New Haven Independent

Blumenthal accepted an invitation from Yale’s Conservative Party to address its members over Welsh rarebit and Shrimp Louis lunch inside the elite eating club’s wood-paneled second-floor library. It was a striking encounter. Surrounded by framed photos of tuxedo-clad Mory’s machers of decades past, Blumenthal was unapologetic about the role attorneys general like him and New York’s Eliot Spitzer have assumed in fighting corporate crime as the Bush administration has largely stopped enforcing securities and environmental laws. Blumenthal sought to convince his audience by wrapping his argument in conservative language and philosophical argument.

He did manage at times to set the china coffee cups and water glasses clinking on the wooden table around which his 19 rapt listeners sat. (Instead of clapping, the blazer-clad group engages in a ritual rattle of table-banging when it approves of a comment by a guest speaker.)

A Crew-Cut Marine

Blumenthal, a Democrat whom unions and other liberal Democrat interest groups had hoped would run for governor this year, even sought to present himself as a fellow conservative of sorts. He began his talk by emphasizing his conservative credentials, like graduating from boot camp at Parris Island. He called the Marines “my real education,” tougher than Harvard or Yale Law School. He spoke of coming to Yale Law School after completing boot camp, feeling out of place with his coat and tie and crew cut. He spoke of how a friend took him right here to Mory’s to convince him not to drop out of law school after the first day.

True, Blumenthal never actually joined the eating club. But, he said, “Mory’s has been an important part” of his Yale legacy.

Clink clink went the china.

Blumenthal also noted that, in the heyday of campus radicalism, he worked for the Nixon White House.

Then he got to the hard part: Why Connecticut’s attorney general should be suing brokers or polluters or tobacco companies. Nationally, conservative groups like the U.S. Chamber of Commerce have launched an offensive to “rein in” “activist attorneys general” who pose a “serious threat” to the country’s legal system.

“People ask me,” Blumenthal told his Mory’s listeners, “why are you enforcing securities laws? Isn’t that a federal responsibility?”

Yes and no, he said. Some of the country’s key antitrust and environmental laws began as state laws which remain on the books, he said. Then he chose a word once dear to the heart of America’s modern conservative movement (until it took over the U.S. Supreme Court and Congress and White House): federalism. Meaning the federal government shouldn’t step on states’ rights.

“The federal government has failed to protect people,” he said. “There’s no question state officials have become more active and have in many ways filled a vacuum. Federal officials have failed to enforce the laws they do have.”

Financial crime is bad for capitalism, Blumenthal argued. He cited an investigation his office is completing against insurance carriers and brokers who conspire to rip off customers. The brokers receive kickbacks from the insurance companies to steer customers to their policies, even if those policies aren’t the best ones for customers. The insurance companies then pass along the cost of the kickback to customers by boosting premiums. “The e-mails will absolutely astonish you” when his office releases them, Blumenthal promised.

Those ripped-off customers aren’t just everyday citizens. “UTC was one of the victims,” he said, “down to the guy who runs Toad’s right next door.” Not to mention Yale, Choate, and New Haven and two dozen other local governments. His office has already reached a $190 million and a $90 million settlement with two of the brokerage houses, he said; he said more major settlements are in the offing in coming weeks.

Blumenthal claimed that the state effort to enforce regulations on corporations is not a Democratic Party crusade; it was the Democratic Clinton White House, he noted, that turned down a request by attorneys general from across the country to sue tobacco companies. You won’t win, then-U.S. Attorney General Janet Reno told them; the tobacco companies have never paid a dime. (One $350 billion settlement later, complete with changes in tobacco industry advertising, vindicated the state AGs.)

Blumenthal invoked President Bush — the first one, not the current one — to complete his bipartisan argument. He claimed that President George H.W. Bush “fought very hard for environmental protection.” He noted that Monsanto sued that Bush administration. He noted that Bush appointed EPA chiefs (like William K. Reilly) who were considered environmentalists.

(Indeed, Republicans like Teddy Roosevelt led the original environmental movement. Blumenthal didn’t mention that the new breed of Republicans, represented by the second President Bush, come from a quite different tradition.)

Under the current President Bush, Blumenthal said, “There’s no area where the failure of the federal government has been more tragic or significant” than on the environment. The current White House is “purposely undercutting and gutting” environmental laws, he said. The same day as he spoke, a group of states filed formal comments with the EPA criticizing the agency’s revised new-source review standards for power plants, which will basically enable power plant owners who expand to burn smog- and asthma-causing nitrous oxide and sulfur dioxide more easily.

Clink, Clink, Clink

Blumenthal opened the floor to questions. There were more clink, clinks, as students thanked him for coming. Their subsequent questions, while respectful, challenged Blumenthal’s depiction of his efforts as in step with the conservative pro-corporate agenda.

One questioner, after taking an unrelated dig at labor unions, asked a long question that had something to do with globalization, job-creation, and overzealous attorneys general like Connecticut’s Blumenthal and New York’s Spitzer.

“The word in New York is you can’t litter without Eliot Spitzer doing something about it,” the questioner complained. “Where does it end?” And how, he asked, will that impact jobs that the U.S. is already losing to other nations?

Getting companies to follow the law, Blumenthal responded, has nothing to do with the flight of jobs. That has to do with the forces of globalization, he said.

“No responsible CEO will come up to you and say, ‘If only I didn’t have to comply with the law, I would have kept those jobs” here, Blumenthal remarked.

“Enforcing the law doesn’t lose job. Enforcing the law creates a level playing field in purely economic terms. If GE is permitted the break the law, GE’s engines will be cheaper than Pratt and Whitney’s. And that’s unfair.”

Another student noted the irony in a liberal northern Democrat like Blumenthal arguing on behalf of states’ rights — when, in the civil rights’ era, southern segregationists invoked states’ rights to try to stop the federal government from integrating schools and lunch counters and voting booths.

Blumenthal said he believed then, and believes now, that some tasks only the federal government can carry out. Then, it was enforcing constitutional rights for African-Americans. In today’s climate, that includes handling pandemics, national defense, or price-gouging by oil companies. He acknowledged the questioner’s point by saying, “I grew up at a time when states’ rights mean obstruction” to federal enforcement of civil rights laws. “I don’t think that’s the kind of states’ rights doctrine we want, when it means saying no to the federal government when it” acts in accordance with the constitution.

But if the states have authority to protect the public, authority not specifically given to the federal government, then they should pursue it. That’s enshrined in the 10th Amendment. Look for that amendment to play an increasingly important role in American life, especially with the new makeup of the U.S. Supreme Court, Blumenthal predicted. He was suggesting, once again, that conservatives can learn to love — or if not love, accept on their own terms — some of what this new breed of activist attorney general is up to.