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2025-02-09 07:00 by Karl Denninger
in 47 , 359 references
[Comments enabled]  

So having now read the entire complaint from yesterday (which managed to get read, processed by a judge, and a TRO issued in less than 24 hours), ex-parte no less, and totaling 60 pages of pleading I have to say that this is one of the biggest steaming loads of bull**** I've ever seen -- and I've seen some big ones.

I deleted a couple of tweets because from the Internet it appeared the complaint relied on the principle of Parens Patrie which was an instant smack-down with a long history and current history as recent as 2023 with student loans.  That was incorrect, thus so were the conclusions.

Instead what we have here is worse, if that can be believed.

There are no allegations of imminent and irreparable injury as statements of fact.  There are plenty of bald claims but no direct statements of injury either already occurring or imminently about to as presentments of fact.  That alone is a problem because an injunction, say much less a TRO, requires this: Actual and irreparable injury that is occurring or imminently will.  Speculation cannot form the basis for an injunction -- you need imminent actual injury (and for a TRO you must add to it emergency status in that giving the other party the opportunity to be heard first will either result in the injury occurring or irrevocable destruction of evidence required to prove up your claims.)

The closest we get here is a claimed violation of the APA (Administrative Procedures Act) but even that is speculative at best.  The rest is risible nonsense and further the stated purpose of DOGE, and what I've seen in tweets and public statements from Trump and others, is that the intent is to identify fraud and abuse which, to the extent it exists, is the precise and polar opposite of the spending clause with regards to Constitutional appropriations.  Quite obviously that which is stolen was not appropriated.

As to the allegation that DOGE is somehow ultra vires compounded with the direct allegation that it is blocking legitimate (appropriated, and submitted in accordance with such appropriation) payments (without any evidence thereof) that is arguably a direct and thus sanctionable lie.  First, DOGE is not some "new thing"; it is simply the latest version of a part of the executive set up under President Obama -- and which was so-executed under well-founded, argued and reviewed grounds.  No evidence has been presented that a single payment has been altered or blocked by the team and in fact DOGE and Bessent have both asserted this is not the case.  You cannot plead that which you have no evidence for as a fact.

Count five is even more risible in that it alleges the reason for DOGE is, and I quote:

Here, the only reason that has been publicly articulated for the Agency Action is to enable the DOGE team to block payments to States and their residents of federal funds that have been appropriated by Congress.

Absolutely false.  A bogus voucher is not something that can be appropriated by Congress.  Nor can a payment to an alleged Social Security (or other "entitlement") recipient be made "as appropriated by Congress" if the person does not have a Social Security or other authorized ITIN number in the system to tie it to.  That is not a "payment"; to be a payment of federal funds it must tie directly to an appropriation by Congress; any other such disbursement is fraud.

I remind you that fraud vitiates everything.

The rest relies on the bald claim that the purpose of DOGE is to block appropriated funds.  There is no evidence for this presented and from the public record I am aware of it is absolutely false and maliciously so to make such a claim.

DOGE's stated purpose is to make recommendations for changes in appropriations and to identify fraud, waste and abuse.

Fraud is never in compliance with an appropriation under any circumstance and there is no requirement in law or anywhere else that a payment that is identified as fraudulent be processed.  Indeed the law requires it not be processed!  So to the extent DOGE identifies fraud the agency in question has not only the authority to stop such payments and claw back what it can it has the obligation to do so.

As for waste and abuse that's where policy-making comes from -- in the future tense.

Analyzing the data to determine this is inherently part of the Executive's function, and further directly under the remit of the agency established by Obama to do so, which is the precise agency Trump is using.

The complaint (and TRO) is hot garbage and in at least one aspect appears to include sanctionable false statements.

Never mind that submitting it after the close business meant that it is basically certain the plaintiffs knew who the "emergency judge" (yes, there is one in all courts) would be -- which is an outrageous abuse that standing alone should get them sanctioned.  This was an intentional bypass of the random assignment lottery system intended to deter such abuse; 60 pages (plus supplements) was not drafted in an hour and thus the so-called "emergency" was deliberately manufactured crap as well.

If these State AGs believe that they and their citizens are entitled to fraudulent payments they should have that assertion shoved up their starfish and broken off through any means available to the Administration including the bringing of criminal fraud, extortion and even Racketeering charges.

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2025-02-07 07:00 by Karl Denninger
in Interviews , 104 references
[Comments enabled]  

2025-02-05 07:00 by Karl Denninger
in 47 , 446 references
[Comments enabled]  

The number of "political figures" screaming about "DOGE" being given access to the payment flow systems (e.g. check register - the real one) at Treasury and other parts of the government is quite amusing.

I am particularly amused at the screaming about "oh those people were not Senate-approved!"

Let me explain something as a former CEOAudits are good things if you're not crooked, but disastrous if you are.  If you're crooked then you try to make sure the auditor is someone you approved and who will deliberately not look in certain places.

Ergo the last thing I want is for the Senate (or any other inside job folks) approving who does the audit if I have any reason to believe there is something crooked going on.

Anyone who believes there has been nothing crooked going on in the US Government and its payment systems is several cans short of a sixpack.

Further, in just a couple of days the "DOGE" folks have found plenty of facially-illegal and corrupt payment flows.  As with most entities there are authorized signatures required on vouchers and while I do not have inside information on the structure in US Treasury I'm quite sure that its layered as it is in all but the smallest firms.  The fact that there are persons who have never bounced a single voucher over the space of many years is, on its face, evidence of fraud.

Why?  Because nobody is ever perfect and therefore rejected vouchers are going to happen in any payment system.  That they do occur once in a while means the checks and balances are both present and working as designed.

Now exactly how much of what has been found so far is stolen? I don't know, but that a bunch of spending that no American I'm aware of knew was being spent on the places it was going is enough for me to know that in fact grift had infused these systems and structures, and to the extent any of it was outside the boundaries of the appropriations passed by Congress every dime of that was felonious.

Back when I ran MCSNet I detected what I believed was some hinky stuff in the books.  It wasn't huge, but it smelled like dead fish; certain ratios that had been stable for a long time suddenly weren't, I had made no changes in procedures or other things that could have explained it and nobody had come to me with anything proactively that would have either.  I didn't have anyone in the office undertake a review -- what you'd call in a government or public company "an audit" because I didn't know who might be involved, it might not have been true and I certainly didn't want any opportunity to stop it quietly.  I brought in an outside accountant who I knew, who had impeccable credentials as he was an enrolled agent with the IRS and he had done work for me before in ensuring that in tax matters all the "T"s were crossed and "I"s dotted -- that every penny owed was paid but no money was paid that wasn't actually owed.

The details aren't important: That I went outside the firm to someone who had no reasonable possibility of being compromised (including by me!) -- and thus I could expect an honest and unbiased opinion -- was the point.

We already know the Pentagon cannot pass even an internal audit -- because we've been told they have failed them repeatedly.

And by the way anyone who thinks an internal audit is sufficient needs to go look at FASB and the requirements to be listed as a public company: An internal audit is not sufficient, and the reason is that an internal set of investigators and accountants can trivially be compromised and frequently are compromised.

In a small firm its usually one person or sometimes two that are involved and know about it.  As the size of the entity grows that stops working because multiple people have reason to believe something's hinky even if they can't prove it and thus the number of people who are involved grows.  For example, if you have a person who you compromise in the payment system to pay every voucher then the "hinky" ones get steered to that person and multiple people know that; thus it is now not one person who is involved its a bunch because they're doing the steering.  The larger the entity and the more theft involved the larger the circle of knowledge becomes even if the exact specifics of how and what's being stolen isn't known to each and all of them -- or for that matter any of them in totality individually.

If you want to know who's been involved in doing the stealing you only need to look at who's doing the screaming.

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2025-02-04 07:00 by Karl Denninger
in 47 , 271 references
[Comments enabled]  

If he is then he must slam the door on employers' dicks.

Issue an E/O that all employers must use E-Verify.

Give all current employers 30 days to run it on all of their current employees.  Each employer already has to file a 941 quarterly to reconcile each employee with their payroll tax deposits; add one field for the E-Verify control number for each person.

If the system shows the same SSN or ITIN in more than one place send ICE to both of them to find out what's up assuming it is not facially reasonable that this is one person working two jobs.

Obviously if you see the same number coming from a bunch of places its stolen.

Go raid the workplaces.  All of them.  The one that is American?  He or she is good.  The others?  If they passed E-Verify then arrest and deport the employee -- and bar them permanently for felony identity theft along with their illegal entry.

If the E-Verify control number isn't there or its fraudulent then everyone in the executive suite of the company goes to prison for five years per employee per 8 USC 1324(a)(3) and the illegal(s) get deported.

People try to evade this using 1099s?  Nope; anyone paying people on 1099s must either (1) run E-Verify for each person they pay on a 1099 or (2) use a job shop which they identify and the job shop must E-Verify each and every person.

If the job shop cheats imprison all of their executives.

I've worked directly on a 1099 basis and also through a job shop and in both cases I had to identify myself in exactly the same way I did as a W-2 employee and prove my bona-fides.  I know the same is true today for legitimate job shops because I know people who work for them and every single one of them had to provide the expected and usual identification including a Social Security card and evidence of citizenship such as a "Real ID" driver license or Passport.

This is not complicated; you can essentially render all illegal alien employment uneconomic and impossible inside of 90 days.

Let's see if Trump means it or if this early-on stuff with Homan is all for show.

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2025-02-02 07:00 by Karl Denninger
in Podcasts , 150 references
[Comments enabled]  
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