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Full steam ahead for Donald Trump after Supreme Court ruling

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AN OBSCURE patch of the constitution from 1868 never looked likely to keep Donald Trump off the presidential ballot in 2024. It was not clear that the idea of turning to Section 3 of the 14th Amendment—which bars officials who engage in “insurrection or rebellion” from holding future office—would gain traction in any of the 35 states where lawsuits emerged. But litigants had a viable claim: after taking an oath to protect the constitution, the 45th president had arguably thwarted the peaceful transfer of power on January 6th 2021 and was therefore (according to Section 3) barred from recapturing the presidency. Judges and officials in Colorado, Maine and—just last week—Illinois found this reasoning persuasive.

On March 4th, a day before Colorado and 15 other states are set to vote in primaries on Super Tuesday, the Supreme Court punctured any remaining hopes that the post-civil-war provision (originally designed to keep former Confederates at bay) would stop Mr Trump’s third run for the White House.

The justices voted unanimously to reverse the Colorado Supreme Court’s ruling that disqualified Mr Trump from the state’s primary ballot. They had given strong hints in the hearing on February 8th. Justices from right to left said that states may not unilaterally erase presidential candidates from the ballot because they are purported insurrectionists.

The decision is “per-curiam” (“by the court”) with no noted author. It proceeds on the premise that the 14th Amendment was intended primarily to restrict state autonomy—an emphasis that militates against giving states latitude to remove candidates themselves. The opinion also leans heavily on Section 5 of the amendment, which assigns to Congress the “power to enforce” the amendment’s many guarantees (from the “equal protection of the laws” to the bar on unduly depriving people of “life, liberty or property”). It is fine, the court notes, for states to disqualify candidates for state office. But “with respect to federal offices, especially the presidency”, the constitution “does not affirmatively delegate such a power to the states”.

The court writes that “state-by-state resolution” of the disqualification question “would be quite unlikely to yield a uniform answer” across the country. The “patchwork” that would result “could dramatically change the behaviour of voters, parties, and states across the country”, potentially “nullify[ing] the votes of millions and chang[ing] the election result”. The constitution cannot be read to impose such “chaos” on the country.

Although the decision was unanimous, the four female justices criticised their five male colleagues for deciding more than they needed to—and foreclosing other methods of enforcing Section 3. Justice Amy Coney Barrett wrote that the case “does not require us to address the complicated question whether federal legislation is the exclusive vehicle through which Section 3 can be enforced”. For Justices Ketanji Brown Jackson, Elena Kagan and Sonia Sotomayor, the opinion could have started and ended with the proposition that empowering Colorado to remove Mr Trump from the ballot risked “a chaotic state-by-state patchwork, at odds with our nation’s federalism principles”. In their view, the five men were excessively bold, deciding “novel constitutional questions” that rope off future challenges under Section 3.

The majority went further than necessary, the court’s three liberal justices charged, “creat[ing] a special rule for the insurrection disability in Section 3” that does not apply to any other provision of the 14th Amendment. There is “next to no support” for the proposition that Congress must pass a statute to enforce Section 3, the opinion continues. By overreaching, the court in effect “insulate[s] all alleged insurrectionists from future challenges to their holding federal office” and “shuts the door on other potential means of federal enforcement”—in a federal court, say, or via an act of Congress that is, in the eyes of a future Supreme Court majority, disproportionate or incongruent.

These disagreements mean that Trump v Anderson goes down as both a unanimous decision barring Colorado from removing Mr Trump and a 5-4 ruling giving the Supreme Court final say on congressional action disqualifying any oath-breaking insurrectionist from pursuing public office. But for the leading Republican candidate for president, the message is clear: full steam ahead. 

Economics

BOI Reporting and the impact of the recent Federal Injunction

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The Corporate Transparency Act (CTA) is a legislative measure designed to enhance financial transparency

The Corporate Transparency Act (CTA) is a legislative measure designed to enhance financial transparency and mitigate risks such as money laundering, terrorist financing, and other illicit financial activities. The CTA aims to close loopholes and create a fairer business environment by requiring certain entities to disclose their beneficial ownership information. However, recent legal developments have temporarily impacted compliance requirements, bringing attention to the act’s ongoing litigation and implementation.

Federal Court Decision and Its Implications

On December 3, 2024, the U.S. District Court for the Eastern District of Texas issued a preliminary injunction in the case of Texas Top Cop Shop, Inc., et al. v. Garland, et al. (No. 4:24-cv-00478). This injunction temporarily halts the enforcement of the CTA, specifically its beneficial ownership reporting requirements. Additionally, the court order stays all deadlines for compliance.

As a result, reporting companies are currently not obligated to submit beneficial ownership information (BOI) reports to the Financial Crimes Enforcement Network (FinCEN). During the injunction, these entities are also shielded from liability for non-compliance with CTA mandates.

Despite this pause, FinCEN has clarified that companies may still voluntarily submit their BOI reports. This voluntary reporting option remains available for businesses that wish to align with the CTA’s transparency goals.

Overview of the Corporate Transparency Act

The CTA mandates that certain entities provide information about their beneficial owners—individuals who own or control a business. The act is intended to increase transparency, enhance national security, and reduce the anonymity that can facilitate financial crimes.

While the CTA has garnered support for its objectives, it has also faced legal challenges questioning its constitutionality. Courts in different jurisdictions have issued varying rulings, with some upholding the law and others granting temporary injunctions. For example, district courts in Virginia and Oregon have ruled in favor of the Department of the Treasury, asserting the CTA’s alignment with constitutional principles.

Compliance During the Injunction

Currently, the federal injunction exempts businesses from mandatory BOI filing requirements nationwide. This temporary halt will remain in place until further developments, such as a decision by an appellate court or a reversal of the injunction.

In response to the ruling, the Department of Justice, representing the Department of the Treasury, has filed an appeal. While the case proceeds through the legal system, FinCEN has confirmed its compliance with the court order.

Looking Ahead

The legal proceedings surrounding the CTA highlight the evolving nature of financial regulation. As courts continue to deliberate, businesses should monitor updates to remain informed about their obligations. By staying informed and prepared, businesses can effectively manage their compliance responsibilities and contribute to efforts that promote financial integrity and transparency.

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Economics

After a chaotic scramble, Congress strikes a budget deal

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Donald Trump is the most powerful Republican politician in a generation, but the president-elect is still no match for the most nihilistic members of his own party. The budget chaos that unfolded on Capitol Hill as the Christmas break approached is only a preview of the difficult realities Mr Trump will face when he starts to govern next month.

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Economics

Why Congress is so dysfunctional

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Budgetary chaos is a sign that governing will be harder than Donald Trump might assume

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