The Democrats Are Evil But Smart, While The Republicans Are Neanderthals And Dumb

 By Timothy D. Naegele[1]

The title of this article is the conclusion that I reached when I was leaving the U.S. Senate, after having worked with both American political parties for years.[2]  As I wrote several months after this blog began in December of 2009:

Politically, I am an Independent, and have been for several decades, since leaving the U.S. Senate where I witnessed firsthand the shortcomings of both major political parties. I was a member of the National Democratic Club and the National Republican Club of Capitol Hill, simultaneously. I felt it was good business to entertain our clients and others at whichever club they preferred, and I felt comfortable at both of them. In fact, when I worked in the Senate, there was a spirit of bipartisanship and congeniality in both the Senate and House, which I believed was healthy and beneficial for the country.[3]

Many in the GOP are pathetically weak and spineless today.  Some are “RINOS,” or “Republicans In Name Only,”[4] like the despicable Paul Ryan and his running mate, the carpetbagger Mitt Romney.[5]  Lots of us voted for them, inter alia, because the alternative was the racist, anti-Semite Barack Obama.[6]  Many more of us have been Trump supporters from the beginning; and we have watched the treasonous pattern of misconduct unfolding, perpetrated by Obama and others—like peeling skins off an onion, one by one.[7]

Our great nation is at a critical juncture in its history, and seems poised on the edge of its second Civil War.[8]  And there are threats from adversaries globally, who may seek to destroy our great nation and kill most Americans.  No, these are not radical or crazy statements or fantasies:

Launched from a barge off the U.S. coast, an EMP attack consisting of one nuclear warhead attached to a single missile might shut down much of the country and kill all except 30 million Americans. Such an attack has been described as “a ‘giant continental time machine’ that would move us back more than a century in technology to the late 1800s”—and effectively destroy our great nation.[9]

I never realized fully how much President Donald Trump is hated until I attended a college reunion recently, where the lovely wife of a dear college friend shared her feelings with me.  It was like the mood changed from cordial to “icy” within the blink of an eye, when I told her that I was a Trump supporter—and that I began as a Democrat, but would never vote for one again.

In a very real sense, Donald Trump is America’s first Independent President. Thus, he garners detractors from both ends of the political spectrum (e.g., “Trump derangement syndrome”).[10]  Also, people in other countries have hated American “brashness” for decades, and are repulsed by it; and then there are our adversaries and enemies.  Some detractors and their countries have been living off the United States’ financial and military largesse—or the “dole”—and do not want to have it end.

Perhaps an editorial of The New York Sun puts the future American political climate in stark relief:

The showdown that is brewing between Attorney General William Barr and the House Judiciary Committee poses enormous dangers for President Trump. It might not look that way at first blush. The feud, after all, is ostensibly over the terms under which Mr. Barr is to testify before the House about the report from the special prosecutor, Robert Mueller. It has yet to ripen into a formal impeachment proceeding.

Mr. Barr might be able to win this fight. He is merely resisting the idea that he is to be questioned not only by the honorable congresspersons but also by lawyers for the committee. It looks to us like he should never have agreed to share the Mueller report with the Congress in the first place. It’s an internal executive branch document. Even so he might be able to prevail against the House.

Particularly because of the Holder precedent. Mr. Holder is the only attorney general in history to have defied a congressional subpoena and to be found in contempt. Not just any nickel-plated civil contempt but criminal contempt of Congress. President Obama’s Justice Department balked at prosecution, and Mr. Holder walked. He claims to have been embarrassed, but he’s a free man.

Mssrs. Trump and Barr might be able to get away with that. We’re not inclined to draw a lot of distinctions between the goose and the gander. If what’s going on in the House ripens into an impeachment investigation, though, all bets are off. That’s because of distinctions that have been drawn in our republic all the way back to Presidents George Washington and James Polk.

Both Washington and Polk acknowledged that once an impeachment process is started, the House becomes essentially irresistible. A study in 2001 by the Congressional Research Service recalls the fight over the Jay Treaty that President Washington struck with Britain. Washington denied the House access to his papers, saying they could be legitimately requested only in a case of impeachment.

President Polk, CRS reported, went further. He said that in an impeachment, “the power of the House” would “penetrate into the most secret recesses of the Executive Department. It could command the attendance of any and every agent of the Government, and compel them to produce all papers, public or private, official or unofficial, and to testify on oath to all facts within their knowledge.”

Plus, too, mark this: Refusal to comply with a subpoena is charge that was laid against President Nixon in the third of the articles of impeachment voted out by the Judiciary Committee in 1974. Article Three charged that Nixon had “failed without lawful cause or excuse to produce papers and things as directed by duly authorized subpoenas issued by the Committee on the Judiciary.”

In the case of Nixon, the House never sent articles of impeachment to the Senate. Instead, Republicans in the Senate panicked and sent a delegation to the White House to tell Nixon they were going to vote against him. It was a shocking default by weak senators. It would be as if jurors, acting before charges were handed up, told the suspect to plead guilty. It did, though, precipitate Nixon’s resignation.

We’re not suggesting Mr. Trump should be impeached. He has been cleared of the underlying charge of colluding with the Russ camarilla. The obstruction being investigated is, at best, ambiguous. That doesn’t mean, though, that the president is out of danger. Once the House moves to a formal impeachment proceeding, the constitutional afterburners kick in and Mr. Trump could easily be bound over to a trial in the Senate.[11]

Regardless of exactly how future events unfold, having lived through Watergate—beginning just before, and culminating after I left the U.S. Senate—the human toll and national tragedy that might befall Americans and our great nation again cannot be minimized, underestimated or appreciated fully.  And yes, our enemies globally are salivating.

This was all unleashed by Barack Obama, Robert Mueller and others, who must pay the ultimate price for their treasonous conduct.  Unless and until this happens, no American should believe in our legal system—or that justice exists in the United States—ever again.[12]

 

 

© 2019, Timothy D. Naegele

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[1]  Timothy D. Naegele was counsel to the United States Senate’s Committee on Banking, Housing, and Urban Affairs, and chief of staff to Presidential Medal of Freedom and Congressional Gold Medal recipient and former U.S. Senator Edward W. Brooke (R-Mass). He and his firm, Timothy D. Naegele & Associates, specialize in Banking and Financial Institutions Law, Internet Law, Litigation and other matters (see www.naegele.com and Timothy D. Naegele Resume-19-4-29). He has an undergraduate degree in economics from the University of California, Los Angeles (UCLA), as well as two law degrees from the School of Law (Boalt Hall), University of California, Berkeley, and from Georgetown University. He served as a Captain in the U.S. Army, assigned to the Defense Intelligence Agency at the Pentagon, where he received the Joint Service Commendation Medal (see, e.g., https://en.wikipedia.org/wiki/Commendation_Medal#Joint_Service). Mr. Naegele is an Independent politically; and he is listed in Who’s Who in America, Who’s Who in American Law, and Who’s Who in Finance and Business. He has written extensively over the years (see, e.g., www.naegele.com/whats_new.html#articles), and can be contacted directly at tdnaegele.associates@gmail.com

[2]  See, e.g., https://naegeleblog.wordpress.com/2019/02/06/the-state-of-our-union-2019/#comment-16133 (“The Real Scandal Of The Trump Presidency Unravels”) and https://naegeleblog.wordpress.com/2017/10/20/the-real-russian-conspiracy-barack-obama-the-clintons-and-the-sale-of-americas-uranium-to-russias-killer-putin/ (“The Real Russian Conspiracy: Barack Obama, The Clintons, And The Sale Of America’s Uranium To Russia’s Killer Putin“) and https://naegeleblog.wordpress.com/2018/05/24/should-barack-obama-be-executed-for-treason/ (“Should Barack Obama Be Executed For Treason?“)

[3]  See https://naegeleblog.wordpress.com/about/#comment-861 (“What Is This Blog All About?”)

[4]  See https://en.wikipedia.org/wiki/Republican_In_Name_Only (“Republican In Name Only”)

[5]  Romney was Massachusetts’ governor.  Then he switched, and became Utah’s U.S. Senator.

See, e.g., https://naegeleblog.wordpress.com/2019/02/06/the-state-of-our-union-2019/#comment-16193 (“Republican Neanderthals”) and https://naegeleblog.wordpress.com/2018/07/29/it-is-time-for-trump-supporters-to-fight-back/#comment-15494 (“Paul Ryan: The GOP’s Devil Incarnate”)

[6]  See, e.g., https://naegeleblog.wordpress.com/2009/12/05/is-barack-obama-a-racist/ (“Is Barack Obama A Racist?”) (see also the extensive comments beneath the article) and https://naegeleblog.wordpress.com/2018/05/24/should-barack-obama-be-executed-for-treason/ (“Should Barack Obama Be Executed For Treason?”) and https://naegeleblog.wordpress.com/2014/01/06/ariel-sharon-is-missed/#comment-12626 (“DEMOCRATS ARE ANTI-SEMITES”)

[7]  See, e.g., https://naegeleblog.wordpress.com/2015/12/11/boycott-the-gop-and-ignore-foreign-naysayers/ (“Boycott The GOP And Ignore Foreign Naysayers“) and https://naegeleblog.wordpress.com/2017/01/04/the-president-and-first-lady/ (“The President And First Lady“) and https://naegeleblog.wordpress.com/2017/05/16/americas-newest-civil-war-2017-and-beyond/ (“America’s Newest Civil War: 2017 And Beyond“) and https://naegeleblog.wordpress.com/2017/10/20/the-real-russian-conspiracy-barack-obama-the-clintons-and-the-sale-of-americas-uranium-to-russias-killer-putin/ (“The Real Russian Conspiracy: Barack Obama, The Clintons, And The Sale Of America’s Uranium To Russia’s Killer Putin“) and https://naegeleblog.wordpress.com/2018/03/11/robert-mueller-should-be-executed-for-treason/ (“Robert Mueller Should Be Executed For Treason“) and https://naegeleblog.wordpress.com/2018/05/06/what-atrocities-did-robert-mueller-commit-in-vietnam/ (“What Atrocities Did Robert Mueller Commit In Vietnam?“) and https://naegeleblog.wordpress.com/2018/05/24/should-barack-obama-be-executed-for-treason/ (“Should Barack Obama Be Executed For Treason?“) and https://naegeleblog.wordpress.com/2018/06/15/the-department-of-injustices-inspector-general-is-complicit-in-the-deep-state-cover-up/ (“The Department Of Injustice’s Inspector General Is Complicit In The Deep-State Cover-Up!“) and https://naegeleblog.wordpress.com/2018/07/20/the-american-lefts-feeding-frenzy/ (“The American Left’s Feeding Frenzy“) and https://naegeleblog.wordpress.com/2018/07/29/it-is-time-for-trump-supporters-to-fight-back/ (“It Is Time For Trump Supporters To Fight Back“) and https://naegeleblog.wordpress.com/2018/09/17/has-jeff-sessions-harmed-america-irreparably/ (“Has Jeff Sessions Harmed America Irreparably?“)

[8]  See, e.g., https://naegeleblog.wordpress.com/2017/05/16/americas-newest-civil-war-2017-and-beyond/#comment-17018 (“The Second American Civil War”)

[9]  See https://naegeleblog.wordpress.com/2010/01/19/emp-attack-only-30-million-americans-survive/ (“EMP Attack: Only 30 Million Americans Survive”) (footnote omitted); see also https://naegeleblog.wordpress.com/2019/04/18/the-mueller-report-a-monumental-travesty/#comment-16961 (“Media Madness Is Crippling America”) and https://naegeleblog.wordpress.com/2019/03/24/the-mueller-witch-hunt-is-over/#comment-16628 (“White House Warns of Nation-Ending EMP Attacks On USA”) and https://naegeleblog.wordpress.com/2010/12/22/the-next-major-war-korea-again/#comment-16203 (“While The Democrats Seek To Destroy President Trump, He Tries To End The Threat To Americans Of A North Korean Nuclear Holocaust”) and https://naegeleblog.wordpress.com/2010/01/19/emp-attack-only-30-million-americans-survive/#comment-15839 (“Will The United States And Israel Cease To Exist?”) and https://naegeleblog.wordpress.com/2010/01/19/emp-attack-only-30-million-americans-survive/#comment-15354 (“Military Warns EMP Attack Could Wipe Out America, Democracy, World Order”) and https://naegeleblog.wordpress.com/2015/11/29/the-death-of-putin-and-russia-the-final-chapter-of-the-cold-war/#comment-14472 (“America’s Politicians Fret Over Russia And Our Elections, Instead Of Real Threats To Our Power Grid”) and https://naegeleblog.wordpress.com/2010/01/19/emp-attack-only-30-million-americans-survive/#comment-12535 (“North Korea Won The Battle Against America’s EMP Commission”) and https://naegeleblog.wordpress.com/2010/01/19/emp-attack-only-30-million-americans-survive/#comment-11760 (“We Must Move NOW To Protect America’s Power Grid From A Nation-Ending EMP Attack!”) and https://naegeleblog.wordpress.com/2010/12/22/the-next-major-war-korea-again/#comment-10807 (“South Korean Banks Brace For EMP Attack”)

[10]  See, e.g., https://en.wikipedia.org/wiki/Trump_derangement_syndrome (“Trump derangement syndrome”)

[11]  See https://www.nysun.com/editorials/trump-is-entering-the-danger-zone/90664/ (“Trump Is Entering the Danger Zone”)

[12]  See, e.g., https://naegeleblog.wordpress.com/2019/04/18/the-mueller-report-a-monumental-travesty/ (“The Mueller Report: A Monumental Travesty”)

The Mueller Report: A Monumental Travesty

 By Timothy D. Naegele[1]

The Mueller Report has been released, and it can be downloaded and read here: Mueller Report-19-4-18[2]

Every American should be up in arms that Robert Mueller was appointed as Special Counsel in the first place.  There is every reason to believe that he has committed multiple crimes, including treason.  He should have been prosecuted, not put in charge of a “witch hunt” to destroy the presidency of Donald Trump.[3]

His fellow co-conspirators include but are not limited to the following high-ranking officials of the U.S. government, each of whom should be prosecuted for their many crimes:

Barack Obama; former Secretary of State Hillary Clinton and former President Bill Clinton; former Attorneys General Eric Holder and Loretta Lynch; Deputy Attorney General Rod Rosenstein and former Deputy AG Sally Yates; former FBI Director James Comey; former Director of National Intelligence James Clapper; former CIA Director John Brennan; former National Security Advisor Susan Rice; former Deputy FBI Director Andrew McCabe; Senior Advisor to Obama, Valerie Jarrett; and DOJ/FBI current or former employees such as Peter Strzok, Lisa Page and Andrew Weissmann.[4]

It is worth repeating:

The Mueller witch hunt has been a travesty from the very beginning.  All persons involved with this costly and traitorous undertaking—including the concerted efforts to destroy the candidacy and presidency of Donald Trump—must be subjected to the maximum punishments authorized by American law, so this never happens again in U.S. history.

Nothing less will suffice.

Indeed, until this happens, no American should believe in our legal system—or that justice exists in the United States—ever again.[5]

What has happened, and continues to happen, amounts to the greatest scandal in American history.

© 2019, Timothy D. Naegele

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[1]  Timothy D. Naegele was counsel to the United States Senate’s Committee on Banking, Housing, and Urban Affairs, and chief of staff to Presidential Medal of Freedom and Congressional Gold Medal recipient and former U.S. Senator Edward W. Brooke (R-Mass). He and his firm, Timothy D. Naegele & Associates, specialize in Banking and Financial Institutions Law, Internet Law, Litigation and other matters (see www.naegele.com and Timothy D. Naegele Resume). He has an undergraduate degree in economics from the University of California, Los Angeles (UCLA), as well as two law degrees from the School of Law (Boalt Hall), University of California, Berkeley, and from Georgetown University. He served as a Captain in the U.S. Army, assigned to the Defense Intelligence Agency at the Pentagon, where he received the Joint Service Commendation Medal (see, e.g., https://en.wikipedia.org/wiki/Commendation_Medal#Joint_Service). Mr. Naegele is an Independent politically; and he is listed in Who’s Who in America, Who’s Who in American Law, and Who’s Who in Finance and Business. He has written extensively over the years (see, e.g., www.naegele.com/whats_new.html#articles), and can be contacted directly at tdnaegele.associates@gmail.com

[2]  The report comes in two parts, Volumes I and II.  Volume II begins on page 208 of the 448 pages—which can be downloaded for free by clicking on the link to the left of this footnote number in the text of this article, or by clicking here: Mueller Report-19-4-18

See also https://www.justice.gov/sco (“Special Counsel’s Office, The United States Department of Justice”)

[3]  See, e.g., https://naegeleblog.wordpress.com/2018/03/11/robert-mueller-should-be-executed-for-treason/ (“Robert Mueller Should Be Executed For Treason”) and https://naegeleblog.wordpress.com/2018/05/06/what-atrocities-did-robert-mueller-commit-in-vietnam/ (“What Atrocities Did Robert Mueller Commit In Vietnam?”)

[4]  See https://naegeleblog.wordpress.com/2018/03/11/robert-mueller-should-be-executed-for-treason/#comment-16041 (“Robert Mueller Is A Traitor Who Must Receive The Most Severe Punishment Possible Under American Laws”)

[5]  See https://naegeleblog.wordpress.com/2019/03/24/the-mueller-witch-hunt-is-over/ (“The Mueller Witch Hunt Is Over”); see also https://naegeleblog.wordpress.com/2018/06/15/the-department-of-injustices-inspector-general-is-complicit-in-the-deep-state-cover-up/ (“The Department Of Injustice’s Inspector General Is Complicit In The Deep-State Cover-Up!”) and https://naegeleblog.wordpress.com/2018/05/24/should-barack-obama-be-executed-for-treason/ (“Should Barack Obama Be Executed For Treason?”) and https://naegeleblog.wordpress.com/2018/05/06/what-atrocities-did-robert-mueller-commit-in-vietnam/ (“What Atrocities Did Robert Mueller Commit In Vietnam?”) and https://naegeleblog.wordpress.com/2018/03/11/robert-mueller-should-be-executed-for-treason/ (“Robert Mueller Should Be Executed For Treason”) and https://naegeleblog.wordpress.com/2017/10/20/the-real-russian-conspiracy-barack-obama-the-clintons-and-the-sale-of-americas-uranium-to-russias-killer-putin/ (“The Real Russian Conspiracy: Barack Obama, The Clintons, And The Sale Of America’s Uranium To Russia’s Killer Putin”) and https://naegeleblog.wordpress.com/2013/07/15/justice-and-the-law-do-not-mix/ (“Justice And The Law Do Not Mix”)

Some of the Special Counsel’s expenditures are set forth as follows: Statement of Expenditures May 17, 2017 through September 30, 2017; Statement of Expenditures October 1, 2017 through March 31, 2018; and Statement of Expenditures April 1, 2018 to September 30, 2018

They total $12,287,852.00 at a minimum.  But see https://naegeleblog.wordpress.com/2019/04/18/the-mueller-report-a-monumental-travesty/#comment-16935 (“A 2-year, $35 Million Witch Hunt Ends”)

Of course, this does not include any investigation of the real Russian conspiracy involving Barack Obama, the Clintons and the sale of 20 percent of America’s vital Uranium assets to Russia’s killer Putin—which occurred when Robert Mueller was the FBI Director—or the countless other crimes committed by the co-conspirators.

A New Catholic Manifesto?

 By Timothy D. Naegele[1]

A recent survey found that there are as many Americans who claim no religion, as there are evangelicals and Catholics:

For the first time “No Religion” has topped a survey of Americans’ religious identity. . . . The non-religious edged out Catholics and evangelicals. . . .[2]

Also, it has been noted that “a growing number of Americans reject organized religion,” and that “‘No Religion’ will be the largest group outright in four to six years.”[3]  These conclusions do not surprise many if not most “believers”—which is the path less traveled.

Some of us “experienced” God at one time or another in our lives[4]; and without that, it is likely that we too would not only reject organized religion, but any belief in a “Higher Power” altogether.  We might look at the cruelties, injustices and sadness in Life, and wonder how a loving God could allow this.  It seems to fly in the face of logic and rational belief systems.[5]

Indeed, to “push” our belief systems on others, or even to mention the life-changing moment we experienced, seems arrogant and pious.  Each and every human being, or animal, is a child of God . . . or so many of us believe.  We are not special because of what happened to us, but we were privileged—and yes, blessed—to have it happen.  With that comes a sense of responsibility, to help others.

Often, evangelicals proselytize, quite vigorously, which turns off others.  If the “targets” were willing to be open-minded, having religion “shoved down their throats” can be threatening and repulsive.  However well-intentioned such evangelicals may be, they can have the opposite effect, of turning away the “candidate” from any religion, which is human nature.  Each of us is on a unique path to God, or so I believe, which is not shared by anyone else.

We fall, and get up again and move on.  We are not heroes or saints or anything else except another human being.  We are no more or less than our fellow human beings.  Each day we seem to struggle with our beliefs and faith.  As I have written:

I had essentially a “near-death” experience some years ago, similar to what others have described, during which I experienced God . . . as an intense bright light at the end of a tunnel, and as Infinite Intelligence of which our own intelligence is merely a part. God was neither masculine nor feminine. My mother had died months before it happened, and I felt her presence and I knew she was with God.

From that moment forward, I have never doubted that God exists, or that God created everything—heaven and earth and everything in between. However, I continually seek to understand how God operates in my life, on a day-to-day basis. The closest I have come is my belief that God acts through us as faith, inspiration, prayer, miracles, and perhaps most of all, love. I believe that in expressing love, each of us is God in expression.[6]

Christianity is the largest religion in the world today[7]; and the Catholic Church, or the “Mother Church,” is the largest Christian denomination.[8]  In the case of some, our ancestors have been Catholics for centuries—and at least two hundred years.  We may not be “official Catholics” today, but we are drawn to the Church for a variety of reasons.  One of the most important is the Church’s stand on abortions, and its unwavering pro-life and anti-Infanticide policies.[9]

Jesus’ teachings were simple; and they are set forth in the New Testament, for anyone to read.  Was He the Messiah and Son of God?  I believe so.  In many ways, His messages were clear: to help the poorest of poor (e.g., homeless) and the downtrodden; and not to worship material things or “creature comforts.”  We come into this world with nothing, and we leave with nothing, just like the Pharaohs or monarchs of ancient Egypt.[10]

How and where has the Catholic Church gone astray, and diverged from the teachings of Jesus?[11]  How can it be brought back “on track,” so it is true to Jesus’ teachings?  For some non-believers, there is probably nothing that the Church could do that would “redeem its sins.”  Some are determined to destroy the Church, and organized religions altogether; and seemingly, nothing will change their minds or alter their paths.

Pedophilia has ripped the Church apart around the world, and in places like Ireland where the Church used to be so strong.  What can be done about this, at least with respect to those who are “open-minded” and not bent on destruction?  First, the Church needs to “clean house,” and rid its ranks of pedophiles who prey on others, and those who engage in human trafficking and slavery.  Second, there must not be more cover-ups.  Third, I believe there should be no more vows of celibacy or chastity, which are unnatural.  Fourth, the priesthood should be open and welcoming to women.

Lastly, why should I care?  Why should I or anyone else waste time writing an article like this or trying to make changes, which may be unlikely to move the Church or its adherents one single inch?  Indeed, few people may read this article, much less be moved by it.  And some may be repulsed and/or angry about what I have written.  Yet, I want to see Jesus’ wonderful teachings flourish, and for the Catholic Church to continue to promulgate such teachings far and wide—and yes, to serve God in the process.

The Church has helped millions of human beings worldwide, and it continues to do so.  This is its future.

 

 

© 2019, Timothy D. Naegele

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[1]  Timothy D. Naegele was counsel to the United States Senate’s Committee on Banking, Housing, and Urban Affairs, and chief of staff to Presidential Medal of Freedom and Congressional Gold Medal recipient and former U.S. Senator Edward W. Brooke (R-Mass). He and his firm, Timothy D. Naegele & Associates, specialize in Banking and Financial Institutions Law, Internet Law, Litigation and other matters (see www.naegele.com and Timothy D. Naegele Resume). He has an undergraduate degree in economics from the University of California, Los Angeles (UCLA), as well as two law degrees from the School of Law (Boalt Hall), University of California, Berkeley, and from Georgetown University. He served as a Captain in the U.S. Army, assigned to the Defense Intelligence Agency at the Pentagon, where he received the Joint Service Commendation Medal (see, e.g., https://en.wikipedia.org/wiki/Commendation_Medal#Joint_Service). Mr. Naegele is an Independent politically; and he is listed in Who’s Who in America, Who’s Who in American Law, and Who’s Who in Finance and Business. He has written extensively over the years (see, e.g., www.naegele.com/whats_new.html#articles), and can be contacted directly at tdnaegele.associates@gmail.com

[2]  See https://www.cnn.com/2019/04/13/us/no-religion-largest-group-first-time-usa-trnd/index.html (“There are now as many Americans who claim no religion as there are evangelicals and Catholics, a survey finds”)

[3]  Id.

[4]  See https://naegeleblog.wordpress.com/2010/05/12/what-and-where-is-god/ (“What And Where Is God?”)

[5]  See https://naegeleblog.wordpress.com/2010/05/12/what-and-where-is-god/#comment-426 (“For A Lovely Woman Named Cynthia Whose Faith In God Will Help Her”)

[6]  See infra n.4.

[7]  See, e.g., https://en.wikipedia.org/wiki/Major_religious_groups#Largest_religious_groups (“Largest religious groups”)

[8]  See, e.g., https://en.wikipedia.org/wiki/Catholic_Church (“Catholic Church”)

[9]  See, e.g., https://en.wikipedia.org/wiki/Infanticide (“Infanticide”)

As I have written:

An abortion is a criminal act: infanticide. Each of the mothers and the doctors and others who have participated—or participate in the future—in the taking of human lives should be arrested, tried, convicted and . . .

Abortion is the taking of a life!

. . .

IF any exceptions are to be made, they should only occur in the case of rape, incest or where the life of the mother is at risk.

See https://naegeleblog.wordpress.com/2012/12/20/abortions-and-autos-kill-more-in-america-than-guns/#comment-3298 (“55 Million American Babies Killed Since Roe v. Wade“)

[10]  See, e.g., https://en.wikipedia.org/wiki/Pharaoh (“Pharaoh”)

[11]  See, e.g., https://naegeleblog.wordpress.com/2010/04/05/the-catholic-church-at-a-crossroads/ (“The Catholic Church At A Crossroads”)

 

Standby Letters of Credit And Other Bank Guaranties: Revisited

 By Timothy D. Naegele[1]

The United States has experienced periods of boom and bust since its rich history began.  Such is the basic nature of economic cycles, and of our capitalist system that governs global economic activity.  Like the laws of gravity, certainties exist in economics too.  What goes up, comes down—sometimes with a resounding thud.

When crises arise, as they will, public policymakers in America and other countries must be prepared to deal with them in a responsible and effective manner, and have tools at their disposal to do so.  One area of economic activity that few Americans know about, much less comprehend, involves the staggering amounts and extensive uses of guaranties—issued globally by banks, other financial institutions, businesses, governmental agencies[2], and individuals themselves.

According to the latest figures published by the Fed, the aggregate amount of “Financial standby letters of credit and foreign office guarantees” in the fourth quarter of 2018 stood at more than a half-trillion dollars—$566.8 billion, to be exact—which seems exceptionally low.[3]  My newest law review article deals with standby letters of credit and other bank guaranties, and with their counterparts in other areas of domestic and international commerce.[4]

The article builds on an earlier discussion of such issues, before the U.S. Senate more than 40 years ago.[5]  Since then, crises have come and gone; and the issue today is what public policymakers have learned in the interim about how to anticipate and address them.  As I have written:

Guaranties have been used in commercial transactions for centuries, in various contexts and in various parts of the world.  Banks have not been alone in their willingness to engage in such undertakings, and have sought new methods of characterizing guaranty transactions in recent years, in an effort to circumvent legal bars as to these practices.

. . .

A guaranty is a promise by one party to answer for the payment of some debt, or the performance of some obligation, in case of the default of another party, who is in the first instance liable for such payment or performance.  A standby letter of credit is merely one form of a guaranty which has been subject to increased usage by banks in this country during recent years.  There are a variety of reasons why the use of standby letters of credit has increased.  The primary reason from a legal standpoint is that our courts have held that national banks are not permitted to guarantee the obligations of another party.

The national banks involved have been imaginative enough, in responding to this situation, to fashion an instrument which they contend is not an illegal guaranty but is akin to a traditional letter of credit, as a means of avoiding any legal or regulatory constraints. . . .

[T]he standby letter of credit is a means by which a bank permits its customer to make use of the bank’s credit standing and goodwill in the customer’s business.  . . .  [T]he bank is in effect “selling off” its credit to others. . . .

. . .

Quite obviously, instead of “lending” its credit[] in certain transactions, the bank itself could provide funds directly to its customer.  At the time the customer seeks such funds, however, the bank may not . . . wish to lend such monies.

. . .

[T]he use of such instruments abroad has been sanctioned owing to the fact that the laws of several countries authorize banking institutions chartered thereunder to engage in such undertakings.  Accordingly, it has been determined that American banks would be at a severe competitive disadvantage if their foreign counterparts were permitted to guarantee certain transactions, while American banks competing for the same business were prohibited from doing so.  It is questionable, however, whether there has ever been a conscious assessment of the risks which attend foreign transactions of this nature vis-a-vis the benefits derived therefrom.

. . .

Banks are special institutions subject to rules designed to assure their soundness for the benefit of depositors and to maintain public confidence in the banking system.  The potential bank liability on a standby letter of credit, and consequent risk of loss to the depositors and shareholders of the bank, is just as real as if the transaction had been a typical lending transaction by the bank.

. . .

It is appropriate to focus on the use of guaranties in the standby letter of credit context because banks are reluctant to disclose fully or describe the various types of guaranty transactions, and because it presents a useful illustration of a high risk situation once one is able to cut through the complexities of the transactions involved.

. . .

A fee of from one-quarter of one percent to one percent, or as much as $1 million on a $100 million standby letter of credit financing, is collected by the bank for its services; and the bank is not required to commit any funds of its own, unless a default occurs.[6]

No one should deny the opportunity for U.S. banks and other financial institutions to make a profit and serve their customers, as long as they act responsibly and legally, and their solvency and stability are not put at risk.  However, aggregating more than a half-trillion dollars today on the part of American banks and other financial institutions alone, standby letters of credit and other bank guaranties present enormous potential risks to the U.S. and global economies.

 

 

© 2019, Timothy D. Naegele

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[1]  Timothy D. Naegele was counsel to the United States Senate’s Committee on Banking, Housing, and Urban Affairs, and chief of staff to Presidential Medal of Freedom and Congressional Gold Medal recipient and former U.S. Senator Edward W. Brooke (R-Mass). He and his firm, Timothy D. Naegele & Associates, specialize in Banking and Financial Institutions Law, Internet Law, Litigation and other matters (see www.naegele.com and Timothy D. Naegele Resume). He has an undergraduate degree in economics from the University of California, Los Angeles (UCLA), as well as two law degrees from the School of Law (Boalt Hall), University of California, Berkeley, and from Georgetown University. He served as a Captain in the U.S. Army, assigned to the Defense Intelligence Agency at the Pentagon, where he received the Joint Service Commendation Medal (see, e.g., https://en.wikipedia.org/wiki/Commendation_Medal#Joint_Service). Mr. Naegele is an Independent politically; and he is listed in Who’s Who in America, Who’s Who in American Law, and Who’s Who in Finance and Business. He has written extensively over the years (see, e.g., www.naegele.com/whats_new.html#articles), and can be contacted directly at tdnaegele.associates@gmail.com

[2]  For example, in a lawsuit where a judgment of more than $4 million was rendered against a bank, the bank’s federal regulator was permitted to issue a letter of credit (or guaranty) on behalf of the bank, which allowed it to appeal the verdict.

See Timothy D. Naegele, The Bank Holding Company Act’s Anti-Tying Provision: Almost 50 Years Later—Part I, 135 BANKING L. J. 315, 336-338 (June 2018) (Naegele 2018, Part I) [Timothy D. Naegele-Part I] (discussing Lucken et al. v. Heritage Bank National Association et al., U.S. District Court for the Northern District of Iowa, Case # 5:16-cv-04005, PACER Docket Sheet entry 197, paragraphs 6-8 (“Pursuant to Federal Rule of Civil Procedure 62(d), if an appeal is taken, the appellant may obtain a stay by supersedeas bond.  . . . Defendants have obtained . . . a Letter of Credit in favor of Plaintiffs for an aggregate amount not to exceed $5,000,000.00, available through Federal Home Loan Bank of Des Moines, Des Moines, Iowa.  . . . In addition, Plaintiffs and Defendants have executed an agreement setting forth the events of default which would trigger calling upon the letter of credit”)) [PACER Docket Sheet entry 197]; see also https://naegeleblog.wordpress.com/2018/08/25/the-bank-holding-company-acts-anti-tying-provision-almost-50-years-later/ (“The Bank Holding Company Act’s Anti-Tying Provision: Almost 50 Years Later”)

[3]  See off-balance-sheet-items

[4]  See Timothy D. Naegele Standby Letters of Credit

[5]  See Timothy D. Naegele, Standby Letters of Credit And Other Bank Guaranties, Compendium Of Major Issues In Bank Regulation, Committee On Banking, Housing And Urban Affairs, United States Senate 621 (May 1975) [Naegele-Standby Letters of Credit And Other Bank Guaranties].

This Senate submission and its attachments constitute a useful starting point for the discussion of this subject, and they will be referred to throughout this article.  The author respectfully suggests that it might be useful for the reader to review them.

[6]  See id. at 626-629, 633, 634, 635.