Where Industry and Security Intersect
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I am delighted to be here at my first Update Conference. I'm particularly grateful to Under Secretary Juster and Assistant Secretaries Garcia and Jochum for allowing me to share the stage with them here at the commencement of this exciting event B and more generally to Under Secretary Juster and the Commerce Department's General Counsel Ted Kassinger for offering me the opportunity to serve as Chief Counsel.
I'm very excited about the prospect of working closely with Ken, Mike and Jim, and the rest of BXA, in confronting the challenging task of designing and administering a system of export controls that meets the United States' needs in the 21st Century. In their remarks this morning, they've given you a good sense of what some of those challenges are, especially in light of the events of September 11, and it's not my intention to duplicate their comments.
Instead, I would like to address two issues near and dear to my heart, as the chief legal advisor to the Under Secretary and the Bureau
Let me start with a word about my background. Until two months ago, I was in private practice B like a number of you are, I suspect B at a large D.C. law firm. Like yours, my practice was largely a federal administrative one B representing large corporations in various types of regulatory proceedings principally before federal agencies. And, like a number of you, I spent many an hour painstakingly crafting applications, pleadings or submissions, wondering, I'll confess, whether the legal arguments we made or the authorities we cited really made any difference or whether the agency decision wasn't, at the end of the day, going to be a "policy" B or, worse still, a "political" B call. There were instances where I was confounded by agency decisionmaking and, even on occasions, despaired of the actions of "lawless" executive branch agencies. I was particularly skeptical where the deciding agency was charged with the protection of the United States' national security -- an area in which the courts have historically been reluctant to second guess agency decisionmaking.
My experience over the past two months at BXA has convinced me beyond a doubt that, in this agency, in this Administration, legal arguments B and the law more generally B do matter; indeed, they matter enormously. They matter in determining what regulations to issue, what policies to pursue and what licenses to issue; they matter in our decisions of how we should communicate with Congress, the courts, and other agencies; and they matter in deciding what cases to prosecute and what penalties to impose.
Words are freighted with meaning, of course, and no word more so than "the law." What do I mean, in this context, by "the law"? First, of course, I mean the Export Administration Regulations. I also mean the presidential orders, the statutes, and the international treaties underlying them. I mean the caselaw that guides our promulgation, interpretation and enforcement of regulations. And finally, I mean the Constitution and, in particular, two bodies of Constitutional law B first, the articles that prescribe our democratic processes (including what duties BXA, as an executive branch agency, owes to the Congress, the courts, and the public) and second, the personal rights and liberties that the Constitution guarantees to all Americans. Lest anyone think these are abstractions that you learn about in high school civics courses and have little bearing on such a relatively specialized and established area as export controls, let me disabuse you of the notion: in just my first two months as Chief Counsel, constitutional issues have emerged repeatedly in the promulgation and application of specific regulations. For example, as we have considered how to enforce controls on encryption, First Amendment's protections of free speech and free association have been prominent. In deciding how to charge multiple violations of the EARs, the Eighth Amendment's protection from excessive punishment has guided our decisionmaking. And in contemplating changes to the Entity List, Fifth Amendment due process concerns have been relevant.
Above all else, it is my job and the job of the Office of the Chief Counsel to ensure that BXA acts consistently with this complex body of law. I should pause here to note that the Office of the Chief Counsel is, in fact, outside the BXA organization (we are a branch of the Department's Office of General Counsel) and that, with the sole exception of the Chief Counsel position, it is nonpolitical. The Office I supervise is composed of approximately 15 career civil service lawyers who have advised both Republican and Democratic administrations. Their commitment is to ensure that the agency acts in conformity with the law.
It is a commitment, I've discovered, that is shared by all of BXA's management. At the risk of scaring you all B please don't run for the exits! -- you should know that you are surrounded by lawyers. Ken, Jim, Mike B as well as Jim's and Mike's deputies, Matt Borman and Lisa Prager, and our Director of Congressional Affairs, Catherine Willis, and many others at BXA B are lawyers. Really good lawyers. Now there's a bad side and a good side to all this. The bad side is that it's not nearly as easy to bluff; no one asks lawyers harder questions than other lawyers. So a suggestion to all of you who may be called upon to submit arguments to the Bureau orally or in writing: make sure they are legally well-supported, well-reasoned, and well-presented because those arguments will be considered carefully and they will be tested. The good side is that, throughout the management of this organization, there is a sophisticated understanding of, and unwavering commitment to, the law and to the importance of "getting it right legally." At the clear direction of Ken, Jim, and Mike, the Chief Counsel's office has been charged with helping to draft, promulgate and interpret regulations, helping to design and monitor Bureau processes, reviewing all significant Bureau correspondence and work product, and reviewing every administrative enforcement action BXA brings or penalty it imposes. Our Office has also been involved in actively involved in counseling BXA with respect to the export control policies that this Administration will seek to implement. Needless to say, this commitment to keeping their lawyers involved makes my job easier and more rewarding.
Now, I do not mean to suggest that a commitment to act consistently with the law makes decisionmaking is either easy or rote. In some cases, how "the law" applies will be subject to dispute -- recently, for example, we have had to consider in several cases whether, given the specific facts of that case, a transshipment constitutes an export or a reexport. And on some issues, what the "law" is simply is not clear B reasonable men and women may, in good conscience, differ on, for example, the question of what restrictions does the Fifth Amendment place on restraining shipments?
Nor, by stating that BXA is firmly committed to acting in accordance with "the law," do I mean to suggest that this agency will necessarily adopt the most "conservative" interpretation of the law where several interpretations are defensible. That, in my view, is a prescription for agency paralysis as well as an abdication of our job to help push the law forward -- to help it evolve. Indeed, in several respects, I believe that it is incumbent upon us, and in particular, the Chief Counsel's office, to help "move the law forward." For example, I think that those of you who work with the EAR on a daily basis will agree that, even after the efforts to redraft and reform the EARs in the 1990s, the regulations remain complex, at times less than clear and at times less than consistent. Making this body of law generally less complex, more consistent and more clear is one of the specific goals that I bring to this job. Another specific goal is to help the law "move forward" in the area of catch-all controls. These controls, which have evolved in a rather ad hoc manner since they were first introduced in the early 1990s, need to be revisited to ensure that they are functioning in a way that satisfies both the United States' foreign policy and national security needs, while not needlessly burdening American industry. In this regard, I should note that Under Secretary Juster has asked our office to take the lead in a review of EPCI controls.
What I do mean, when I speak of this Administration's "commitment" to the law, is that, in undertaking these and other initiatives, this Bureau and my office will place a high priority on ensuring that legal rights are respected and legal processes adhered to, even in times of crisis.
Which brings me to the second topic B the fear that, in the post-September 11 export control world, "legal niceties go out the window." Certainly, I understand that fear. Legal processes are most easily observed during times of peace. And, although our history is, relatively speaking, remarkable for the government's preservation of civil liberties during national crises, it is not an unblemished history. Accordingly, in the wake of any national crisis, Americans are acutely sensitive to whether the Government's response will result in legal rights and processes being compromised. One sees this concern, for example, in the comments of the media, and of some in Congress, to the Administration's recent efforts to strengthen the Government's ability to bring to justice and to cut off the financial resources of those who commit terrorism. It is a good and healthy concern.
Ultimately, however, I believe that in this case, the fear is ungrounded. Simply stated, I believe that all three branches of American Government have become acutely sensitive to these issues. So much so, that, I would submit, concern for legal processes and rights becomes enhanced following national crises. Thus, for example, the reaction to those who have questioned the constitutionality of enhanced authorities for combating terrorism -- quite modest measures in the grand scheme of things -- has not been to disregard or castigate them for "getting in the way of national security"; rather it has been to take the concerns very seriously and to devote substantial resources to considering to them, indeed, more resources than they might have merited in the absence of September 11.
However, while I am confident that Government will be acutely sensitive to the unintended consequences of actions taken in response to the events of September 11, let there be no doubt that those events will have an effect on U.S. and foreign governmental policies. The events were a stark reminder that the "globalization" that we have witnessed for the past decade -- facilitated by the opening of markets, freer flows of capital and labor, and technological improvements -- is not without its risks and enemies. The events furnish a powerful rejoinder to those who would argue that we have reached the "end of history" -- a "new world order" in which concerns about national security have diminished relevance. With respect to export controls particularly, if there was any doubt of the need for such controls, the events of September 11 put them to rest. As devastating as the tragedy of September 11 was, one dreads to contemplate what terrorists could do if they had access to controlled U.S. items and technology.
In short, the events of September 11 must heighten our -- both Government's and industry's -- resolve in administering and enforcing an effective system of export controls. As Ken noted in his speech, a strong and effective system of export controls is a necessary prerequisite and a buttress for free trade, and, as such, should be welcomed by industry. It is critical that industry and government work together to ensure that access to goods, technology and resources be cut off to those who would seek to destabilize free trade and open markets.
For this to occur, we recognize, industry and the public must be confident that export control policies and regulations are being applied fairly, judiciously and even-handedly. The industry and the public must be confident that they are being imposed consistent with the law. The more critical the controls, the greater the need for such confidence. In short, accomplishing our mission fundamentally depends upon you having confidence that the rule of law remains in the application of controls. It is our goal to ensure that that confidence never waivers.
In conclusion, I would simply like to say that I look forward to working with you all in building a better export control system for this challenging era before us. There are some who believe that government lawyers must inevitably have an adversarial relationship with industry and the private bar. I do not share this view, and I am delighted to say that this is not the view that has been adopted by BXA or the Chief Counsel's office before my arrival. Although the Chief Counsel's office is a small one with a considerable amount on its plate, I'm proud that these lawyers have been wonderful representatives of the agency, answering many inquiries each day from industry, participating in bar and public educational events, and working with lawyers and representatives from other countries in building their export control systems. It is my strong intention that this continue. Similarly, except in the rather rare situation where ex parte contacts are prohibited, our doors are open to meeting with you. I fully recognize that the government holds no monopoly on good and creative legal thinking, and I welcome hearing your ideas and views. Through such dialogue, I would hope not only to arrive at better outcomes and a better export control system, but also to strengthen your confidence in our government.
Thank you.
In April of 2002 the Bureau of Export Administration (BXA) changed its name to the Bureau of Industry and Security(BIS). For historical purposes we have not changed the references to BXA in the legacy documents found in the Archived Press and Public Information.