David Rivkin, Constitutional Attorney and Media Commentator

Now is the time to hit the Iranian regime with lower oil prices

For the sake of the Iranian people and global stability, we need to lead the effort in suppressing oil prices beyond what Tehran can bear.

By David B. Rivkin Jr. and Nawaf E. Obaid, January 7 2018 in USA Today

Mass protests are gripping Iran as its people express their discontent with crippling poverty, governmental corruption, and Tehran’s highly expensive sponsorship of terrorist proxies around the Middle East. The protests are geographically widespread, rural and urban, and challenge the very sinews of Iran’s mullahcracy. The United States can and should support Iranian freedom by pressuring the regime at its most vulnerable point, oil revenues. This strategy should have long- and short-term components, both designed to decrease global oil prices.

Iran’s dire economic situation is at the heart of this discontent. As President Rouhani acknowledged, the government cannot meet payroll and is seeking to increase revenue and decrease expenditures. Since 80% of Iran’s budget comes from petroleum exports, the quickest and surest way to bring about regime change in Tehran is a broad campaign to reduce current global oil prices.

In order for Tehran to balance its budget, oil prices need to be around $130 per barrel, over twice what they are today. Several factors — including government-promised subsidies to wheat farmers and debt payment obligations that are headed toward default — are pushing Iran to the financial breaking point. Add to this the rising costs of Tehran’s military establishment, and the mullahs’ expanding commitment to fomenting chaos around the Arab world, and you have a recipe for financial meltdown. The doomsday scenario could only be avoided by a major rise in oil prices that would allow Iran, with 10% of proven global reserves, to rescue itself.

For the sake of the Iranian people and global stability, this cannot be allowed to happen. Washington should lead the effort. Tehran is a major American foe and a successful anti-mullahcracy effort would both improve Middle East security and enhance US global credibility.

There are four ways to suppress further the current low global oil prices. First, the ad hoc understanding between Saudi Arabia and Russia, the world’s first and second largest oil exporters respectively, to curtail oil output would need to be suspended. This would enable the Saudis, who have the highest spare capacity of any nation, to increase exports, driving down prices. Moscow would hate losing its key Middle Eastern ally and wouldn’t countenance such a suspension, but it cannot stop the Saudis, for whom Iran is also a major adversary.

Second, the United States should continue with its long-term efforts to increase both the U.S. oil output — which it has already done by just announcing a major expansion of offshore oil drilling — and increasing U.S. capacity to export oil and petroleum products by building additional pipelines and terminal facilities. While these efforts would exert some downward pressure on prices, they would need to be supplemented by the short-term measures, that are capable of having an immediate pricing impact. The key such measure would be an agreement between the United States and a Saudi-led coalition (along with UAE and Kuwait) to increase output, bringing the price down by at least $10 per barrel. Further, because Tehran suffers from a lack of indigenous capital and technology to increase sustained production capacity and hence oil exports, this same coalition should convince the few oil companies willing to invest in Iran’s upstream industry to put their efforts on hold.

Finally, because Tehran lacks access to foreign financial markets and American banks view investing in Iran as too risky, its only hope is in European, and to a much lesser extent Asian, banks. The Trump administration should send a strong message to European and Asian banks that their access to U.S. capital markets will be endangered, if they float credits to Tehran in any form.

One might ask why Saudi Arabia, a nation that also depends heavily on oil revenues, would support a lower price. The answer is simple cost-benefit analysis. Blocking Iran’s drive for regional hegemony is the kingdom’s highest foreign policy priority. The Saudis are spending tens of billions of dollars attempting to stabilize nations such as Lebanon, Bahrain and Palestine and fighting wars in Yemen and Syria against Iranian destabilization efforts. Not only are the Saudis eager to shrink these expenditures, but with about $500 billion in foreign reserves and one of the cheapest oil extraction costs in the world, they can withstand lower petroleum prices for years if necessary. In short, the regime change that low oil prices would bring in Iran represents a vital foreign policy boon and overall financial savings over the mid to long-term for the kingdom.

Tehran simply cannot survive a sustained $50 per barrel price. All those wishing to bring an end to the decades of widespread terror caused by this so-called Islamic Republic, and support the Iranian people in their own demands for change, should commit to the above-mentioned measures. Only the oil weapon can end this repressive regime.

David B. Rivkin Jr. served in the Departments of Justice and Energy and the White House Counsel’s Office during the Reagan and George H. W. Bush administrations.  Nawaf E. Obaid, a visiting fellow for intelligence & defence projects at Harvard’s Belfer Center, is a former advisor to the Saudi government.

Source: https://www.usatoday.com/story/opinion/2018/01/07/wielding-oil-weapon-against-iran-best-way-end-its-oppressive-regime-david-rivkin-nawaf-obaid-column/1005225001/

January 8, 2018
0 comment

The Ninth Circuit Ignores Precedent and Threatens National Security

By DAVID B. RIVKIN JR. and LEE A. CASEY

The Ninth U.S. Circuit Court of Appeals violated both judicial precedent and the Constitution’s separation of powers in its ruling against President Trump’s executive order on immigration. If the ruling stands, it will pose a danger to national security.

Under normal rules of standing, the states of Washington and Minnesota should never have been allowed to bring this suit. All litigants, including states, must meet fundamental standing requirements: an injury to a legally protected interest, caused by the challenged action, that can be remedied by a federal court acting within its constitutional power. This suit fails on every count.

The plaintiff states assert that their public universities are injured because the order affects travel by certain foreign students and faculty. But that claim involved no legally protected interest. The granting of visas and the decision to admit aliens into the country are discretionary powers of the federal government. Unadmitted aliens have no constitutional right to enter the U.S. In hiring or admitting foreigners, universities were essentially gambling that these noncitizens could make it to America and be admitted. Under the theory of standing applied in this case, universities would be able to sponsor any alien, anywhere in the world, then go to court to challenge a decision to exclude him.

It is also settled law that a state can seek to vindicate only its own rights, not those of third parties, against the national government. The U.S. Supreme Court held in Massachusetts v. Mellon (1923) that it is not within a state’s duty or power to protect its citizens’ “rights in respect of their relations with the Federal Government.” Thus the plaintiffs’ claims that the executive order violates various constitutional rights, such as equal protection, due process and religious freedom, are insufficient because these are individual and not states’ rights.

Read more »

February 10, 2017
0 comment

What Kind of a Judge Is Neil Gorsuch?

He carefully follows the law, and writes as engagingly as Scalia, without the abrasiveness.

By DAVID B. RIVKIN JR. and ANDREW M. GROSSMAN

The Wall Street Journal, Jan. 31, 2017 

Judge Neil Gorsuch, President Trump ’s nominee to succeed Justice Antonin Scalia, is a native Coloradan and avid outdoorsman. He clerked for a federal appellate judge and two Supreme Court justices and spent a decade practicing law before his appointment in 2006, at age 39, to the 10th U.S. Circuit Court of Appeals. In the decade since, he has written some 850 opinions.

The way to take a judge’s measure is to read his opinions, and so we set out to review Judge Gorsuch’s. It was not an arduous task, for his prose is unusually engaging—think Scalia, with none of the abrasiveness. Justice Elena Kagan has declared herself a fan of his writing style. The only difficulty in summarizing Judge Gorsuch’s output is the compulsion to quote, at length, from so many of his opinions.

One opens this way: “Haunted houses may be full of ghosts, goblins, and guillotines, but it’s their more prosaic features that pose the real danger. Tyler Hodges found that out when an evening shift working the ticket booth ended with him plummeting down an elevator shaft.” The case, by the way, was a prosaic dispute between insurers. Another opinion starts: “What began as a fight at a strip club finds its way here as a clash over hearsay.”

Judge Gorsuch shows a concern for the people whose disputes are before the court. Each opinion typically begins with the name of the person seeking relief and why. A recent example: “After a bale of hay hit and injured Miriam White while she was operating her tractor, she sued the manufacturer, Deere & Company.” Ms. White’s appeal was summarily denied, but even the brief, three-page opinion reflects a serious engagement with her arguments and the facts—in contrast with the boilerplate language judges often use in such decisions. Win or lose, parties appearing before Judge Gorsuch surely know that they have been treated with fairness, consideration and respect. Read more »

February 1, 2017
0 comment

When Is a Judge Not Really a Judge?

A dispute over whether the SEC can hear its own cases could lead to a shrinking administrative state.

By DAVID B. RIVKIN JR. and ANDREW M. GROSSMAN

Jan. 23, 2017 in the Wall Street Journal

An “alphabet soup” of federal agencies established since the 1930s have gradually supplanted the rule of Congress and the courts with the rule of supposed expertise. This accumulation of power is what James Madison identified in Federalist No. 47 as “the very definition of tyranny.” An example of this trend is the Securities and Exchange Commission’s increased use of in-house administrative law judges under the Obama administration.

Following high-profile losses in federal court—remember the insider trading charges against Mark Cuban?—the SEC decided to file fewer enforcement cases in courts presided over by independent judges. Instead, the agency began to take advantage of its in-house administrative law judges. Conveniently, a change in the Dodd-Frank Act authorized the agency’s judges to hear more kinds of cases and dispense more penalties.

Administrative law judges are agency employees. The proceedings they oversee provide fewer protections than court cases. They also tend to set stern deadlines and limit the right to factual investigation, often leaving defendants to rely on the SEC’s evidence. According to a 2015 Wall Street Journal analysis, the agency’s shift paid off: Through the beginning of that year, it won 90% of cases in its in-house court, compared with 69% of regular court cases. Administrative decisions can be appealed to court but are rarely reversed. That’s because the judges apply a deferential “clear error” standard to the agency’s factual findings. Read more »

January 24, 2017
0 comment

Environmentalists’ fact-free case against Scott Pruitt

Pruitt’s record is one of defending the environment and attempting to get the EPA to operate within the law.

By David B. Rivkin Jr. and Andrew M. Grossman, in the National Review

January 18, 2017

Environmentalists know that they don’t like Scott Pruitt, the Oklahoma attorney general whom President-elect Donald Trump has tapped to lead the Environmental Protection Agency. But they don’t seem to know exactly why, based on the fact-free attacks being lobbed in his direction. Could it be that they’re simply mistaken?

Sure, Pruitt’s led the movement of states resisting the Obama-era EPA’s overreaches and challenging them in court. (In full disclosure, he brought us in to represent Oklahoma in its challenge to EPA carbon-emission rules.) But his point in those cases has always been that the EPA has to live within the limits of the law, including the constitutional prohibition on the federal government directing the states to do its bidding. So when EPA overstepped the line, Pruitt took it to court. A desire to see the agency follow the law isn’t exactly disqualifying for an EPA administrator.

It also doesn’t say much about how Pruitt regards the environment. He’s on record as arguing that conservatives should recognize the important role of the EPA in addressing pollution that flows across state lines, which is a uniquely federal problem. But that, he’s said, should be the EPA’s focus. Echoing the Clean Air Act itself, Pruitt’s view is that most pollution is the primary responsibility of states and local governments. Only they can understand and act on the trade-offs involved in environmental protection and have the flexibility to take into account local needs, rather than impose one-size-fits-all nationwide rules.

On that score, Pruitt has practiced what he preached. When Pruitt entered office in 2011, one of the most serious environmental problems facing Oklahoma was poultry runoff, mostly from Arkansas farms, fouling the waters of the Illinois River and Lake Tenkiller in the eastern part of the state. Oklahoma had brought a federal lawsuit against 14 poultry producers in 2005, and it took nearly five years for the case to be teed up for a decision, in 2010. Read more »

January 18, 2017
0 comment

‘Clean Power’ Plays and the Last Stand for Federalism

By DAVID B. RIVKIN, JR. and ANDREW M. GROSSMAN

Sept. 25, 2016, in the Wall Street Journal

After Congress turned down President Obama ’s request to enact a law regulating power plants’ greenhouse-gas emissions, the Environmental Protection Agency turned to the states—not with a request, but with instructions to carry out the president’s energy policy. The EPA’s “Clean Power Plan” now faces the scrutiny of the nation’s chief regulatory review court, the U.S. Court of Appeals for the District of Columbia Circuit.

If the Constitution’s federalism is to endure, the Clean Power Plan must be struck down.

The Constitution establishes a federal government of limited and enumerated powers while the states retain a plenary “police power,” subject only to the specific limitations of federal law. This is what Justice Anthony Kennedy called the Constitution’s “genius”: It “split the atom of sovereignty” to ensure accountability when meeting both local and national concerns, while fostering rivalry between the two levels to curb excessive political ambition that might threaten liberty.

Only in recent decades did politicians learn how to realize their ambitions through collusion. The federal government now entices states with transfer payments to establish and administer social-welfare programs. And, in schemes that the courts describe as “cooperative federalism,” it offers states the choice to regulate their citizens according to federal dictates, as an alternative to the feds regulating directly and having states get out of the way. Read more »

September 26, 2016
0 comment