Minnesota Threatens To Fine This Engineer for Calling Himself an Engineer


Copy of grand forks

The head of an urban policy nonprofit is suing Minnesota’s engineering licensing board after they threatened him with fines and other sanctions for calling himself an engineer in speeches and articles while having a temporarily expired engineering license.

Charles Marohn, a licensed civil engineer since 2000 and president of the advocacy group Strong Towns, argues that the board is violating his First Amendment rights by policing his description of himself as a professional engineer in connection to his policy advocacy.

The sanctions he’s being threatened with, he contends, are retaliation against Strong Towns’ activism, which is critical of spending more money on large infrastructure projects typically beloved by professional engineers.

The state’s licensing board “is making findings that I have been dishonest and misrepresented myself to the public, that I made false statements. These things are not only unfounded, they are just deeply, deeply damaging,” says Marohn. “I’m not practicing engineering. This board has no authority to regulate what my speech is and what I’m out saying.”

Marohn’s problems began in February 2020. That’s when a South Dakota engineer, David D. Dixon, submitted a complaint to the Minnesota Board of Architecture, Engineering, Land Surveying, Landscape Architecture, Geoscience, and Interior Design (AELSLAGID) after reading an article authored by Marohn that was critical of traffic engineers on Strong Towns’ website.

Marohn’s website biography said that he was a “Professional Engineer (PE) licensed in the state of Minnesota.” According to Dixon’s complaint, he searched Marohn’s name on the AELSLAGID website only to find that his license had expired in June 2018.

“Based on that, I sought to determine whether this reference on [Strong Towns] was an isolated reference, perhaps an oversight, or part of a deliberate effort to mislead the public,” wrote Dixon in his complaint, which notes that Marohn is also described as an engineer in “about the author” page of his February 2020 book and in materials for a 2019 conference at which Marohn was a speaker.

“Mr. Marohn talks about being a policy expert, the type that reads law and ordinance. It is not reasonable to assume that Mr. Marohn was not aware that use of the term Professional Engineer, PE, or other similar representations while not licensed, is a violation of law,” Dixon says in his complaint. “I urge the board to investigate as it sees fit, and to send a clear message that frauds of this sort are not tolerated.”

Marohn received notice of this complaint from AELSLAGID in July 2020, over a month after he’d already renewed his expired license.

Minnesota engineering licenses expire on June 30 of even-numbered years. Licensees are required to proactively renew them.

AELSLAGID sends out courtesy notices reminding people of their need to renew their licenses. Marohn has been a licensed engineer in the state since 2000. In 2016, however, he moved without informing the board, and thus missed the biennial renewal reminder that was sent to his old address in 2018.

Then in June 2020, a Strong Towns co-worker brought it to Marohn’s attention that his license had lapsed. Screenshots of Slack messages that Marohn submitted to AELSLAGID show him reacting with surprise at the news. He renewed it the same day and also paid a late renewal fee of $120. His lawsuit notes that he’d also completed the required continuing education hours during the time his license was expired.

“It’s kind of silly. I don’t go out and practice as an engineer. I’m a writer. I do public speaking, and I do writing. I do advocacy work. I don’t sign plans; I don’t do construction drawings,” Marohn told Reason in July 2020. He said at the time that he didn’t expect the board to sanction him over an obvious bad-faith complaint.

That prediction has turned out to be wrong. In November 2020, AELSLAGID informed Marohn that their investigation had determined that disciplinary action was warranted.

Specifically, the board demanded he pay a $1,500 fine and sign an order admitting he’d violated Minnesota law by using the title of “professional engineer” in his writings and speeches while his license was expired. They also wanted him to admit he’d lied to AELSLAGID when filling out his license renewal application, part of which requires the applicant to certify they haven’t improperly represented themselves as a licensed professional.

Marohn objected to the idea that he’d engaged in any willful deception. In a written response to AELSLAGID, he also said that under his reading of Minnesota law, the restrictions on the use of the title “professional engineer” only applied in circumstances where people were actually trying to practice engineering.

He thus declined to sign off on the board’s particular sanctions.

That led to a March virtual hearing with AELSLAGID’s five-member Complaint Committee. Here too, Marohn says that the primary concerns of the board were about his use of the term engineer in connection to his advocacy work.

One member of the board, he says, expressed concern that his description of himself as an engineer in talks he gave at Google, The American Conservative, and TEDx might make people more likely to listen to his ideas, thus endangering public health and safety.

That notion “is ridiculous because it’s not like I was any less qualified during the gap in my licensure,” says Marohn. “I was just talking; I’m giving a speech.”

Following the hearing—and in an effort to put the whole thing behind him—Marohn told AELSLAGID that he’d agree to a $500 civil fine and would sign a “stipulated order” admitting that he called himself a professional engineer while his license had lapsed.

In exchange, he wanted the board to acknowledge in writing that he’d renewed his license before being made aware of any complaint against him and that they drop their accusation that he’d made “untruthful” and “false” statements.

In April, AELSLAGID’s Complaint Committee declined that settlement. So last week, Marohn sued AELSLAGID in the U.S. District Court for the District of Minnesota arguing the board’s sanctions against him violate the First Amendment’s Free Speech protections.

“The board’s enforcement against [Marohn] raises some serious First Amendment concerns,” says Sam Gedge, an attorney at the Institute for Justice.

The government does have the ability to restrict unlicensed people referring to themselves as professional engineers to prevent fraud, Gedge says. But that would only apply to a very narrow set of circumstances like commercial advertising.

“The board is concerned that this gentleman referred to himself as a professional engineer in books, and speeches and communications like that. In that context, the government has no business policing the truth or falsity of speech,” he tells Reason.

The Institute for Justice has litigated similar cases before. In 2017, it sued Oregon’s engineering board after it fined Beaverton man Mats Järlström for referring to himself as an engineer in letters to the board, despite not having a state engineering license.

“The government licensing boards are the new censors in America. They’re aggressive, and time and time again it becomes clear they just don’t believe the First Amendment applies to them,” he says, adding that AELSLAGID “seems to be in need of suing.”

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A 135-Year-Old Maritime Law Is Stopping Cruise Ships From Returning to Alaska


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President Joe Biden Monday signed a bill into law that will allow cruise ships to return to Alaska this summer, apparently ignoring that it was our own terrible federal maritime regulations that made the bill necessary in the first place.

Rep. Don Young and Sens. Lisa Murkowski and Dan Sullivan, all Republicans who represent Alaska, introduced the Alaska Tourism Restoration Act in March. The bill allows 51 specifically named cruise ships to bypass Canadian ports and go directly from Washington to Alaska and back.

Anybody who has taken Alaskan cruises in the past on these major cruise ships has stopped at ports in Canada. They might not have realized that a federal law—the Passenger Vessel Services Act of 1886 (PVSA)—essentially requires Canadian detours.

The PVSA is a protectionist maritime law that requires that large vessels owned by American companies, transporting passengers between U.S. ports, be made in America and crewed by Americans. It is similar to the Jones Act, which establishes similar laws for cargo transportation.

It is a hamfisted attempt to heavily tip the scales in favor of American shipping and maritime interests. It’s not even subtext: An explainer from Customs and Border Protection states outright that its intent is to provide a “legal structure that guarantees a coastwise monopoly to American shipping and thereby promotes development of the American merchant marine.” The purpose of the law is to “advance the United States merchant marine and fleet by restricting the use of [non-compliant] vessels in the United States territorial waters.”

But 135 years later, that’s not how things have panned out. Colin Grabow, a trade policy analyst with the Cato Institute, points out that this law has not resulted in an American cruise ship manufacturing base. America has not built a cruise ship since 1958; the law is protectionism for an industry that doesn’t exist.

Instead, cruise ship companies work around the law by stopping in foreign ports between U.S. ports. For the Alaska cruise, that means stops in Canada. This, amusingly, means that a federal law that supposedly exists to protect American maritime interests has in reality led to cruise ships having to make stops in Canada and increasing that country’s tourism revenue instead. No wonder the Canadian government lobbies to keep the PVSA intact.

But, in March 2020, Canada banned cruises from stopping at its ports as part of its efforts to contain the spread of COVID-19. It plans to keep this ban until at least February 2022, So it is not currently possible for major cruise ships in America to resume these Alaska tours while still being in compliance with the PVSA. The Alaska Tourism Restoration Act allows these cruise ships to simply pretend, by legislative fiat, that they have visited Canada by sending an email to Canadian and U.S. Customs and Border Protection officials.

Grabow notes that of all the massive major cruise ships that sail along America’s coastal waters, only one is PVSA compliant, and even that’s a stretch.

“There is only one PVSA compliant large cruise ships in the entire country, Norwegian Cruise Line’s Pride of America which operates out of Hawaii,” Grabow tells Reason via email. “However, that ship required a special waiver to operate under the PVSA as it was mostly built in Germany. That waiver was secured with the help of a major lobbying effort.”

Canadian ports that have come to rely on that tourism revenue are now worried about what might happen next. Those Canadian towns may be pleased to hear that the Alaska Tourism Restoration Act is set to sunset in March of 2022 or whenever Canada lifts its ban on cruise ships.

This is unfortunate because these stops are being forced not by consumer demand but by government mandate. It may well be that travelers do enjoy these stops in Canada. But cruise lines don’t actually have the option to adjust for where tourists actually want to travel as long as the PVSA remains.

When Biden signed the bill yesterday, he simply tweeted about how passing the Alaska Tourism Restoration Act helps “revitalize” Alaska’s tourism industry. But he did not mention that the PVSA is actually responsible for Alaska’s suffering, nor did he indicate any plans to get rid of it.

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A 135-Year-Old Maritime Law Is Stopping Cruise Ships From Returning to Alaska


cruises_1161x653

President Joe Biden Monday signed a bill into law that will allow cruise ships to return to Alaska this summer, apparently ignoring that it was our own terrible federal maritime regulations that made the bill necessary in the first place.

Rep. Don Young and Sens. Lisa Murkowski and Dan Sullivan, all Republicans who represent Alaska, introduced the Alaska Tourism Restoration Act in March. The bill allows 51 specifically named cruise ships to bypass Canadian ports and go directly from Washington to Alaska and back.

Anybody who has taken Alaskan cruises in the past on these major cruise ships has stopped at ports in Canada. They might not have realized that a federal law—the Passenger Vessel Services Act of 1886 (PVSA)—essentially requires Canadian detours.

The PVSA is a protectionist maritime law that requires that large vessels owned by American companies, transporting passengers between U.S. ports, be made in America and crewed by Americans. It is similar to the Jones Act, which establishes similar laws for cargo transportation.

It is a hamfisted attempt to heavily tip the scales in favor of American shipping and maritime interests. It’s not even subtext: An explainer from Customs and Border Protection states outright that its intent is to provide a “legal structure that guarantees a coastwise monopoly to American shipping and thereby promotes development of the American merchant marine.” The purpose of the law is to “advance the United States merchant marine and fleet by restricting the use of [non-compliant] vessels in the United States territorial waters.”

But 135 years later, that’s not how things have panned out. Colin Grabow, a trade policy analyst with the Cato Institute, points out that this law has not resulted in an American cruise ship manufacturing base. America has not built a cruise ship since 1958; the law is protectionism for an industry that doesn’t exist.

Instead, cruise ship companies work around the law by stopping in foreign ports between U.S. ports. For the Alaska cruise, that means stops in Canada. This, amusingly, means that a federal law that supposedly exists to protect American maritime interests has in reality led to cruise ships having to make stops in Canada and increasing that country’s tourism revenue instead. No wonder the Canadian government lobbies to keep the PVSA intact.

But, in March 2020, Canada banned cruises from stopping at its ports as part of its efforts to contain the spread of COVID-19. It plans to keep this ban until at least February 2022, So it is not currently possible for major cruise ships in America to resume these Alaska tours while still being in compliance with the PVSA. The Alaska Tourism Restoration Act allows these cruise ships to simply pretend, by legislative fiat, that they have visited Canada by sending an email to Canadian and U.S. Customs and Border Protection officials.

Grabow notes that of all the massive major cruise ships that sail along America’s coastal waters, only one is PVSA compliant, and even that’s a stretch.

“There is only one PVSA compliant large cruise ships in the entire country, Norwegian Cruise Line’s Pride of America which operates out of Hawaii,” Grabow tells Reason via email. “However, that ship required a special waiver to operate under the PVSA as it was mostly built in Germany. That waiver was secured with the help of a major lobbying effort.”

Canadian ports that have come to rely on that tourism revenue are now worried about what might happen next. Those Canadian towns may be pleased to hear that the Alaska Tourism Restoration Act is set to sunset in March of 2022 or whenever Canada lifts its ban on cruise ships.

This is unfortunate because these stops are being forced not by consumer demand but by government mandate. It may well be that travelers do enjoy these stops in Canada. But cruise lines don’t actually have the option to adjust for where tourists actually want to travel as long as the PVSA remains.

When Biden signed the bill yesterday, he simply tweeted about how passing the Alaska Tourism Restoration Act helps “revitalize” Alaska’s tourism industry. But he did not mention that the PVSA is actually responsible for Alaska’s suffering, nor did he indicate any plans to get rid of it.

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Texas Deputies Say They Were ‘Molested and Traumatized’ by Colleagues During Federally Funded Prostitution Stings


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Texas “‘bachelor party’ prostitution stings soon grew into a booze-fueled playground for sexual exploitation,” claims a new lawsuit. Several high-ranking Harris County law enforcement officers are accused of sexually assaulting and harassing their female colleagues under the guise of stopping human trafficking. In a new federal lawsuit, women currently or formerly employed with the Harris County Constable’s Office accuse Precinct 1 Constable Alan Rosen, Assistant Chief Chris Gore, and Lieutenant Shane Rigdon of having “molested and traumatized” them in the course of conducting prostitution stings paid for by the federal government.

Rosen, Gore, and Rigdon are the leaders of the department’s federally funded human trafficking unit, notes the lawsuit, calling the unit “an opportunity for notoriety and media attention.” Like so many of its kind, it considers entrapping sex workers via undercover prostitution stings to be the main part of its mission. The unit commonly has cops pose as “johns” to get sex workers to agree to illegal acts. They then arrest them under the misguided theory that most sex workers are forced into it and if you only arrest enough of them, someone will give up “their sex traffic business handlers.”

Yet the suit presents no suggestion that any “sex traffic business handlers” or “human trafficking” rings were ever stopped (the unit did “not focus on solving cases at all,” it states), merely that sex workers—and at least one minor—were harassed by police and then arrested afterward. Several female cops were allegedly subjected to similar abuse and mistreatment, only without the arrests at the end.

These female deputies—Liz Gomez, Marissa Sanchez, and Felecia McKinney—were selected for undercover operations with the unit “under the guise of legitimate police work” and subsequently harassed and mistreated “by their intoxicated male commanding officers,” states the lawsuit, filed in the U.S. District Court for the Southern District of Texas:

What began as an idea for “bachelor party” prostitution stings soon grew into a booze-fueled playground for sexual exploitation in which young, untrained deputies were subject to disgusting abuse. Both Constable Rosen and the Harris County District Attorney’s Office have known about this abuse for months, but they refused to take any action and rebuffed anyone who complained. Constable Alan Rosen attended at least one of these “parties” personally. Three of the young deputies spoke up about their abuse to their supervisors at the Constable’s Office, including Constable Rosen’s chief of staff, but they were ridiculed by their commanders, retaliated against by their abusers, and quietly reassigned to less prestigious duties.

In addition, Jacquelyn Aluotto, a “human trafficking advocate” employed by the county (and the fourth plaintiff in this suit) spoke up about went what on as part of these undercover operations and was fired the day after giving an interview to the office’s Internal Affairs division, the suit says.

Besides detailing alleged mistreatment against Aluotto, Gomez, Sanchez, and McKinney, the women’s suit offers a dismaying look at how Harris County, which encompasses Houston, is spending federal human trafficking grant money:

In Gore’s bachelor partyoperations, the division would set up surveillance in a hotel room or suite, and both male and female deputies would be present in an undercover capacity in a partylike atmosphere where the female deputies would pose as other prostitutes present for the same purpose. Ideally, this would entice any prostitutes called to the location to feel more comfortable in quickly agreeing to sex in exchange for a fee, and an arrest could be made. This type of operation did not result in more productivity; it did provide an opportunity though for the male deputies to have more fun under the guise of actual police work. Each and every one of these “bachelor party” stings were countysanctioned operations. Despite being “in a legal gray area,” as Chief Gore would refer to the operations when discussing them with his underlings, they were done in accordance with department policy, set and approved by Rosen. …

Alcohol was purchased with HCCO1 petty cash and consumed in abundance. The male supervisors would continually pressure female deputies to drink. Gore would tell the female deputies to “drink up,” “get loose,” and that it was time to “start the party.” The stingswere indeed more of a party atmosphere than an actual operation.

Gomez, Sanchez, and McKinney say they were untrained for this sort of work and picked for it by Gore “based on his personal taste in women—young, attractive, and Latina.” As part of the operation, they were “continuously subjected to sexual harassment, unwarranted touching, unwanted kissing, molestation, and sexual ridicule,” their suit asserts. And this allegedly started before the stings even began:

Chief Gore instructed Gomez to purchase new and revealing clothing and send images via text to Chief Gore while shopping. Gore would relay the message “that’s not slutty enough” while Gomez was trying on the clothing at the store, and was ordered to purchase something more provocative.

Gomez was then ordered to try on the dresses for Gore in his office.

Gomez was ordered to accompany Chief Gore to an adult sex shop where he would pick out some propsand work on chemistrywith her. After picking up a product labeled “cock sleeve,” Chief Gore commented to the young female deputy “oh I bet you would like this.” He also instructed Gomez to purchase dildos and to pick out the ones you would personally prefer.These sex toys were paid for with County funds. This trip to the sex shop was also the first of several instances where Chief Gore told Liz Gomez she was not allowed to work with any other male deputiesshe was “his.”

And it got worse from there, according to Gomez and the other plaintiffs:

Female deputies were … ordered that during these operations to maintain coverChief Gore would be lying down on top of them, fondling their breasts and bodies. They were never warned, however, that during this conduct Chief Gore would be wearing only boxer shorts, fully aroused, drunk, kissing and licking their bodies, and giddy after every sting. …

Cameras were set up so that the entire room was viewable. Chief Gore, however, instructed the surveillance teams to ensure that none of the “party scenes” were caught on the footage that would be provided to the District Attorney’s Office for any arrests.

Lieutenant Shane Rigdon would review all surveillance of the operations the day following the evening stings and delete footage that he declared “lacked evidentiary value” before providing the evidence to the District Attorney’s Office, again in violation of criminal discovery statutes.

Gomez asked to be removed from the undercover team after partaking in two such “parties.” She was replaced by Marissa Sanchez, who says she was subjected to the same sort of treatment as Gomez had been:

As the first suspects arrived and the sting began, Chief Gore immediately took off Sanchez‘s bra without warning and for no real reason. He then threw her bra across the room. This conduct would become his routine at the beginning of every single operation. While her breasts and naked body were exposed due to Chief Gore’s actions, he would continuously laugh, even after the undercover operation ended.

Chief Gore would maneuver his body on top or under Sanchez, where she could feel his arousal. Chief Gore also would immediately begin kissing and licking Sanchez‘s neck and chest. Chief Gore was intoxicated during these assaults due to the shots of hard liquor he insisted all undercovers consume before and during operations and the cases of beer the male deputies consumed throughout the operations.

Sanchez complained to Rosen about what happened and was transferred to another “less prestigious” unit.

Ironically, the deputy plaintiffs in this suit express few qualms about how the non-cop women in these situations were treated. And even when criticizing the way a particular victim situation was handled, Aluotto—the human trafficking advocate—expresses no reservations about the underlying premises of the work, which involved arresting suspected victims, including minors:

On one sting, Aluotto and Gore’s female “undercover partner” were interviewing a minor trafficking victim after an arrest was made. Chief Gore burst into the room, intoxicated from the evening’s festivities, and pulls his “partner” out of the interview in the middle of the child’s outcry before anything of substance was conveyed by the minor victim. Tired and intoxicated, Gore had his fun and was ready to leave. He demanded the minor female trafficking victim “hurry up” with her statement and began to yell at her. He did not care about the law enforcement work to be done.

Like her colleagues, McKinney alleges that her “experience in the undercover bachelor party stings was gruesome and gutwrenching.” But “her most horrifying experience came from [another] operation overseen and approved by Constable Alan Rosen,” involving a male massage parlor worker accused of sexually assaulting Rosen’s chief of staff.

McKinney was ordered to enter the parlor in an undercover capacity and wait to be sexually assaulted to give the raid signal,” despite the fact that there “was already sufficient evidence to make an arrest prior to exposing McKinney to this trauma,” her suit states. As part of the operation, she was “penetrated in both her vagina and anus by the same individual who had only days before assaulted the HCCO-1 staff member.” She says she was then forced to drive herself to a sexual assault exam and report the charges to the district attorney herself.

The suit accuses Harris County of retaliation and of violation of equal protection by loss of bodily integrity, and accuses Rosen, Gore, and Rigdon, and Harris County of sexual harassment and sexual battery.

“I have a zero-tolerance stance against sexual assault and sexual harassment and would never allow a hostile work environment as alleged,” said Rosen in a statement. “This lawsuit is an effort to impugn the good reputation of the hard-working men and women of the Precinct One Constable’s Office. I believe our system of due process works and that justice and truth will prevail as facts in this case come to light.”


FREE MINDS

Georgia loses suit over anti-boycotting law:


FREE MARKETS

Conservative groups rally against Biden’s IRS expansion plan. I wrote about the plan—which involves hiring 87,000 new IRS staffers and expanding their access to information about Americans’ financial accounts—in Roundup last week.

“Conservative groups have launched a campaign of TV ads, social media messages and emails to supporters criticizing the proposal to hire nearly 87,000 new IRS workers over the next decade to collect money from tax cheats,” notes Politico. More:

They accuse the Biden administration of pushing for the IRS expansion as a way to raise taxes, increase dues paid to left-leaning unions, and increase oversight on political organizations, as happened with the rise of Tea Party groups during the Obama presidency.

The campaign further dampens already remote prospects for bipartisan negotiations. Biden and fellow Democrats have held out hope that the $80 billion proposal to crack down on tax evasion by high-earners and large corporations could be an area of agreement between the two parties, even if the GOP is skeptical about the amount it could raise.

Many Republicans have already expressed opposition to the other ways Biden wants to raise money, including taxes on corporate and wealthy Americans, to pay for his roughly $4 trillion worth of plans to repair roads and bridges and offer free community college and paid family leave, among other proposals.

And some Republicans, who have long worked to shrink the IRS, hope opposition to the IRS proposal — which the administration says will raise $700 billion over a decade — could help defeat Biden’s costly spending plans altogether.

Meanwhile in Elizabeth Warren land:

The Massachusetts Democrat is proposing to give the IRS a mandatory annual budget of $31.5 billion, up from the $11.9 billion the agency received from Congress for fiscal year 2021. Warren’s legislation would remove the agency’s funding from the annual appropriations process, so that it wouldn’t change based on the year-to-year whims of Congress.


QUICK HITS

• More than 50 percent of adults in 25 states, D.C., and Guam have been fully vaccinated.

• Secret recordings reveal officials discussing the “filthy” conditions of 4,632 immigrant kids held in a Texas detention camp, reports Reason‘s C.J. Ciaramella.

• Biden’s infrastructure plan is flailing.

• NetChoice vice president Carl Szabo comments on Florida’s new social media law:

By forcing websites to host speech, this bill takes us closer to a state-run internet where the government can cherry pick winners and losers. By carving out companies like Disney and Universal, Florida’s legislature revealed its anti-tech fervor and true intent to punish social media for allegations of anti-conservative bias.

• A bipartisan coalition in Congress “has introduced the TRUST Act (S. 1295), which would set up a bipartisan legislative process to keep the Social Security, Medicare, and highway trust funds solvent.”

• “Seven Republican lawmakers in the Maine House of Representatives lost their committee posts on Monday after they were recorded entering a legislative building without masks despite rules requiring them,” The Hill reports.

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Why Does the CFPB Want To Protect Teens From Cryptocurrencies?


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For the past few years, the Consumer Financial Protection Bureau (CFPB) has published financial literacy activities for K-12 educators. These materials examine traditional personal finance subjects like loans, taxes, and saving habits. And as cryptocurrencies have become more popular, the CFPB has woven them into its educational roster, too—but only the parts that fit its agenda.

The resulting activity, “Wondering about virtual currencies,leans more toward advocacy than it does education. Apart from being self-serving (one reflection question asks students to “write a sentence describing why advisories such as this one are helpful to consumers”), it is overly critical of the current cryptocurrency space. 

Cartoonish cautionary tales figure heavily in the activity’s source text, the CFPB’s “Risks to consumers posed by virtual currencies” advisory. “Nicole” lost all her bitcoin after using a corrupt bitcoin exchange. “James” discarded his private keys and could no longer access his bitcoin holdings. “Kat” and “Larry” lost thousands when their hosted wallet companies wouldn’t help recover stolen bitcoin. Other risks mentioned range from mildly annoying to truly awful. For all these downsides, there’s little mention of the benefits of cryptocurrencies.

Plenty has changed since August 2014, when the advisory was last updated. Bitcoin is now trading at about $37,000 after hitting a record high above $63,000 this past April, compared to an August 2014 price of roughly $500. Ethereum, the second-largest cryptocurrency, did not exist when the CFPB released the advisory. In the last five years, its price has risen from $12.70 to $2,744.52. 

The classroom activity warns that few retailers accept virtual currencies as payment and implies that they aren’t widely used. But these days, over 15,000 businesses accept bitcoin, and the currency is used in over 300,000 transactions daily. Some 46 million Americans17 percent of the adult population—now own bitcoin, according to a study conducted by the New York Digital Investment Group. That doesn’t even account for the thousands of other cryptocurrencies. 

Still, theft and fraud are common risks according to the CFPB activity. It’s true that cryptocurrencies are not legally protected the way government-backed assets are. But “theft of bitcoin from unsuspecting wallets has almost completely disappeared,” according to Bitcoin Magazine. Just 0.002 percent of the bitcoin supply was stolen in 2020—a 92 percent drop from 2019. If those odds are still too high, cautious holders can keep virtual assets in “cold storage” wallets, which are offline and more secure.

Try as it might, the CFPB has not deterred investors. Crypto buyers either haven’t seen the agency’s warnings, or they have and simply don’t care. Whichever is true, the CFPB’s efforts to scare high school students away from crypto investments are misguided. Young people are already capitalizing on their curiosity: Nearly one in 10 American teenagers has traded crypto assets, according to financial services company Piper Sandler. Over a quarter of Gen Z and millennials prefer bitcoin over stocks as of 2019.

This activity’s sole purpose is to “make [students] aware of the potential risks of investing in virtual currency,” even though the agency’s “Investigating investing” guide asks students to consider the benefits of various investment products in addition to the costs. To the CFPB, virtual currencies are the only asset class worthy of such high scrutiny. (“That’s because [other asset classes] are insured by the federal government.”

Lack of government involvement is often why people choose to invest in cryptocurrencies in the first place. In the face of rising inflation, they’re hedges against a weakening U.S. dollar. Inflation also renders investment vehicles that the CFPB encourages students to considerlike government-backed bondsless lucrative. It shouldn’t be any wonder that people are seeking nongovernmental solutions.

Besides, young people can benefit from cryptocurrencies. Some college students are footing their tuition bills thanks to their crypto investments. The CFPB should empower students to weigh costs and benefits on their own—a seemingly obvious component of the very financial literacy it aims to teach.

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Texas Deputies Say They Were ‘Molested and Traumatized’ by Colleagues During Federally Funded Prostitution Stings


Screen Shot 2021-05-25 at 9.06.47 AM

Texas “‘bachelor party’ prostitution stings soon grew into a booze-fueled playground for sexual exploitation,” claims a new lawsuit. Several high-ranking Harris County law enforcement officers are accused of sexually assaulting and harassing their female colleagues under the guise of stopping human trafficking. In a new federal lawsuit, women currently or formerly employed with the Harris County Constable’s Office accuse Precinct 1 Constable Alan Rosen, Assistant Chief Chris Gore, and Lieutenant Shane Rigdon of having “molested and traumatized” them in the course of conducting prostitution stings paid for by the federal government.

Rosen, Gore, and Rigdon are the leaders of the department’s federally funded human trafficking unit, notes the lawsuit, calling the unit “an opportunity for notoriety and media attention.” Like so many of its kind, it considers entrapping sex workers via undercover prostitution stings to be the main part of its mission. The unit commonly has cops pose as “johns” to get sex workers to agree to illegal acts. They then arrest them under the misguided theory that most sex workers are forced into it and if you only arrest enough of them, someone will give up “their sex traffic business handlers.”

Yet the suit presents no suggestion that any “sex traffic business handlers” or “human trafficking” rings were ever stopped (the unit did “not focus on solving cases at all,” it states), merely that sex workers—and at least one minor—were harassed by police and then arrested afterward. Several female cops were allegedly subjected to similar abuse and mistreatment, only without the arrests at the end.

These female deputies—Liz Gomez, Marissa Sanchez, and Felecia McKinney—were selected for undercover operations with the unit “under the guise of legitimate police work” and subsequently harassed and mistreated “by their intoxicated male commanding officers,” states the lawsuit, filed in the U.S. District Court for the Southern District of Texas:

What began as an idea for “bachelor party” prostitution stings soon grew into a booze-fueled playground for sexual exploitation in which young, untrained deputies were subject to disgusting abuse. Both Constable Rosen and the Harris County District Attorney’s Office have known about this abuse for months, but they refused to take any action and rebuffed anyone who complained. Constable Alan Rosen attended at least one of these “parties” personally. Three of the young deputies spoke up about their abuse to their supervisors at the Constable’s Office, including Constable Rosen’s chief of staff, but they were ridiculed by their commanders, retaliated against by their abusers, and quietly reassigned to less prestigious duties.

In addition, Jacquelyn Aluotto, a “human trafficking advocate” employed by the county (and the fourth plaintiff in this suit) spoke up about went what on as part of these undercover operations and was fired the day after giving an interview to the office’s Internal Affairs division, the suit says.

Besides detailing alleged mistreatment against Aluotto, Gomez, Sanchez, and McKinney, the women’s suit offers a dismaying look at how Harris County, which encompasses Houston, is spending federal human trafficking grant money:

In Gore’s bachelor partyoperations, the division would set up surveillance in a hotel room or suite, and both male and female deputies would be present in an undercover capacity in a partylike atmosphere where the female deputies would pose as other prostitutes present for the same purpose. Ideally, this would entice any prostitutes called to the location to feel more comfortable in quickly agreeing to sex in exchange for a fee, and an arrest could be made. This type of operation did not result in more productivity; it did provide an opportunity though for the male deputies to have more fun under the guise of actual police work. Each and every one of these “bachelor party” stings were countysanctioned operations. Despite being “in a legal gray area,” as Chief Gore would refer to the operations when discussing them with his underlings, they were done in accordance with department policy, set and approved by Rosen. …

Alcohol was purchased with HCCO1 petty cash and consumed in abundance. The male supervisors would continually pressure female deputies to drink. Gore would tell the female deputies to “drink up,” “get loose,” and that it was time to “start the party.” The stingswere indeed more of a party atmosphere than an actual operation.

Gomez, Sanchez, and McKinney say they were untrained for this sort of work and picked for it by Gore “based on his personal taste in women—young, attractive, and Latina.” As part of the operation, they were “continuously subjected to sexual harassment, unwarranted touching, unwanted kissing, molestation, and sexual ridicule,” their suit asserts. And this allegedly started before the stings even began:

Chief Gore instructed Gomez to purchase new and revealing clothing and send images via text to Chief Gore while shopping. Gore would relay the message “that’s not slutty enough” while Gomez was trying on the clothing at the store, and was ordered to purchase something more provocative.

Gomez was then ordered to try on the dresses for Gore in his office.

Gomez was ordered to accompany Chief Gore to an adult sex shop where he would pick out some propsand work on chemistrywith her. After picking up a product labeled “cock sleeve,” Chief Gore commented to the young female deputy “oh I bet you would like this.” He also instructed Gomez to purchase dildos and to pick out the ones you would personally prefer.These sex toys were paid for with County funds. This trip to the sex shop was also the first of several instances where Chief Gore told Liz Gomez she was not allowed to work with any other male deputiesshe was “his.”

And it got worse from there, according to Gomez and the other plaintiffs:

Female deputies were … ordered that during these operations to maintain coverChief Gore would be lying down on top of them, fondling their breasts and bodies. They were never warned, however, that during this conduct Chief Gore would be wearing only boxer shorts, fully aroused, drunk, kissing and licking their bodies, and giddy after every sting. …

Cameras were set up so that the entire room was viewable. Chief Gore, however, instructed the surveillance teams to ensure that none of the “party scenes” were caught on the footage that would be provided to the District Attorney’s Office for any arrests.

Lieutenant Shane Rigdon would review all surveillance of the operations the day following the evening stings and delete footage that he declared “lacked evidentiary value” before providing the evidence to the District Attorney’s Office, again in violation of criminal discovery statutes.

Gomez asked to be removed from the undercover team after partaking in two such “parties.” She was replaced by Marissa Sanchez, who says she was subjected to the same sort of treatment as Gomez had been:

As the first suspects arrived and the sting began, Chief Gore immediately took off Sanchez‘s bra without warning and for no real reason. He then threw her bra across the room. This conduct would become his routine at the beginning of every single operation. While her breasts and naked body were exposed due to Chief Gore’s actions, he would continuously laugh, even after the undercover operation ended.

Chief Gore would maneuver his body on top or under Sanchez, where she could feel his arousal. Chief Gore also would immediately begin kissing and licking Sanchez‘s neck and chest. Chief Gore was intoxicated during these assaults due to the shots of hard liquor he insisted all undercovers consume before and during operations and the cases of beer the male deputies consumed throughout the operations.

Sanchez complained to Rosen about what happened and was transferred to another “less prestigious” unit.

Ironically, the deputy plaintiffs in this suit express few qualms about how the non-cop women in these situations were treated. And even when criticizing the way a particular victim situation was handled, Aluotto—the human trafficking advocate—expresses no reservations about the underlying premises of the work, which involved arresting suspected victims, including minors:

On one sting, Aluotto and Gore’s female “undercover partner” were interviewing a minor trafficking victim after an arrest was made. Chief Gore burst into the room, intoxicated from the evening’s festivities, and pulls his “partner” out of the interview in the middle of the child’s outcry before anything of substance was conveyed by the minor victim. Tired and intoxicated, Gore had his fun and was ready to leave. He demanded the minor female trafficking victim “hurry up” with her statement and began to yell at her. He did not care about the law enforcement work to be done.

Like her colleagues, McKinney alleges that her “experience in the undercover bachelor party stings was gruesome and gutwrenching.” But “her most horrifying experience came from [another] operation overseen and approved by Constable Alan Rosen,” involving a male massage parlor worker accused of sexually assaulting Rosen’s chief of staff.

McKinney was ordered to enter the parlor in an undercover capacity and wait to be sexually assaulted to give the raid signal,” despite the fact that there “was already sufficient evidence to make an arrest prior to exposing McKinney to this trauma,” her suit states. As part of the operation, she was “penetrated in both her vagina and anus by the same individual who had only days before assaulted the HCCO-1 staff member.” She says she was then forced to drive herself to a sexual assault exam and report the charges to the district attorney herself.

The suit accuses Harris County of retaliation and of violation of equal protection by loss of bodily integrity, and accuses Rosen, Gore, and Rigdon, and Harris County of sexual harassment and sexual battery.

“I have a zero-tolerance stance against sexual assault and sexual harassment and would never allow a hostile work environment as alleged,” said Rosen in a statement. “This lawsuit is an effort to impugn the good reputation of the hard-working men and women of the Precinct One Constable’s Office. I believe our system of due process works and that justice and truth will prevail as facts in this case come to light.”


FREE MINDS

Georgia loses suit over anti-boycotting law:


FREE MARKETS

Conservative groups rally against Biden’s IRS expansion plan. I wrote about the plan—which involves hiring 87,000 new IRS staffers and expanding their access to information about Americans’ financial accounts—in Roundup last week.

“Conservative groups have launched a campaign of TV ads, social media messages and emails to supporters criticizing the proposal to hire nearly 87,000 new IRS workers over the next decade to collect money from tax cheats,” notes Politico. More:

They accuse the Biden administration of pushing for the IRS expansion as a way to raise taxes, increase dues paid to left-leaning unions, and increase oversight on political organizations, as happened with the rise of Tea Party groups during the Obama presidency.

The campaign further dampens already remote prospects for bipartisan negotiations. Biden and fellow Democrats have held out hope that the $80 billion proposal to crack down on tax evasion by high-earners and large corporations could be an area of agreement between the two parties, even if the GOP is skeptical about the amount it could raise.

Many Republicans have already expressed opposition to the other ways Biden wants to raise money, including taxes on corporate and wealthy Americans, to pay for his roughly $4 trillion worth of plans to repair roads and bridges and offer free community college and paid family leave, among other proposals.

And some Republicans, who have long worked to shrink the IRS, hope opposition to the IRS proposal — which the administration says will raise $700 billion over a decade — could help defeat Biden’s costly spending plans altogether.

Meanwhile in Elizabeth Warren land:

The Massachusetts Democrat is proposing to give the IRS a mandatory annual budget of $31.5 billion, up from the $11.9 billion the agency received from Congress for fiscal year 2021. Warren’s legislation would remove the agency’s funding from the annual appropriations process, so that it wouldn’t change based on the year-to-year whims of Congress.


QUICK HITS

• More than 50 percent of adults in 25 states, D.C., and Guam have been fully vaccinated.

• Secret recordings reveal officials discussing the “filthy” conditions of 4,632 immigrant kids held in a Texas detention camp, reports Reason‘s C.J. Ciaramella.

• Biden’s infrastructure plan is flailing.

• NetChoice vice president Carl Szabo comments on Florida’s new social media law:

By forcing websites to host speech, this bill takes us closer to a state-run internet where the government can cherry pick winners and losers. By carving out companies like Disney and Universal, Florida’s legislature revealed its anti-tech fervor and true intent to punish social media for allegations of anti-conservative bias.

• A bipartisan coalition in Congress “has introduced the TRUST Act (S. 1295), which would set up a bipartisan legislative process to keep the Social Security, Medicare, and highway trust funds solvent.”

• “Seven Republican lawmakers in the Maine House of Representatives lost their committee posts on Monday after they were recorded entering a legislative building without masks despite rules requiring them,” The Hill reports.

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Why Does the CFPB Want To Protect Teens From Cryptocurrencies?


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For the past few years, the Consumer Financial Protection Bureau (CFPB) has published financial literacy activities for K-12 educators. These materials examine traditional personal finance subjects like loans, taxes, and saving habits. And as cryptocurrencies have become more popular, the CFPB has woven them into its educational roster, too—but only the parts that fit its agenda.

The resulting activity, “Wondering about virtual currencies,leans more toward advocacy than it does education. Apart from being self-serving (one reflection question asks students to “write a sentence describing why advisories such as this one are helpful to consumers”), it is overly critical of the current cryptocurrency space. 

Cartoonish cautionary tales figure heavily in the activity’s source text, the CFPB’s “Risks to consumers posed by virtual currencies” advisory. “Nicole” lost all her bitcoin after using a corrupt bitcoin exchange. “James” discarded his private keys and could no longer access his bitcoin holdings. “Kat” and “Larry” lost thousands when their hosted wallet companies wouldn’t help recover stolen bitcoin. Other risks mentioned range from mildly annoying to truly awful. For all these downsides, there’s little mention of the benefits of cryptocurrencies.

Plenty has changed since August 2014, when the advisory was last updated. Bitcoin is now trading at about $37,000 after hitting a record high above $63,000 this past April, compared to an August 2014 price of roughly $500. Ethereum, the second-largest cryptocurrency, did not exist when the CFPB released the advisory. In the last five years, its price has risen from $12.70 to $2,744.52. 

The classroom activity warns that few retailers accept virtual currencies as payment and implies that they aren’t widely used. But these days, over 15,000 businesses accept bitcoin, and the currency is used in over 300,000 transactions daily. Some 46 million Americans17 percent of the adult population—now own bitcoin, according to a study conducted by the New York Digital Investment Group. That doesn’t even account for the thousands of other cryptocurrencies. 

Still, theft and fraud are common risks according to the CFPB activity. It’s true that cryptocurrencies are not legally protected the way government-backed assets are. But “theft of bitcoin from unsuspecting wallets has almost completely disappeared,” according to Bitcoin Magazine. Just 0.002 percent of the bitcoin supply was stolen in 2020—a 92 percent drop from 2019. If those odds are still too high, cautious holders can keep virtual assets in “cold storage” wallets, which are offline and more secure.

Try as it might, the CFPB has not deterred investors. Crypto buyers either haven’t seen the agency’s warnings, or they have and simply don’t care. Whichever is true, the CFPB’s efforts to scare high school students away from crypto investments are misguided. Young people are already capitalizing on their curiosity: Nearly one in 10 American teenagers has traded crypto assets, according to financial services company Piper Sandler. Over a quarter of Gen Z and millennials prefer bitcoin over stocks as of 2019.

This activity’s sole purpose is to “make [students] aware of the potential risks of investing in virtual currency,” even though the agency’s “Investigating investing” guide asks students to consider the benefits of various investment products in addition to the costs. To the CFPB, virtual currencies are the only asset class worthy of such high scrutiny. (“That’s because [other asset classes] are insured by the federal government.”

Lack of government involvement is often why people choose to invest in cryptocurrencies in the first place. In the face of rising inflation, they’re hedges against a weakening U.S. dollar. Inflation also renders investment vehicles that the CFPB encourages students to considerlike government-backed bondsless lucrative. It shouldn’t be any wonder that people are seeking nongovernmental solutions.

Besides, young people can benefit from cryptocurrencies. Some college students are footing their tuition bills thanks to their crypto investments. The CFPB should empower students to weigh costs and benefits on their own—a seemingly obvious component of the very financial literacy it aims to teach.

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Brickbat: The Eyes of Texas


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Former, Dallas County, Texas, assistant district attorney Richard Jackson has surrendered his law license after the State Bar of Texas found he withheld evidence in a case that led to the wrongful conviction of two men in the murder of a pastor. Dennis Allen and Stanley Mozee spent 14 years in prison. The two were freed in 2013 after a new district attorney examined the case file and found evidence that had not been turned over to the defense attorneys. Jackson, who retired in 2013, said he is innocent of the claims against him but will not spend his retirement savings fighting them.

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Brickbat: The Eyes of Texas


gavel_1161x653

Former, Dallas County, Texas, assistant district attorney Richard Jackson has surrendered his law license after the State Bar of Texas found he withheld evidence in a case that led to the wrongful conviction of two men in the murder of a pastor. Dennis Allen and Stanley Mozee spent 14 years in prison. The two were freed in 2013 after a new district attorney examined the case file and found evidence that had not been turned over to the defense attorneys. Jackson, who retired in 2013, said he is innocent of the claims against him but will not spend his retirement savings fighting them.

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Has Our Criminal Justice System Gotten Better Since George Floyd’s Death?


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A year since George Floyd’s death launched the nation into a summer of protests and calls for police reform, Matt Welch, Katherine Mangu-Ward, Peter Suderman, and Nick Gillespie reflect on changes to the criminal justice system since then, on The Reason Roundtable.

Discussed in the show:

0:26: Are we better off in criminal justice since George Floyd’s killing?

27:42: The big conservative backlash against “critical race theory.”

33:00: Weekly Listener Question: Let’s say Justin Amash gets elected president in 2024. Who goes in his cabinet? What libertarians are out there with the policy expertise and political experience to hold high appointments like that?

45:52: Media recommendations for the week.

This weeks links:

Send your questions to roundtable@reason.com. Be sure to include your social media handle and the correct pronunciation of your name.

Today’s sponsors:

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Audio production by Ian Keyser.
Assistant production by Regan Taylor.
Music: “Angeline,” by The Brothers Steve.

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