JUDGE STANLEY SPORKIN? THE FORMER SEC ACTIVIST IS UNFIT FOR THE FEDERAL BRANCH

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00965R000200790002-5
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 2
• Document Creation Date: December 22, 2016
• Document Release Date: January 17, 2012
• Sequence Number: 2
• Publication Date: November 4, 1985
• Content Type: OPEN SOURCE

Declassified in Part - Sanitized Copy Approved for Release 2012/01/17: CIA-RDP90-00965R000200790002-5
' T ' y'EARED
BARRON'S
4 November 1985
FILE (i 4
EDITORIAL COMMENTARY
Judge Stanley Sporkin?
The Former SEC Activist Is Unfit for the Federal Bench
L IKE a multi-faceted diamond, or
perhaps more accurately a rhine-
stone, the nomination of Stanley Spor-
kin as a U.S. District Court judge for the
District of Columbia reflects a chill
light, from whichever angle it is eyed,
upon the workings of Washington. The
Senate has been eyeing it with some
reluctance, in fact, since it was first pro-
posed as long ago as June 1984. Last
week, the Judiciary Committee took the
unusual step of holding closed sessions
on it. More are planned.
Faithful readers will remember Bar-
ron's long-time complaints about Spor-
kin's rampaging reign (1974-1981) as
head of the Division of Enforcement at
the Securities and Exchange Commis-
sion, where he was a career bureaucrat.
After President Reagan's election, the
transition team inquiring into the SEC
actually recommended that Sporkin be
removed. But in the event this feat was
achieved by the unexpected means of a
summons to be general counsel to the
Central Intelligence Agency from its
new Director, William J. Casey, a key
Reagan backer who briefly headed the
SEC during the Nixon Administration.
Now Casey is the prime mover in Spor-
kin's elevation to the federal bench.
Opposition to Sporkin springs from
several sources. The Senate Judiciary
Committee's closed sessions are focusing
on serious allegations of impropriety in
Sporkin's conduct at the CIA. But no
investigation, other than a simple in-
spection of the public record, is needed
to determine that the likelihood of
"Judge" Sporkin contributing to the Ad-
ministration's professed objective of
curbing judicial activism-what Presi-
dent Reagan recently condemned as the
tendency to view courts as `vehicles for
political action and social experimenta-
tion"-is not merely remote, but also
absurd. On several counts, his nomina-
tion would be a travesty of justice.
To begin with, something distinctly
peculiar does seem to have happened at
the CIA. In 1984, Charles E. Waterman,
a deputy chairman of the National Intel-
ligence Council who directed analyses of
Middle Eastern affairs, left the agency
after allegedly leaking classified infor-
mation to commercial interests. The
Peter Brimelow is a contributing editor of Banor's.
Committee is looking into allegations
that Sporkin shielded Waterman from
prosecution and even arranged counsel
for him. The Committee is also said to
be investigating whether this was done
at the behest of Casey personally, rather
than in pursuit of some CIA purpose.
'the relationship between Casey and
Sporkin has always appeared improba-
ble. Casey, whatever else can be said
about him, is an outspoken conservative,
as well as a practicing capitalist who has
been involved in several lawsuits. Spor-
kin, although registered as an indepen-
dent, is generally viewed as a liberal
Democrat. As late as February 1980, he
was publicly denouncing criticism of
government regulation and calling for
"new Naders." His views on this subject
take on a grim significance now because
the District of Columbia court is where
federal regulatory bodies frequently
bring their legal actions.
A common explanation of the
Casey-Sporkin entente is that it goes
back to the days of Watergate, when
Sporkin is supposed to have advised
Casey to resist White House pressure
over the investigation of Robert Vesco,
thus sparing him from the disaster that
overtook the next SEC chairman, Brad-
ford Cook, who was compelled to resign.
According to agency documents re-
leased to the Center for National Secu-
rity Studies, obtained in response to re-
quests under the Freedom of Informa-
tion Act, Sporkin seems to have spent a
remarkable amount of his time at the
CIA on matters relating to Casey and
securities law. There has been prolonged
controversy over the director's pro-
tracted attempt to continue trading his
portfolio rather than putting it into a
blind trust, which he finally did in 1983,
and over his holdings in companies with
CIA contracts. Casey has been quoted
expressing anger over the underlying in-
nuendoes: "Theoretically, I could make
money [with information obtained
from] the CIA, but the idea that I did is
crap. It's hogwash."
Senate Democrats have shown inter-
est in exploiting the Sporkin hearings to
further their campaign against Casey,
but it is noteworthy that the strongest
opposition to the nomination comes
from conservative Republicans, despite
party loyalty and Casey's formidable
reputation for vengefulness. Some of
this can no doubt be attributed to
disquiet over Sporkin's answers to ques-
tions designed to elicit his attitudes to
social issues like school prayer and abor-
tion.
Sporkin's nomination also met resis-
tance within the Justice Department, so
strong as to require Casey's influence
with the White House to overcome. One
objection was to Sporkin's limited trial
experience. This is viewed as a serious
impediment for a district court judge,
who must actually deal with the sweaty
litigants filtered out at the more rarified
appellate level. At the SEC, Sporkin's
strategy was to avoid litigation in favor
of negotiating consent decrees. It is easy
to find negative comment on his en-
forcement team's trial performance from
other attorneys ("most of them don't
know basic courtroom etiquette," one
prominent member of the securities bar
told a business weekly, "let alone how to
lay in a proper line of questioning") and
judges ("not clearly established or artic-
ulated," said federal Judge Edward
Weinfeld, in denying the SEC's motion
for preliminary injunctions in the Petro-
funds Inc. case).
Another factor the justice Depart-
ment normally weighs is temperament.
Again, there is no difficulty in finding
stories of a choleric, despotic disposition,
albeit revealed fully only to subordi-
nates and the targets of SEC investiga-
tions. One source even claims that Spor-
kin has the disconcerting habit of shut-
ting his eyes when confronted with
unwelcome argumentiStill, justice, af-
ter all, is supposed to be blind.
Declassified in Part - Sanitized Copy Approved for Release 2012/01/17: CIA-RDP90-00965R000200790002-5
 Declassified in Part - Sanitized Copy Approved for Release 2012/01/17: CIA-RDP90-00965R000200790002-5
However, the fundamental objection
to Sporkin must be his behavior at the
SEC. It is crucial to note that this is not
a matter of his operating within the
framework of an institution which Bar-
ron's quirkily happens to consider
wholly misconceived. The point is that
Sporkin consistently and aggressively
went beyond the official framework, us-
ing interpretations of the law that he at
various times described as "innovative"
and "creative." This is precisely the
mark of the judicial activist, rationalized
in exactly the language of judicial activ-
ism. Sporkin's innovations were so cre-
ative that civil libertarians like Monroe
Freedman came to believe that they en-
croached on the constitutional rights of
his victims. Once when challenged on
this score, Sporkin, according to Emory
University's Professor Henry G. Manne,
angrily replied that "these are the fat
cats we're dealing with!"
Former SEC Commissioner Roberta
Karmel, in her discreet but devastating
Regulation by Prosecution, provides tell=
ing details of Sporkin's "creativity" up
to 1980. During this time span, when
he effectively dominated the agency, it
made a vigorous effort to conscript the
legal and accounting professions into
serving as SEC auxiliaries in monitoring
their clients; to impose upon public com-
panies various nostrums of the Naderite
"corporate governance" movement,
such as federal licensing of directors; to
reform the foreign marketing practices
of American business; to federalize cor-
poration law; and to increase SEC con-
trol over the municipal bond market.
Expanding the concept of insider trad-
ing and stiffening the regulation of in-
vestment letters might also be cited.
The SEC's basic tool was "innova-
tive" litigation. After 1975, the Commis-
sion was increasingly rebuffed, often in
very harsh terms, by courts which were
less inclined to read into the statutes
whatever it wanted. This trend, in turn,
enhanced the attractiveness of negoti-
ated consent decrees, since fine points of
law could be swamped by the SEC's
political power, notably its influence
with a shamefully, adulatory press.
When Roberta Karmel persisted in ar-
guing about the legal merits of one case,
there was a "verbal explosion" from
Sporkin: "I don't know why you care so
much about what the courts will think
and not about what I think."'
After 30 years of u,precedented ju-
dicial imperialism, in which judges have
unilaterally imposed radical reforms in
areas as diverse as racial quotas, capital
punishment and legislative apportion-
ment, it is scarcely surprising that many
Americans regard judges as a species of
legislator, and increasingly demand that
they submit to litmus tests like abortion.
In a little-noted parallel development,
some power-hungry law professors have
declared that "strict construction," stick-
ing to the letter of the law and the
intention of its framers, is an impossible
ideal, and thus that liberalism should
come to be regarded as the law of
the land instead. Harvard's Lawrence
Tribe has even proposed that no Su-
preme Court nominee be confirmed un-
less he agrees with the Roe vs Wade
decision legalizing abortion-sort of an
Ivy League litmus test.
This is like history professors saying
that, because objectivity is impossible,
we are all free to lie-and that our lies
should be liberal lies. Without judicial
restraint, there can be no government of
laws. Jurisprudential philosophy should
be the center of the Senate's confirma-
tion process. By this standard alone,
Sporkin's nomination is a reproach to
the Administration. It should be allowed
to die with the Christmas recess, and
Sporkin dispatched to the lucrative pri-
vate practice which, in a naughty world,
surely awaits him.
-Peter Brinselow
Declassified in Part - Sanitized Copy Approved for Release 2012/01/17: CIA-RDP90-00965R000200790002-5