Can Congress Tax Wealth by ‘Deeming’ It Income?

By David B. Rivkin Jr. and Andrew M. Grossman

September 2, 2021, in the Wall Street Journal

Charles and Kathleen Moore have done well, but they certainly aren’t billionaires. Yet the couple’s constitutional challenge stands to slam shut the door on a federal wealth tax like the one Sen. Elizabeth Warren wants to enact.

The story is complicated, though less so than the tax code. In the 1990s Mr. Moore, a software engineer, worked at Microsoft on its Office applications and grew close to a fellow programmer, Ravi Agrawal. Mr. Agrawal dreamed of returning to his native India to do something for the small-scale farmers he knew growing up in the state of Chhattisgarh.

On a series of trips to India in the early 2000s, he saw an opportunity. Unlike the massive agricultural operations that feed the U.S., capital-poor farmers working a few acres each serve much of India. What struck Mr. Agrawal is that their tools were plainly inadequate, far less reliable and effective than what any American could buy for a few dollars at Home Depot. His idea was to close the gap by providing India’s poorest farmers with tools that would improve their livelihoods and lives, even in the face of the labor shortages in many rural areas as workers migrated to the cities.

Mr. Agrawal needed capital to get the business off the ground. He approached friends to invest in his new company, KisanKraft, and the Moores put up $40,000. It was a lot of money for them, but they believed in Mr. Agrawal and the mission. They knew they were unlikely to earn much of a financial return on their investment, because the plan was to reinvest any profits in the business and serve more of India’s rural poor.

That was the real return, and it proved massive. Mr. Agrawal had put his finger on an unmet need, and by 2017 KisanKraft had expanded to reach the entire country, with hundreds of employees, thousands of dealers and millions of customers. The Moores have never received a dime from their investment, yet it paid off beyond their greatest hope.

Then the tax bill came. As part of the Tax Cuts and Jobs Act of 2017, Congress reworked the way multinational corporations are taxed, limiting the amount that they had to pay on foreign income. Offsetting part of the cost was a new, one-time tax on earnings that certain foreign corporations had accumulated over the preceding 30 years but not distributed to their shareholders through dividends. The law deemed those earnings as 2017 income to the shareholders and taxed them on it. The Moores’ bill amounted to $15,000. They paid and are now suing for a refund, on grounds that the new tax is unconstitutional.

The Constitution grants Congress the “power to lay and collect taxes,” but with limits. Article I requires that any “direct tax”—one that falls directly on the payer rather than being passed on to someone else, such as the consumer—“be apportioned among the several states” according to population. The idea was that taxation, like representation, should be fairly apportioned so that no state or region could be singled out for disadvantage. Alexander Hamilton explained in Federalist No. 36 that tax apportionment was a key component of federalism, given that direct taxes could disrupt local economies in ways federal lawmakers couldn’t even imagine. By contrast, men of commerce would understand the effects of indirect taxes like tariffs or sales taxes, which the Constitution therefore didn’t subject to apportionment, only uniformity.

The Supreme Court held the first income tax unconstitutional as an unapportioned direct tax in 1895, and Congress eventually responded by proposing the 16th Amendment, ratified in 1913. It authorizes Congress to tax “incomes, from whatever source derived, without apportionment.”

So far as tax law goes, the Moores’ argument is straightforward. The new tax is a direct tax, and it isn’t on income—after all, they haven’t received any from KisanKraft. Instead, they’re being taxed on their property, the KisanKraft shares. The tax is therefore constitutionally invalid because it isn’t apportioned.

The government insists that the Moores are being taxed on income, because KisanKraft could theoretically distribute its accumulated earnings in the future. The courts, however, have consistently defined “income” to require, as the Supreme Court put it in Commissioner v. Glenshaw Glass (1955), “undeniable accessions to wealth, clearly realized, and over which the taxpayers have complete dominion.” As the Moores observe, they haven’t realized a dime in income. The government argues that the courts should abandon the realization requirement, giving the federal government carte blanche to tax “deemed” income without apportionment.

The stakes of the Moores’ case go well beyond their own tax liability. If they prevail, that would confirm that the Supreme Court’s precedents generally requiring apportionment and limiting the exception for taxes on “income” to its common understanding remain good law, clearly barring any kind of federal property tax, including a wealth tax—unless Congress apportions it, which there is no obvious way to do.

What makes the case an especially attractive vehicle to resolve this issue is the simplicity of their situation, a rarity in tax cases. There’s also the timing: If the courts confirm the 16th Amendment’s limited reach now, that would relieve them from having to do so in a politically explosive case directly challenging a wealth tax. The courts would do well to remind Congress at this opportune time that its taxing power is not without limits.

Mr. Rivkin served at the Justice Department and the White House Counsel’s Office in the Reagan and George H.W. Bush administrations. Mr. Grossman is an adjunct scholar at the Cato Institute. Both practice appellate and constitutional law in Washington. They represent the Moores in their refund action.

Source: https://www.wsj.com/articles/congress-tax-wealth-courts-constitution-moore-agrawal-kisankraft-elizabeth-warren-11630529642

Congress Sowed the Seeds of Jan. 6 in 1887

The Electoral Vote Count Act lets Congress think it can choose the President, but it’s unconstitutional.

By J. Michael Luttig and David B. Rivkin Jr.

March 18, 2021, in the Wall Street Journal

Congress plans to establish a commission to investigate the Jan. 6 storming of the Capitol. We already know one reason for that terrible event. Members of the mob acted in the mistaken belief, encouraged by President Trump, that lawmakers had the power to determine the election’s winner. Congress itself sowed the seeds of this belief when it passed the Electoral Vote Count Act of 1887 and could destroy it root and branch by repealing that law.

The EVCA grew out of another bitterly contested presidential election. In 1876 officials in Florida, Louisiana and South Carolina certified competing slates of electors, one for Republican Rutherford B. Hayes and one for Democrat Samuel J. Tilden ; a single electoral vote from Oregon was similarly contested. The 20 disputed votes were enough to decide the election. A congressional commission ultimately chose Hayes in a political deal. In exchange for the presidency, Republicans agreed to end Reconstruction and withdraw federal troops from the South.

The EVCA was enacted 10 years later, largely to limit Congress’s role in determining which electoral votes to accept. Yet Congress gave itself more authority than the Constitution allows, by establishing a labyrinthine process to resolve state electoral-vote challenges. The most constitutionally offensive provision gave Congress the absolute power to invalidate electoral votes as “irregularly given,” a process that a single representative and senator can trigger by filing an objection.

Fortunately, this provision has seldom been invoked—only twice before 2021—and no objection has ever been sustained. But this year Republican lawmakers vowed to contest the results in six swing states that Joe Biden carried. Although the objections had no prospect of success in a Democratic House and those that were filed (for Arizona and Pennsylvania) were voted down overwhelmingly in both chambers, the law put Congress smack in the middle, where it uncomfortably found itself in 1876.

That’s not what the Framers intended. The Constitution’s Electors Clause gives state legislatures plenary authority over the manner of choosing electors and relegates Congress to determining on what day the Electoral College would cast its votes. The 12th Amendment, ratified in 1804, reformed the Electoral College by providing for separate votes for president and vice president. It also reiterates the Article II, Section 1 language that the certified state electoral results are to be transmitted to Washington, opened by the president of the Senate, and counted in the presence of both congressional houses.

No constitutional provision empowers Congress to resolve disputes over the validity of a state’s electoral slate—or for that matter addresses who is to resolve these disputes. Significantly, the 12th Amendment gives Congress no power to enact legislation to enforce its provisions, unlike subsequent amendments expanding the franchise. The Necessary and Proper Clause doesn’t support such legislation either. The constitutional text contains further indications that the Framers chose to exclude Congress from participating in presidential elections. While Article I, Section 5 grants Congress the authority to judge the elections of its own members, no such power is given with regard to presidential elections. And Article II, Section 1 forbids members of Congress from being appointed as electors.

In fact, after much debate, the Framers deliberately chose to deny Congress any substantive role in selecting the president and vice president, except in the rare case that no candidate has an Electoral College majority. This was for compelling separation-of-powers reasons. As Gouverneur Morris explained at the time, “if the Executive be chosen by the [National] Legislature, he will not be independent [of] it; and if not independent, usurpation and tyranny on the part of the Legislature will be the consequence.”

Thus Congress’s prescribed role as audience during the process of opening and counting the electoral votes is ministerial. With electoral college votes coming from all of the states, the counting had to be performed by a federal government entity, and both the executive and judicial branches had potential conflicts of interest. That Congress has no constitutional “skin in the game” of presidential selection made it perfectly positioned for this role of official observer.

Who then does have the power to settle disputes over electoral slates, such as those in 1876 and 2020? Whether electors are validly chosen is a quintessentially legal determination, not a political one. When state legislatures select presidential electors, they exercise power vested in them by the U.S. Constitution, not by state law. As the power to say what federal law is rests with the federal judiciary, it is the federal courts that have the authority and the responsibility to resolve these disputes.

Congress should promptly repeal the Electoral Vote Counting Act. Given the tight constitutional timeline for casting and counting votes and inaugurating a president, lawmakers should enact a statute providing for expeditious federal judicial resolution of all questions relating to compliance with state legislatively established procedures for selecting presidential electors, the validity of elector selection, and the casting of electoral votes—and requiring eventual mandatory Supreme Court review.

By ridding the country of this unconstitutional and anachronistic law, lawmakers would remove themselves from the process for choosing the president and surrender back to the federal judiciary the role Congress unconstitutionally arrogated to itself almost a century and a half ago. That would go a long way toward ensuring that America never witnesses a siege on the National Capitol on a future Jan. 6.

Mr. Luttig served as a judge on the Fourth U.S. Circuit Court of Appeals, 1991-2006. He advised Vice President Mike Pence on the 2020 vote certification. Mr. Rivkin practices appellate and constitutional law in Washington. He served in the White House Counsel’s Office and Justice Department under Presidents Reagan and George H.W. Bush.

Source: https://www.wsj.com/articles/congress-sowed-the-seeds-of-jan-6-in-1887-11616086776

Legal analysis of the Democrats’ proposed elections law

In this interview (20 Feb 2021) on the Dan Proft show, David Rivkin shows that the Democrats’ proposal to regulate federal elections is unconstitutional, especially in relation to presidential ballots. The constitution stipulates that determining the manner of presidential elections is a power held by the states, not by Congress. The interview follows a recent op-ed published in the Wall Street Journal

An Unconstitutional Voting ‘Reform’

Democrats want to impose federal rules on elections for president. Congress doesn’t have that power.

By David B. Rivkin Jr. and Jason Snead

Feb. 16, 2021, in the Wall Street Journal

House Democrats have made election “reform” their top legislative priority. House Resolution 1, styled the For the People Act, would vitiate existing state election laws, federalize the rules of congressional and presidential elections, and effectively do the same for state elections, which are often conducted on the same ballot. Critics have noted that the proposed rules are designed to benefit Democrats. They’re also unconstitutional.

The key problem is that the Constitution doesn’t give Congress the authority to regulate all federal elections in the same way. Congress has significant power over congressional elections. The Elections Clause of Article I, Section 4 provides that state legislatures “shall prescribe” the “times, places and manner of holding elections for senators and representatives,” but also authorizes Congress to “make or alter such regulations.”

Yet Congress has only limited authority over the conduct of presidential elections. They are governed by the Electors Clause in Article II, Section 1, which provides: “Congress may determine the time of choosing the electors, and the day on which they shall give their votes; which day shall be the same throughout the United States.” Congress’s timing determination is binding on the states, as the Eighth U.S. Circuit Court of Appeals held last year in Carson v. Simon, which rejected Minnesota’s modification of its ballot-receipt deadline. (The Honest Elections Project sponsored the litigation, and Mr. Rivkin was the plaintiffs’ lead attorney.)

But the Electors Clause gives state legislatures plenary power over the manner of selecting presidential electors. It does not permit lawmakers to promulgate a comprehensive federal elections code. Nor does the 15th Amendment, which bars racial discrimination in voting, or the other amendments extending the franchise. Each grants Congress the power to enforce its guarantees through “appropriate legislation.” But as the Supreme Court explained in City of Boerne v. Flores (1997), “Congress does not enforce a constitutional right by changing what the right is.” None of these amendments guarantee the right to vote in any particular way—such as by mail versus in person—so Congress can’t rightly be said to be enforcing them through H.R.1. And none of them repeal the Electors Clause.

Although all 50 state legislatures have provided for popular election of presidential electors, the legislatures could change state law and appoint electors directly. H.R.1 violates the Electors Clause on its face, purporting to govern not merely the time, place and manner of congressional elections, but also regulating presidential elections in exactly the same prescriptive matter as congressional elections.

The profound difference between the Electors Clause and the Elections Clause was no accident. The 1787 Constitutional Convention in Philadelphia considered many possible methods of choosing the chief executive: direct popular election, selection by one or both houses of Congress, even a vote of state governors. Ultimately, delegates settled on a college of electors, chosen in a manner to be determined by the legislature of each state, to avoid the president’s selection by Congress. As Pennsylvania’s Gouverneur Morris said at the convention, “if the Executive be chosen by the [national] legislature, he will not be independent [of] it; and if not independent, usurpation and tyranny on the part of the legislature will be the consequence.”

Another delegate, South Carolina’s Charles Pinckney, explained later: “In the Federal Convention great care was used to provide for the election of the president of the United States independently of Congress; to take the business as far as possible out of their hands.” Congress, Pinckney continued, “had no right to meddle with it at all.” The only exception is that the House chooses the president if no candidate commands an Electoral College majority.

The Supreme Court has recognized state legislatures’ primacy in regulating presidential elections. In McPherson v. Blacker (1892), the justices upheld Michigan’s apportionment of presidential electors by congressional district, holding that the Constitution “leaves it to the [state] legislature exclusively to define the method” of appointing electors. Subsequent rulings have adhered to that principle. In Burroughs v. U.S. (1934), the court held that Congress’s authority is limited to enacting laws that don’t “interfere with the power of a state to appoint electors or the manner in which their appointment shall be made.”

The court restated this principle as recently as 2000, holding unanimously in Bush v. Palm Beach County Canvassing Board that the Florida Supreme Court couldn’t change state election laws on its own authority, without action by the Legislature.

Even if lawmakers cured the constitutional deficiency of H.R.1 by applying it only to congressional elections, it would still be bad policy. Voting systems are vast and complex. Even minor, well-intentioned changes can have significant unintended consequences. Few know this better than election officials themselves. According to a recent report by Pennsylvania’s county commissioners, “uncertainty regarding court challenges” and “confusion because of ever-changing guidance” from Secretary of State Kathy Boockvar contributed to the November delays and problems experienced by counties across the commonwealth. It took Philadelphia two weeks to count 700,000 ballots.

By contrast, Florida has spent two decades bolstering its election system after the debacle of 2000. The Sunshine State processed 11 million ballots in November and reported accurate results on election night. More states should be doing what Florida does.

But H.R.1 would put Florida’s success at risk. Its law requires voters to show identification and return absentee ballots by Election Day, bans organized ballot trafficking, and requires that voters cure problems with their mail-in ballots no later than two days after an election. Common-sense measures like these help the state deliver honest elections with prompt and accurate results even in the face of a pandemic. For H.R.1’s drafters, though, these are instruments of “voter suppression.” The bill would dilute or prohibit all these measures.

Keeping states in charge of elections also limits the damage when policy changes fail. States can experiment with voting improvements, learn from missteps, and replicate successes. Not so with a one-size-fits-all system. Any troubles caused by a national voting law will instantly affect all 50 states, none of which will have the freedom to correct them. Imposing unconstitutional voting changes on the whole nation would politicize the machinery of democracy and risk permanently tainting the credibility of elections.

Mr. Rivkin practices appellate and constitutional law in Washington. He served in the White House Counsel’s Office and Justice Department under Presidents Reagan and George H.W. Bush. Mr. Snead is executive director of the Honest Elections Project.

Source: https://www.wsj.com/articles/an-unconstitutional-voting-reform-11613497134

The Constitution Will Survive Covid-19

By David B. Rivkin Jr. and Lee A. Casey

Nov. 27, 2020, in the Wall Street Journal

The Covid-19 pandemic “has served as a sort of constitutional stress test,” Justice Samuel Alito observed this month. “The pandemic has resulted in previously unimaginable restrictions on individual liberty.” The setting underscored the point: Justice Alito made his remarks in an online speech that ordinarily would have been delivered in a cavernous hall, before a crowd of hundreds gathered for the Federalist Society’s annual dinner.

A public-health emergency may justify curtailments of liberty that would be unacceptable in normal times. But even in an emergency, America’s government doesn’t wield unlimited powers. Measures taken to deal with this pandemic have imposed severe restrictions on the most basic rights and liberties, often with little consideration of their legal basis. The U.S. Constitution prohibits many of the most draconian measures taken or under consideration.

Joe Biden has implicitly acknowledged the point. Accepting the Democratic presidential nomination in August, the former vice president declared: “We’ll have a national mandate to wear a mask—not as a burden, but to protect each other. It’s a patriotic duty.” But his transition website promises only to “implement mask mandates nationwide by working with governors and mayors.”

A federal mask mandate is a nonstarter because it would have to be grounded in one of Congress’s constitutionally enumerated powers, all of which have limits. The go-to section to justify federal regulation is the clause granting lawmakers the power “to regulate commerce . . . among the several states.” As the Supreme Court held in National Federation of Independent Business v. Sebelius (2012), which involved the ObamaCare mandate to buy medical insurance, individuals must be engaged in commercial activity before Congress can regulate them. Congress cannot impose requirements on the citizenry “precisely because they are doing nothing,” Chief Justice John Roberts wrote.

The same is true of other prospective federal anti-Covid measures, such as a national “stay at home” order or an overall economic lockdown. Congress does have broad authority to regulate business, which it could use to impose workplace safety rules, including mask mandates. But nationwide lockdowns are a dubious legal proposition. Congress has never attempted to eliminate all or most economic activity. Any such requirement, even if supportable under the Commerce Clause, would raise significant concerns about the constitutional rights of people prevented from earning a living.

State and local mandates pose a more complicated question. Unlike the federal government, states have a general “police power” that permits them to enact public-health regulations. State and local mask mandates will likely survive judicial scrutiny, as the burden is relatively small. But quarantine requirements imposed on otherwise healthy people, and especially stay-at-home orders and shutdowns of economic activity, are another matter.

Courts have generally upheld quarantines as proper exercises of state police power. But they have traditionally required the involuntary seclusion only of infected individuals and those exposed to them. Quarantines for travelers may survive constitutional challenges. They are generally limited to 14 days or less and arguably supported by the states’ interest in limiting the potential to spread the infection from viral “hot spots.”

But states have no constitutional authority to discriminate against out-of-state persons, goods or services or to burden interstate commerce unduly. It would be hard to justify restrictions that draw arbitrary distinctions between intra- and interstate travelers or among states. New York’s current rules, for instance, exempt travelers within New York and from adjacent states while ordering quarantine for those from distant states with lower Covid rates.

Universal, open-ended stay-at-home mandates and general economic shutdowns are unprecedented in America. The former amount to the imposition of house arrest on vast numbers of people without due process or any provision for basic needs. They raise important constitutional issues involving freedom of assembly, due process and equal protection.

Mandating how many individuals can meet in one’s home, as some states did in time for Thanksgiving, is particularly difficult to justify. If the government can regulate your dinner guests, what can’t it do? Although the government has imposed location-specific curfews in times of war and civil disorder to address specific public-safety concerns, protracted populationwide curfews directed at more-nebulous threats will be difficult to justify.

Some of these issues will doubtless reach the Supreme Court, but lower courts are already wrestling with them. In County of Butler v. Wolf, William S. Stickman IV, a federal district judge in Pittsburgh, struck down Pennsylvania’s most draconian anti-Covid-19 measures. These included strict limits on indoor and outdoor gatherings, stay-at-home requirements, and the lockdown of businesses that aren’t “life-sustaining.” Judge Stickman found these measures wanting on First Amendment, due-process and equal-protection grounds, even under an “intermediate” level of scrutiny.

“A public health emergency does not give Governors and other public officials carte blanche to disregard the Constitution for as long as the medical problem persists,” Judge Stickman concluded in his September decision. He took particular note of Pennsylvania’s diversity of communities—and hence of Covid risks—as against the state’s “one-size fits all approach” to stay-at-home orders, which were not in any way tailored to minimize the burden while achieving the government’s legitimate ends.

Judge Stickman concluded that Pennsylvania’s business lockdown requirements failed to meet even the lowest level of constitutional scrutiny—being rationally related to a proper state purpose. He noted that the state had not articulated “a set, objective and measurable definition” of “life-sustaining” businesses, and that its requirements arbitrarily favored large retailers over small ones. Pennsylvania has appealed Judge Stickman’s decision, but it is difficult to see how the state can defend such capricious and comprehensive restrictions. The same goes for other states: Such details as closing health clubs but not beauty salons (New York), or imposing restrictions on the use of sailboats but not motorboats (Michigan), appear driven not by any rational basis but by government officials’ aesthetic and ideological preferences.

No doubt some judges will be inclined to defer to government officials in an emergency. Five Supreme Court justices did so earlier this year when churches in California and Nevada sought to enjoin state orders limiting the number of worshipers at services. In both cases, Chief Justice Roberts voted with the court’s four Democratic appointees to deny immediate relief.

But the other four justices dissented in both cases on the grounds that the orders violate freedom of religion by imposing greater limits on religious activities than comparable secular businesses, including casinos. As Justice Alito quipped during his Federalist Society speech: “Take a quick look at the Constitution. You will see the Free Exercise Clause of the First Amendment, which protects religious liberty. You will not find a craps clause.”

This Wednesday the court granted injunctive relief to the Roman Catholic Diocese of Brooklyn and an Orthodox synagogue, which are challenging New York Gov. Andrew Cuomo’s occupancy limits. Justice Amy Coney Barrett joined the new 5-4 majority. In a concurring opinion, Justice Neil Gorsuch observed that the state had ignored “long-settled principles” that almost always prohibit government officials “from treating religious exercises worse than comparable secular activities.”

One area in which the states clearly can impose anti-Covid mandates is vaccinations. In Jacobson v. Massachusetts (1905), the Supreme court upheld the city of Cambridge’s authority to respond to a smallpox outbreak by mandating vaccines for all inhabitants. The justices affirmed that “the rights of the individual in respect of his liberty may at times, under the pressure of great dangers, be subjected to such restraint, to be enforced by reasonable regulations, as the safety of the general public may demand.”

Congress may also be able to impose vaccination or testing on employees or others engaged in commerce. But proponents of economic lockdowns overreach when they cite Jacobson in support. The case was modest in scope and dealt with a far surer remedy for a deadlier virus than Covid-19.

Federal and state officials have every right to urge Americans to take precautions against viral spread, though it would help if they consistently followed their own advice. But when the government moves beyond persuasion to coercion, its requirements must meet constitutional muster.

Some of them will, such as well-tailored state-level mask and vaccination mandates. Others probably won’t, including broad curfews, stay-at-home orders, economic lockdown mandates and measures that target protected First Amendment activities. There may be a “judicial impulse to stay out of the way in times of crisis,” Justice Gorsuch wrote in the New York case. “But . . . we may not shelter in place when the Constitution is under attack.”

Messrs. Rivkin and Casey practice appellate and constitutional law in Washington. They served in the White House Counsel’s Office and Justice Department under Presidents Reagan and George H.W. Bush.

Source: https://www.wsj.com/articles/the-constitution-will-survive-covid-19-11606502792

How Trump or Biden Can Get Serious About Human Rights in Cuba

By Paula J. Dobriansky and David B. Rivkin Jr.

Nov. 11, 2020, in the Wall Street Journal

As an insular nation with a population smaller than Ohio’s, Cuba plays an outsize role in both world affairs and U.S. domestic policy. Either President Trump, who won Florida, or Joe Biden, who’d have liked to, should take stock of the Cuban regime’s actions—among them gross violations of human rights, efforts to destabilize the Western Hemisphere, and broad collaboration with China, Iran, North Korea and Russia. The U.S. needs a bold new approach, using corruption-focused sanctions against Cuban officials and their accomplices.

One of the most reprehensible aspects of Cuban statecraft has been its trafficking every year of some 50,000 medical doctors, who are effectively enslaved and forced to work in other countries. “The Cuban regime takes up to 90% of what they charge . . . other countries for each doctor, pocketing considerable revenues and exploiting the doctors, who receive but a pittance,” Michael Kozak, the acting assistant secretary of state for Western Hemisphere affairs, said in an April briefing. Cuban government 2018 figures indicate slave labor brings in $7 billion a year and that it is the regime’s single largest source of revenue, accounting for 60% of its total foreign income.

Past U.S. administrations have pursued various policies toward Cuba, ranging from the decades-long economic embargo and restrictions on travel to a “normalization” policy under President Obama. Mr. Trump rolled back the Obama administration’s policy and reimposed comprehensive sanctions—but more needs to be done.

The U.S. should target Havana’s most heinous policies and do so in a way that would be difficult for its allies and supporters to counteract. The key to the new strategy is the Global Magnitsky Act of 2016, known informally as GloMag. It authorizes sanctions to cut off Cuban officials and their accomplices from global financial services, augmenting traditional sanctions that have cut them off from the U.S. financial industry.

The 2012 Magnitsky Act targeted individual Russian officials involved in the killing of lawyer Sergei Magnitsky in prison in 2009. The GloMag expanded that regime to cover foreign government officials implicated in human-rights abuses and corruption anywhere in the world.

President Trump further expanded the GloMag program in 2017, through Executive Order 13818, which broadens the scope of conduct that can trigger sanctions from “gross violations of internationally recognized human rights” to “serious human rights abuse,” and replaces “significant acts of corruption” with the broader term “corruption.” Since the law’s passage, the U.S. has imposed GloMag sanctions on individuals and entities from more than 20 countries, most recently designating for corruption Gibran Bassil, a senior Lebanese official. Still, these designations came in a trickle, rather than a wave.

Sanctions—including asset freezes, travel bans and exclusion from financial services—should be imposed on Cuban government officials involved in a variety of acts, all of which inevitably involve corruption, such as human trafficking, violating sanctions against Iran and North Korea, and drug trafficking. Sanctions should also target their agents or associates, whether or not they work for the government. There is sufficient available evidence that the Treasury’s Office of Foreign Assets Control could quickly make GloMag designations and rapidly adjust them as the targets attempt to circumvent sanctions. These designations could also be made even more expeditiously by a presidential executive order.

If adroitly deployed on a large scale, GloMag sanctions would cut deeply into Havana’s revenues and impair the ability of virtually all Cuban officials and their allies to do business or even travel. GloMag and other legal tools also allow the U.S. to reach third parties, who have financial or other dealings with targeted Cuban officials. Those parties could be subjected either to sanctions or criminal prosecution. The availability of these legal tools would reduce support for the Cuban regime world-wide.

Because European Union governments and other U.S. allies have vigorously embraced anticorruption policies, they would find it difficult to oppose this strategy. Canada, Britain and several other Western countries have GloMag-like sanction statutes of their own.

Domestically, a strong stand against the modern slave trade that underpins Havana’s statecraft should draw bipartisan support. Internationally, given Britain’s indispensable role in eradicating the trans-Atlantic slave trade in the 19th Century, London should be a U.S. partner in cracking down on Cuba-driven slave trade and corruption. By strategically employing GloMag, the U.S. can curtail Cuba’s malign activities and push the Cuban regime toward major reforms.

Ms. Dobriansky is a senior fellow at Harvard’s Belfer Center. She served as undersecretary of state for global affairs, 2001-09. Mr. Rivkin practices appellate and constitutional law in Washington. He served in the White House Counsel’s Office and Justice Department under Presidents Reagan and George H.W. Bush.

Source: https://www.wsj.com/articles/how-trump-or-biden-can-get-serious-about-human-rights-in-cuba-11605134209