Human Services, a reduction of $16 million impacted the level of service staff could provide in the food stamp, Medicaid, and child protective services programs. The Georgia Department of Community Affairs saw a reduction of $76 million in its amended fiscal year 2009 budget and $74 million in its fiscal year 2010 budget. These reductions will impact programs that provide grants and assistance to rural areas of the state and state-funded community development programs that assist homeless families in achieving housing stability, among other things.

Some agencies canceled or delayed contracts. For example, when funding for the Georgia Department of Corrections’ general operations was reduced by $25 million, the department decreased its procurement of goods and services, among other things. In addition, budget cuts at the Georgia Department of Administrative Services delayed the full implementation of an upgrade of the state’s procurement system.

Georgia’s amended fiscal year 2009 budget and its fiscal year 2010 budget were signed by the Governor on March 13, 2009, and May 13, 2009, respectively. According to state budget officials, the inclusion of Recovery Act funds in both budgets reduced the number of cuts required to balance the budgets. The amended fiscal year 2009 budget included $477 million in Recovery Act funds for Medicaid. The fiscal year 2010 budget included $727 million for Medicaid, $521 million in State Fiscal Stabilization Funds for education stabilization, and $140 million in State Fiscal Stabilization Funds for government services (such as staffing costs at state prisons and the state’s forensic laboratory system).4

Since the amended fiscal year 2009 budget was signed in March 2009, the state’s revenue projections have continued to decline. The state’s net revenue collections for May 2009 were 14.4 percent less than they were in May 2008, representing a decrease of approximately $212 million in total tax and other collections. On May 28, 2009, the lower-than-expected revenue projections led the Governor to instruct the Office of Planning and Budget to reduce available funds by 25 percent for the month of June (the last month of fiscal year 2009).

The lower-than-expected revenue numbers also caused Georgia to use more Recovery Act funds in fiscal year 2009 than it had anticipated using. In addition to using the Recovery Act Medicaid funds approved in its amended fiscal year 2009 budget, it used $177 million in education stabilization funds and approximately $12 million in government services funds. Further, the state used more of its reserves in fiscal year 2009 than originally planned. Instead of the $200 million it planned to use from its Revenue Shortfall Reserve, or “rainy day” fund, in fiscal year 2009, the state may use up to $650 million.5 The state also has budgeted an additional $259 million in fiscal year 2010, further depleting Georgia’s rainy-day fund.

The Governor’s office has required state agencies to spend funds judiciously and develop action plans that recognize that the funding is temporary. However, Georgia is still in the process of developing a strategy for winding down its use of Recovery Act funds. In part, such a strategy is dependent on revenue and expenditure projections, which will be updated as part of the fiscal year 2011 budget planning process. In addition, risk mitigation plans currently being developed by state agencies may impact the state’s exit strategy.

State resources for oversight of Recovery Act funds continue to be limited. The State Auditor highlighted the need for increased staffing to complete single audits for fiscal years 2009–2011. Approximately 140 of his current staff will have some Recovery Act auditing responsibilities. To meet additional auditing responsibilities, the State Auditor estimated that his office would need 7 to 8 additional staff for the fiscal year 2009 audits, at least 16 additional auditors over current staffing levels for the fiscal year 2010 audits, and at least 10 auditors over current staffing levels for the fiscal year 2011 audits. The Georgia Inspector General’s office currently has 4 staff, 2 of which have Recovery Act responsibilities. According to the Inspector General, the office needs about 5 more staff in order to monitor compliance with Recovery Act provisions. These staff would be responsible for overseeing and monitoring the state agencies’ distribution of funds, reviewing contracts, and investigating allegations of wrongdoing related to the funds.

Increased FMAP Funds Are Allowing Georgia to Maintain Its Medicaid Program

Medicaid is a joint federal-state program that finances health care for certain categories of low-income individuals, including children, families, persons with disabilities, and persons who are elderly. The federal government matches state spending for Medicaid services according to a formula based on each state’s per capita income in relation to the national average per capita income. The rate at which states are reimbursed for Medicaid service expenditures is known as the Federal Medical Assistance Percentage (FMAP), which may range from 50 percent to no more than 83 percent. The Recovery Act provides eligible states with an increased FMAP for 27 months from October 1, 2008, through December 31, 2010.6 On February 25, 2009, the Centers for Medicare & Medicaid Services (CMS) made increased FMAP grant awards to states, and states may retroactively claim reimbursement for expenditures that occurred prior to the effective date of the Recovery Act.7 Generally, for federal fiscal year 2009 through the first quarter of federal fiscal year 2011, the increased FMAP, which is calculated on a quarterly basis, provides for (1) the maintenance of states’ prior year FMAPs; (2) a general across-the-board increase of 6.2 percentage points in states’ FMAPs; and (3) a further increase to the FMAPs for those states that have a qualifying increase in unemployment rates. The increased FMAP available under the Recovery Act is for state expenditures for Medicaid services. However, the receipt of this increased FMAP may reduce the funds that states would otherwise have to use for their Medicaid programs, and states have reported using these available funds for a variety of purposes.

From October 2007 to April 2009, the state’s Medicaid enrollment grew from 1,244,889 to 1,343,756, an increase of almost 8 percent. Enrollment during this period varied, and there were several months where enrollment decreased (see fig. 1). The increase in enrollment was mostly attributable to the population group of children and families, and there was a decline in the disabled individuals’ population group.

As of June 29, 2009, Georgia had drawn down about $498 million in increased FMAP grant awards, which is about 92 percent of its awards to date.8 Georgia officials reported they are using funds made available as a result of the increased FMAP to offset the state budget deficit. State officials also reported they are planning to use these funds to cover the state’s increased caseload, to maintain current Medicaid populations and benefits, and avoid cuts to eligibility, pending state approval to do so.

As a result of Georgia’s economic climate in the fall of 2008, the state had delayed provider rate increases and began exploring options that would avoid potential cuts to the program, such as to certain eligibility categories and optional Medicaid benefits. An official noted that with the increased FMAP funds, Georgia has been able to maintain its Medicaid eligibility categories and benefits. In using the increased FMAP, Georgia officials reported that the Medicaid program has incurred additional costs related to

  • personnel needed to ensure programmatic compliance with requirements associated with the increased FMAP,
  • personnel needed to ensure compliance with reporting requirements related to the increased FMAP, and
  • the administrative processes devoted to project management and the creation of communication avenues for internal and external tracking of the use of stimulus funds.

Georgia officials said they did not have any concerns about maintaining eligibility for increased FMAP. The state was not considering any changes to program eligibility and was already in compliance with the prompt pay requirements.9,10 In terms of tracking the use of these funds, the state relies on an existing accounting system to track the use of increased FMAP and uses unique identifiers for these funds, which are tracked separately from regular FMAP. State officials also noted that the state separately codes expenditure transactions related to the increased FMAP and conducts reconciliations to ensure correctness. In addition, the officials noted that the Governor’s office has appointed an individual to work with the state audit and accounting offices to generate a weekly report on both receipts and expenditures related to the increased FMAP. To further ensure correctness, a staff person independently reviews the details of services for which increased FMAP was obtained, according to officials.

Regarding the Single Audit, both the 2007 and 2008 audits identified material weaknesses in the state’s Medicaid program. The 2007 Single Audit for Georgia identified one material weakness related to the Medicaid program.11 Specifically, the audit found examples of where fee-for-service payments and capitation payments were made for the same services. These double payments were estimated to total $52.7 million. The state concurred with the finding, noting that the double payment was the result of an imperfect transmittal of a member database update from the Medicaid Management Information System. The state implemented corrective action procedures, which included efforts to improve monitoring. The 2008 Single Audit identified concerns related to documentation of eligibility and problems in calculating and reconciling accounts receivable.

Funds Have Been Obligated for Georgia Federal-Aid Highway Projects

The Recovery Act provides funding to the states for restoration, repair, and construction of highways and other activities allowed under the Federal-Aid Highway Surface Transportation Program and for other eligible surface transportation projects. The Recovery Act requires that 30 percent of these funds be suballocated for projects in metropolitan and other areas of the state. Highway funds are apportioned to the states through existing federal-aid highway program mechanisms, and states must follow the requirements of the existing program including planning, environmental review, contracting, and other requirements. However, the federal fund share of highway infrastructure investment projects under the Recovery Act is up to 100 percent, while the federal share under the existing federal-aid highway program is generally 80 percent.

As we reported in April 2009, $932 million was apportioned to Georgia in March for highway infrastructure and other eligible projects. As of June 25, 2009, $449 million had been obligated. The U.S. Department of Transportation has interpreted the term “obligation of funds” to mean the federal government’s contractual commitment to pay for the federal share of the project. This commitment occurs at the time the federal government signs a project agreement. As of June 25, 2009, no funds had been reimbursed by FHWA. States request reimbursement from FHWA as the state makes payments to contractors working on approved projects.12

Status of Planning for Highway Infrastructure Spending

As of June 12, 2009, the Governor had certified three rounds of projects to be funded with Recovery Act funds, completing the Georgia Department of Transportation’s first phase of planning. The selection process for the second phase of projects was to be completed by the end of June 2009. According to FHWA data, the majority of the funds that had been obligated as of June 25, 2009, were for pavement projects (see table 1).

As of June 12, 2009, the Georgia Department of Transportation had awarded 44 contracts, for a total of $88 million.13 Most of these contracts were awarded for an amount that was less than originally estimated. According to Georgia Department of Transportation officials, bids have been coming in lower than expected due to current economic conditions. The first of these contracts is estimated to be completed by December 2009. The majority of the remaining phase one projects are expected to be bid on in June or July 2009.

Recovery Act Requirements for Highway Infrastructure Spending

The Recovery Act includes a number of specific requirements for highway infrastructure spending. First, states are required to ensure that 50 percent of apportioned Recovery Act funds are obligated within 120 days of apportionment (before June 30, 2009) and that the remaining apportioned funds are obligated within 1 year. The 50 percent rule applies only to funds apportioned to the state and not to the 30 percent of funds required by the Recovery Act to be suballocated, primarily based on population, for metropolitan, regional, and local use. The Secretary of Transportation is to withdraw and redistribute to other states any amount that is not obligated within these time frames. As of June 25, 2009, 59 percent of the $652 million that is subject to the 50 percent rule for the 120-day redistribution had been obligated.

Second, the Recovery Act requires states to give priority to projects that can be completed within 3 years and projects located in “economically distressed areas.” Economically distressed areas are defined by the Public Works and Economic Development Act of 1965, as amended.15 As shown in figure 3, the Georgia Department of Transportation considered a number of different factors when selecting its first phase of projects in order to ensure that it met the act’s requirements.

Specifically, the department considered whether projects were “shovel ready” and could becompleted within 3 years. Of the Recovery Act projects selected tothe department expects all but one to be completed by February 2012. TGeorgia Department of Transportation also took into account the location of the potential projects—that is, whether they were in an economically distressed area, as identified by FHWA. Its goal was for 50 percent of the projects it selected to be located in these areas. Of the 138 projects selected during phase one, 77 (or about 56 percent) are located in economically distressed areas.

Third, the Recovery Act required the governor of each state to certify that the state would maintain the level of spending for the types of transportation projects funded by the Recovery Act at the level planned the day the Recovery Act was enacted. As part of this “maintenance of effort” certification, the governor is required to identify the amount of funds the state planned to expend from state sources as of February 17, 2009, for the period beginning on that date and extending through September 30, 2010.16 On March 18, 2009, Georgia submitted its maintenance-of-effort certification. As we reported in April, Georgia was one of several states that qualified its certification, prompting the U.S. Department of Transportation to review these certifications to determine if they were consistent with the law.17 On April 22, 2009, the Secretary of Transportation informed states that conditional and explanatory certifications were not permitted, provided additional guidance, and gave states the option of amending their certifications by May 22, 2009. Georgia resubmitted its certification on May 20, 2009. In addition to deleting the conditional statement, the Georgia Department of Transportation recalculated its maintenance of effort based on April guidance from FHWA.18 According to U.S. Department of Transportation officials, the department is reviewing Georgia’s resubmitted certification letter and has concluded that the form of the certification is consistent with the additional guidance. The U.S. Department of Transportation is currently evaluating whether the states’ method of calculating the amounts they planned to expend for the covered programs is in compliance with its guidance.

Georgia Has Started Expending Recovery Act Funds for Education

The Recovery Act makes funds available for education under three different programs. The first program—the State Fiscal Stabilization Fund—provides funding for education, as well as public safety and other government services. The other two programs provide funding to improve the academic achievements of disadvantaged youth and for special education. Georgia has begun using these funds to retain instructors at all levels and is making plans to provide additional services to disadvantaged youth and disabled students.

State Fiscal Stabilization Funds

The Recovery Act created a State Fiscal Stabilization Fund (SFSF) to be administered by the U.S. Department of Education (Education). The SFSF provides funds to states to help avoid reductions in education and other essential public services. The initial award of SFSF funding requires each state to submit an application to Education that provides several assurances. These include assurances that the state will meet maintenance-of-effort requirements (or it will be able to comply with waiver provisions) and that it will implement strategies to meet certain educational requirements, including increasing teacher effectiveness, addressing inequities in the distribution of highly qualified teachers, and improving the quality of state academic standards and assessments.

Further, the state applications must contain baseline data that demonstrate the state’s current status in each of the assurances. States must allocate 81.8 percent of their SFSF funds to support education (education stabilization funds) and must use the remaining 18.2 percent for public safety and other government services, which may include education (government services funds). After maintaining state support for education at fiscal year 2006 levels, states must use education stabilization funds to restore state funding to the greater of fiscal year 2008 or 2009 levels for state support to school districts or public Institutions of Higher Education (IHE). When distributing these funds to school districts, states must use their primary education funding formula but maintain discretion in how funds are allocated to public IHEs. In general, school districts maintain broad discretion in how they can use stabilization funds, but states have some ability to direct IHEs in how to use these funds.

Georgia has received its entire $1 billion initial allocation for SFSF. Of that amount, $845 million is for education stabilization and $188 million is for government services. Based on the state’s current application (which was approved in May 2009), the state will allocate approximately 74 percent of the education stabilization funds to local education agencies (LEA) and approximately 26 percent to IHEs. As of June 10, 2009, the state had made $177 million available to LEAs and IHEs, and the LEAs and IHEs had expended the entire amount. The state’s application provided assurance that the state will maintain state support for education at least at fiscal year 2006 levels.

As previously mentioned, the state used $177 million in education stabilization funds and $12 million in government services funds to help offset budget shortfalls at the end of fiscal year 2009. As of June 10, 2009, all $189 million had been expended. The state’s budget for fiscal year 2010 includes $521 million in education stabilization funds and $140 million in government services funds. Georgia plans to use the government services funds to help maintain safe staffing levels at state prisons, appropriately staff the state’s forensic laboratory system, and avoid cuts in the number of state troopers.

The Georgia Department of Education received $413 million in education stabilization funds for fiscal year 2010. The department utilized the state’s primary funding formula for elementary and secondary education to determine allocations of funds for the LEAs in the state and suggested that the funds be used for personnel, teachers, and benefits.19 In order to receive these funds, LEAs must submit an application via the state’s consolidated application that includes planned uses for the funds in fiscal year 2010, detailed budget data such as jobs created and saved, and program-specific assurances such as agreeing to track and account for education stabilization funds separately and to avoid prohibited uses of the funds (for example, payment of maintenance costs and restoring or supplementing a “rainy day” fund).20 The Georgia Department of Education has not set a specific deadline for these applications, and LEAs whose applications are approved must then submit a detailed budget. As of June 8, 2009, 106 of the 186 LEAs in the state had successfully submitted applications and were developing their budgets; however, no budgets had been approved.

GAO Links – July Report

Recovery Act: States’ and Localities’ Current and Planned Uses of Funds While Facing Fiscal Stresses
Summary (HTML)   Highlights Page (PDF)   Full Report (PDF, 167 pages)   <!–Accessible Text–>
Recovery Act: States’ and Localities’ Current and Planned Uses of Funds While Facing Fiscal Stresses (Appendixes)
Summary (HTML)   Full Report (PDF, 736 pages)

Georgia Links



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