When, why, and how does a firm decide to invest its resources in political capital? What factors inform the firm’s decision to lobby political bodies? How important is the resulting durability of law in making this calculus? Although these questions have been largely unanswered in the legal literature, they are fundamental to a complete understanding of public choice theory. Using Articles 3 and 4 of the Uniform Commercial Code as a framework for examining these questions, this Note identifies four threshold inquiries each firm must answer before engaging in political investment. It then develops those factors that a firm may consider in estimating its return on political investment (ROPI). A puzzle emerges, however, when one considers the default nature of the U.C.C. Economic theory and the right to contract suggest that the ex post distribution of such terms will achieve general equilibrium regardless of their ex ante value. Without ex post legal durability in the form of mandatory rules, it is difficult to imagine just how commercial banks are capable of harnessing long-term permanent returns from their political investment in the U.C.C. While the current legal literature simply assumes that banking interests can harness a non-negative return on political investment, this Note relies upon behavioral economics and the notion of bounded rationality to conclude that private banking interests are likely to capture a positive ROPI, even where default rules with seemingly little durability govern their contracts. In arriving at this conclusion, it first identifies the political investment threshold inquiries a firm must answer prior to contributing capital to a political investment, as well as the substantive returns that firms are likely to realize as a result.
Note
An Argument for the Partial Abrogation of Federally-Recognized Indian Tribes’ Sovereign Power Over Citizenship
For many Native Americans, membership in a federally-recognized Indian tribe represents an affiliation as fundamental as American citizenship to Americans generally. Tribes are not only crucial conduits of economic and social services, but also tangible and vital connections to ancient racial and national affiliations. Yet as important as they are, in most tribes these connections may be summarily severed without appeal.
Unlike either the state or federal governments, most Indian tribes retain the right to disenfranchise members from specific benefits, or simply to disenroll (forcibly expatriate) and banish from tribal lands even native born members. Federal case law suggests that these abuses are almost wholly irremediable both within the tribe and in the federal courts. Despite strong arguments to the contrary, the federal courts have consistently held that the powers provided to them under the Indian Civil Rights and Indian Gaming Regulatory Acts are essentially incapable of reaching tribal membership disputes.
This is not just an issue that affects scattered individuals. The nature of expatriation power is such that even if unexercised, it has the potential to significantly curb the political life of the tribe. Even a small number of instances can educate a large population on the costs and benefits of political dissent. Thus it is not just Indians as individuals who suffer when tribes abuse citizenship rights, but the tribe as a whole, as well as the legitimacy of the federal-Indian system of which it is a part. The power to disenroll removes from tribes the democratizing burden of working to compromise, stifling the development of populist values and participatory government. This Note first describes the historical and jurisprudential background of tribal citizenship, before arguing on the basis of individual civil rights and tribal republican development that the federal-Indian system would be well-served by affirmative Congressional action to remove from tribes the power to disenroll, disenfranchise and banish their members.
Solving the Extraterritoriality Problem: Lessons from the Honest Services Statute
The presumption against extraterritoriality is a canon of statutory interpretation that directs courts not to apply ambiguous domestic statutes to conduct that occurred abroad. Since articulating the basic elements of the presumption in its 1991 Aramco decision, the Supreme Court has applied and expanded the presumption in a fragmented manner, muddling the doctrine to the point of thwarting its usefulness as a canon of statutory interpretation.
In the wake of Aramco, commentators discussed the proper scope of extraterritoriality doctrine, but much of this debate has since fallen silent. This Note seeks to revitalize the doctrine by identifying situations that courts recognize should trigger the presumption, and by suggesting how to modify the doctrine within the framework of existing Supreme Court cases so that the doctrine encompasses these situations. Appropriately addressing extraterritorial applications of statutes is increasingly important as the U.S. Government prosecutes foreign crimes more and more aggressively.
This Note identifies two main problems with the currently unclear state of extraterritoriality doctrine. First, the doctrine fails to provide courts with the proper tools to avoid creating foreign law without explicit permission from Congress. Second, the current doctrine unsettles the balance of powers between the United States and foreign sovereigns, and among the branches of the federal government. The recent case of United States v. Giffen illustrates these two problems. This Note argues that the presumption should go beyond the Aramco framework and incorporate more recent Supreme Court decisions. It should direct courts to examine whether individual statutory terms and the general nature of the criminal statute are extraterritorial, presuming that Congress intends for statutory terms to apply domestically and for U.S. courts not to create foreign law.