outline public debt & ss complaint---draft 08-17-2011

8/4/2019 Outline Public Debt & Ss Complaint---draft 08-17-2011

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Outline and Background for Complaint on the Public Debt Clause & Social Security

August 17, 2011

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OUTLINE AND BACKGROUND FOR COMPLAINT:IS CONGRESS IMMUNE FROM SUITS

TO QUESTION THE VALIDITY OF THE PUBLIC DEBTOF THE UNITED STATES

Charles Edward Lincoln, III, August 17, 2011

The primary purpose of this lawsuit is to seek a declaratory judgmentconcerning the following controversy regarding the interpretation orconstruction of the Constitution: does the immunity from suit afforded tomembers of Congress by 6:3 of Article I extend to actions which questionthe validity of the public debt of the United States under 4:1 of theFourteenth Amendment? The reason for this question is the parallelinclusion of the phrase shall not be questioned in both clauses, togetherwith the inference that these two exactly equivalent negatives, in clauses

specifically regarding the power of Congress to appropriate, borrow, andspend money, must be read together to cancel each other out, yielding a

positive waiver on immunity.Title 28 U.S.C. 2201(a) makes the remedy of declaratory judgment

in the United States District Courts as follows:In a case of actual controversy within its jurisdiction, exceptwith respect to Federal taxes . . . any court of the United States,upon the filing of an appropriate pleading, may declare therights and other legal relations of any interested party seekingsuch declaration, whether or not further relief is or could besought. Any such declaration shall have the force and effect of afinal judgment or decree and shall be reviewable as such.The case of actual controversy to be framed would start with the

question of pure constitutional construction as stated above, which can be paraphrased and restated, Can members of Congress be sued, under theFourteenth Amendment, for undermining the binding force of obligationsassumed by Congress through lawful actions?

While there is no question that this is a Federal question involving theConstitution over which U.S. District Courts would have jurisdiction under

28 U.S.C. 1331, the early disposition of the case will turn on the closelyrelated doctrines of standing and justiciability as defined and refined bythe Supreme Court of the United States in almost countless decisions, withthe issue coming up in one form or another almost every year.

Standing requires that a defendant have a direct stake or personalinterest in the outcome of decision of any case or controversy. Under all


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common law doctrines and most statutory constructions of insuranceobligations or trusts, the lawfully vested beneficiaries of Social Securityand Medicare all have a direct stake and personal interest inCongressional management of the Social Security Trust, which is set up andmaintained by the Executive Branch of the U.S. Government with all thetrappings and appearance of a genuine, valid common law trust.

A TRUST FUND IN NAME ONLY: A VERY ELABORATE HOAXChief among these outward and visible signs belying an inward and

material lack of competence or corpus to this trust is that the Social SecurityTrust is nominally administered by a Trust Committee currently consistingof Timothy F. Geithner, the Secretary of the Treasury, Kathleen Sebelius,the Secretary of Health and Human Services, Hilda L. Solis, the Secretary ofLabor, Michael J. Astrue, the Commissioner of Social Security, Carolyn W.Colvin, the Deputy Commissioner of Social Security, and two additional

trustees Charles P. Blahous, III, and Robert D. Reischauer.These trustees, like all fiduciary managers of trusts, are required by

law and do in fact render an annual report on the management of the trustestate, which was made available this year under the title, "The 2011

Annual Report of the Board of Trustees of the Federal Old-Age andSurvivors Insurance and Federal Disability Insurance Trust Funds,"which is available on-line, signed by the Trustees, at:http://www.ssa.gov/oact/tr/2011/tr2011.pdf. Like any private insurance

program, this Trustees report is prepared according to actuarial principles bythe Social Security Office of the Chief Actuary whose website is:http://www.ssa.gov/oact/index.html.

The key difference between this apparent or de facto trust and anormal trust administered by a bank, insurance, company, or privatetrustee of any kind, is that these trustees actually have no control whatsoeverover the Trust Corpus of Social Security, which is entirely at the dispositionof Congress. In other words, there is in fact no Social Security Trustwhatsoever, but only an empty structure with a name and fancy paperworkto maintain the appearance of a trust. The Social Security Trust, properlyanalyzed under Anglo-American common law, could accordingly only be

characterized as a massive fraud, one of the largest frauds in the history ofthe world in fact. The total amount paid into Social Security between 1937-2009 was $13.8 trillion (according the official history of the Social SecurityAdministration at http://www.ssa.gov/history/hfaq.html).

Under any normal trust or private insurance company, every dime ofthis $13.8 trillion SHOULD be subject to fiduciary accounting regarding its


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investment, management, and distribution to individual beneficiaries, but notone page of such competent accounting could ever be produced becauseSocial Security has never actually been managed as a trust. Theaccounting that is available appears to be an epic tale of self-dealing.

To begin with, the creation of the Social Security Trust Fund itself in1939 was, like the creation of a powerless Trust Committee discussedabove, merely a declaration of trust in name only, in that it did not follow the

procedures for creation of a trust fund by originating or delivering anyinitial trust corpus from the taxes designated as Social Security Taxes. Thegovernments own Social Security Administration website explains it asfollows:

So the payroll taxes were just credits in the Social Securityaccount on the Treasury's ledger under the initial law.The investment rules governing payroll tax income were also

established in the 1935, and are essentially the same ones in usetoday. Specifically, the 1935 Act stated: "It shall be the duty ofthe Secretary of the Treasury to invest such portion of theamounts credited to the Account as is not, in his judgment,required to meet current withdrawals. Such investment may bemade only in interest-bearing obligations of the United States orin obligations guaranteed as to both principal and interest by theUnited States." (See Title II, Section 201of the 1935 law)In the 1939 Amendments, a formal trust fund was establishedand a requirement was put in place for annual reports on theactuarial status of the fund. Specifically, the law provided:"There is hereby created on the books of the Treasury of theUnited States a trust fund to be known as the 'Federal Old-Ageand Survivors Insurance Trust Fund'. . . . The Trust Fund shallconsist of the securities held by the Secretary of the Treasuryfor the Old Age Reserve Account on the books of the Treasuryon January 1, 1940, which securities and amount the Secretaryof the Treasury is authorized and directed to transfer to theTrust Fund, and, in addition, such amounts as may be

appropriated to the Trust Fund as herein under provided." (TitleII, Section 201a)

In other words, a formal trust fund was established forthe Social Security program and the credits already on theTreasury's books for the Social Security program were to be


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transferred to this Fund, along with all future revenues raisedfor the program.

http://www.ssa.gov/history/BudgetTreatment.html Research Note # 20: TheSocial Security Trust Funds and the Federal Budget by Larry DeWitt.

You have to read carefully here: there is hereby createdon the booksa trust fund to be known as The Trust Fund shall consist of the securitiesheld by the Secretary of the Treasury for the Old Age Reserve Account onthe books of the Treasury on January 1, 1940, which securities and amountthe Secretary of the Treasury is authorized and directed to transfer to theTrust Fund, and, in addition, such amounts as may be appropriated to theTrust Fund as herein under provided. NO MONEY WAS EVERTRANSFERRED FROM ONE FUND INTO ANOTHER EXCEPT ONTHE BOOKS OF THE SECRETARY OF THE TREASURY. Theconclusion of Mr. DeWitts 2005/2007 report cited above states:

Summary-So, to sum up:1- Social Security was off-budget from 1935-1968; 2- On-

budget from 1969-1985; 3- Off-budget from 1986-1990, forall purposes except computing the deficit; 4- Off-budget forall purposes since 1990.Finally, just note once again that the financing proceduresinvolving the Social Security program have not changed in anyfundamental way since they were established in the originalSocial Security Act of 1935 and amended in 1939. Thesechanges in federal budgeting rules govern how the SocialSecurity program is accounted for in the federal budget, nothow it is financed.

Research Note #20, cited above.What Congress has done is to increase general taxes and revenue in

the name of Social Security and then directed the Secretary of the Treasuryto buy Government Treasury Bonds (thats right, they directed the Secretaryof the Treasury to buy his own bonds) and carry this on the books as theSocial Security Trust. In other words, Social Security, ab initio has been

funded exclusively by government-issued, government-purchased debtrather than government equity or outside investment bringing real moneyINTO the government (as would result from a public issue of Treasury

bonds, which are normally quite marketable, in fact, considered primeinvestments---at least until the recent downgrading of U.S. debt after the


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August 2, 2011 budget compromise approved by Congress and PresidentBarack Hussein Obama).

It is doubtful whether a single dime of social security tax revenues hasever been used to buy a single one of this governments bonds deposited intothe Social Security Trust Fund. If any such dime has ever been so used, it isimpossible to discern it from the record available to us at the present time.

No Segregation of Trust Corpus, No Initial Delivery of AnythingOne proper way for Congress to create a trust, especially an

participant-based insurance trust, would have been to order the fundsreceived by the IRS marked Social Security Taxes to be segregated anddeposited into a special account or set of accounts and invested in income

producing and/or blue chip appreciable securities, according to ordinaryfiduciary standards of accounting. There may be other ways Congress couldhave created a valid trust, but it did no such thing. Apparently there USED

to be marketable treasury bonds included in the Social Security Trust Fund,but please note that for the Government to invest in its own bonds is just avery polite way of saying that the Government was printing money intoexistence and using those funds to purchase the non-marketable treasuries(non-marketable means, among other things, that no one outside the U.S.Government WOULD buy them, even if they could).

NO marketable securities are currently held as part of the SocialSecurity Trust Fund, but only Special Obligations of the TreasuryDepartment---issued perhaps how and to whom? By the Government toitself because nobody else would buy them? This again is no idle orignorant accusation, but is information provided on the Social SecurityAdministrations own website: http://www.ssa.gov/cgi-bin/investseries.cgiwhich website showed the Social Security Administrations holdings as ofAugust 17, 2011 (the day on which this outline was written).

The story of how this happened has never been concealed from thepublic and is in fact easily available, even if probably very few people in theUnited States understand the significant reality that THERE NEVER HASBEEN A SOCIAL SECURITY TRUST FUND in the ordinary Anglo-American common law sense utilized throughout England & Wales,

Scotland, Ireland, all 50 states (Louisiana Civil Law Trust Code differs in nomaterial way in its treatment of fiduciary obligations), Canada, Australia,

New Zealand, Jamaica and all of the former British West Indies (includingtax-havens like the Bahamas, Barbados, Belize, the Cayman, and VirginIslands), and the Republic of South Africa.


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The earliest sources one would look to for understanding the legalnon-Existence of the Politically denominated Social Security Trust wouldinclude the Supreme Courts case of Steward Machine Co. v. Davis,Collector of Internal Revenue, 301 U.S. 548 andHelvering, Commissioner

of Internal Revenue et al. v. Davis, 301 U.S. 619 (both decided on May 24,1937). Both of these cases described the Social Security tax as a specialincome on employees and an excise tax on employers. Both casesuphold Congressional power to enact the Social Security Statute in the nameof the General Welfare, and neither make any reference to common law

principles of trust or fiduciary accounting, or of the power of Congress tochange the terms of Social Security at will.THE LARGEST CHECKING ACCOUNT IN THE USA?

The nearest thing we have in either case to a discussion of suchmatters come in Steward v. Davis in Volume 301 U.S. at pages 594-597,

when the subject is the degree to which States surrender their quasi-sovereign powers by participation in the collection of the Social SecurityTax:

We are to keep in mind steadily that the conditions to beapproved by the Board as the basis for a credit are not

provisions of a contract, but terms of a statute, which may bealtered or repealed. 903(a)(6). The state does not bind itself tokeep the law in force. It does not even bind itself that moneys

paid into the federal fund will be kept there indefinitely or forany stated time. On the contrary, the Secretary of the Treasurywill honor a requisition or the whole or any part of the depositin the fund whenever one is made by the appropriate officials.The only consequence of the repeal or excessive amendment ofthe statute, or the expenditure of the money, when relinquished,for other than compensation uses or administrative expenses isthat approval of the law will end, and with it the allowance of acredit, upon notice to the state agency and an opportunity forhearing. 903(b)(c).. . . . . .

in truth there is no agreement as to the method of disbursement.There is only a condition which the state is free at pleasure todisregard or to fulfill. Moreover, approval is not requisite if

public impoyment offices are made the disbursing instruments.. . . . .


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All that the state has done is to say in effect through theenactment of a statute that her agents shall be authorized todeposit the unemployment tax receipts in the Treasury atWashington The statute may be repealed. 903(a)(6) Theconsent may be revoked. The deposits may be withdrawn. Themoment the state commission gives notice to the depositary thatit would like the moneys back, the Treasurer will return them.. . . . . .There are very good reasons of fiscal and governmental policywhy a State should be willing to make the Secretary of theTreasury the custodian of the fund. His possession of themoneys and his control over the investments will be anassurance of stability and safety in times of stress and strain . . .

Nor is there risk of loss or waste. The credit of the Treasury is

at all times back of the deposit, with the result that the right ofwithdrawal will be unaffected by the fate of any intermediateinvestments, just as if a checking account in the usual form had

been opened in a bank.

The last line quoted above, from 301 U.S. 597 of Justice BenjaminCardozos opinion, says it all: the Social Security Trust Fund should beregarded as an open access checking account from which parties who

are neither intended trustees nor designated nor contributing

beneficiaries could withdraw. That fact alone probably explains why theFederal Government has for seventy five years felt so very free to engage inthe on-budget/off-budget manipulation of the receipts of Social SecurityTaxes as described in DeWitts summary quoted above.

To call a massive program for the collection of money from the people a Trust and then structure it by statute in such a way that theSupreme Court of the United States would call it the equivalent of achecking account, should be understood both as common law fraud of theactual, neither negligent nor constructive, variety, because to declare a

property to be a Trust for individual taxpayers and their families and then

to organize it as a checking account on which multiplicity of governmentalagents can draw constitutes an intentional misstatement of a material factmade with the intent to induce reliance on the part of the (taxpaying)recipient of the information.THE NEED FOR RECONSTRUCTION OF SOCIAL SECURITY AS ACONSTRUCTIVE TRUST


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Social Security is a massive fraud on the American people that hascreated a MINIMUM of a $13.8 trillion constructive trust at common law---which imposes the duties of a trustee, including the obligation to disgorgefrom his own pocket or borrow on his or her own estate or credit andgenerally to make up for deficits or deficincies in the trust, including accruedinterest, at his or her own expense.

That is how Social Security could and would be analyzed at CommonLaw. The Cabinet Level Trustees are much less culpable and liable thanCongress because they are merely accessories to the crimes of fraud andembezzlement from the taxpayers under false pretenses, it is the politicalmembers of Congress who sold the program of Social Security to the peoplewho perpetrated the fraud, with the advice and consent of the President ofthe United States to be sure. And Congress and the President havecontinued in this fraudulent scheme without rest or abatement from 1935

until the FY 2012 Budgetary Compromise reached on just over two weeksago on August 1-3, 2011.

Realizing the truth of all of the above statements makes one feelpositively sorry for poor old Bernie Madoff rotting in a Federal CorrectionalInstitution for the next 148 years over the theft or mismanagement of a(comparatively) paltry $18-$65 billion (a trillion is 1000 billions, just as a

billion is 1000 millions, and a million is 1000 thousands---numbers like 13.8trillion are readily comprehensible only to specialists in Astrophysics orgeologists who like to estimate how many grains of sand there are on all the

beaches or deserts in the world.)Under the elementary principles of common law, throughout the

United States, beneficiaries of a trust, such as an insurance policy, areentitled to an exact statement of the amount of money constituting the trustcorpus from which their benefits are or will be derived, as well as an exactestimate of how much income will be available to pay their benefits as orwhen due. In fact, as trust beneficiaries, purchasers of private insurance are,like all other trust beneficiaries, said to have a property right to theirinsurance proceeds and to information concerning the insurance corpus.SOCIAL SECURITY PAYORS ARE NEITHER TRUST

BENEFICIARIES NOR EVEN PROPERTY OWNERSBut in fact, Social Security has never been this sort of Trust Fund, nor

even this sort of checking account. Writing for the Congressional ResearchService exactly one year and one week ago, Kathleen S. Swendiman andThomas J. Nicola wrote and published, on August 11, 2010, in their Social


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Security Reform: Legal Analysis of Social Security Benefit EntitlementIssues (7-5700, www.crs.gov, RL32822) that:

The inherent ability of Congress to modify the provisions ofTitle II of the Social Security Act, even to the extent ofaffecting the benefits an individual is currently receiving, isthus well-established.

Swendiman & Nicola, pp. 1-2, citing Flemming v. Nestor, 363 U.S. 603,608-610 (1960).

And indeed, whatever illusions might have survived 1937 decisionscited above, the rights to treat taxpayer beneficial interests in SocialSecurity as property were resolved in the negative by the Supreme Courtsdecision in this fateful decision handed down in 1960 which held:

To engraft upon the Social Security system a concept of"accrued property rights" would deprive it of the flexibility and

boldness in adjustment to ever-changing conditions which itdemands. See Wollenberg, Vested Rights in Social-SecurityBenefits, 37 Ore. L. Rev. 299, 359. It was doubtless out of anawareness of the need for such flexibility that Congressincluded in the original Act, and*611 has since retained, aclause expressly reserving to it "[t]he right to alter, amend, orrepeal any provision" of the Act. 1104, 49 Stat. 648, 42 U. S.C. 1304. That provision makes express what is implicit in theinstitutional needs of the program. See Analysis of the SocialSecurity System, Hearings before a Subcommittee of theCommittee on Ways and Means, House of Representatives, 83dCong., 1st Sess., pp. 920-921. It was pursuant to that provisionthat 202 (n) was enacted.We must conclude that a person covered by the Act has notsuch a right in benefit payments as would make everydefeasance of "accrued" interests violative of the Due ProcessClause of the Fifth Amendment.

Flemming v. Nestor, 363 U.S. at 610-611. Flemming v. Nestor has been cited repeatedly and is good law,

which has been upheld and relied upon by the Social SecurityAdministration, Congress, and all other authorities up through the presenttime. See, e.g. Michael Abramowicz, Train Wrecks, Budget Deficits, andthe Entitlements Explosion: Exploring the Implications of the FourteenthAmendments Public Debt Clause. http://ssrn.com/abstract=1874746George Washington University Law School Public Law and Legal Theory


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Paper No. 575 published in 2011. The status of the beneficiarys interest insocial security as been described ambiguously (and quite legallydisingenuously) as an entitlement in most popular political dialogue, andthe question has been what sort of protections DO exist prior to thedivestiture or reduction of entitlement rights to income or payments forany kind of benefits.

DOES THE 14th AMENDMENT PREVENT CONGRESS FROMTAKING VOID OR ILLEGAL ACTIONS WHICH IMPUNE THEVALIDITY OF THE PUBLIC DEBT OF THE UNITED STATES?

We have now reached full circle in our analysis. We have posited thatthe language of the Public Debt Clause of the Fourteenth Amendmentmodifies the legislative immunity clause of Article I, 6:3 of the

Constitution of 1787. We explored the history of the Social Security Trustto make a simple point: the creation and management of that Trust in 1935-1940 and ever since has been, when analyzed at common law, a void orillegal matter of massive public fraud, breach of public trust, andembezzlement authorized by statute. The question is whether Congress andthe United States Government can be held liable under the FourteenthAmendment.

To argue in favor of such a destruction of legislative immunity is, inessence, to argue yet once again for a New American Revolution, aReclamation by the People of their Rights to Honest and Fair Dealings withGovernment and the right to Honest Services by their GovernmentalRepresentatives. But, aside from a mere sense of equity and justice, what isto recommend this course of conduct to the Courts, who would need

judicially preside over this new American Revolution, of this Reclamation ofthe Rights of the People, if they were to hear and then grant the Complaintfor Declaratory Relief Recommended above?

For Better or For Worse, the Fourteenth Amendment Altered theNature of the Relationship between the Federal Government and the

People as Well as the States and the Federal Government

First, I would cite the general context of the Public Debt Clause, theFourteenth Amendment itself. Even the most conservative of commentatorsrecognize that the Fourteenth Amendment radically altered the relationship

between the States and the Federal Government, and plainly extended at thevery least, the guarantees of due process of law under the Fifth Amendmentto all the states. Since the 1920s, the Supreme Court has held that the entire


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Bill of Rights has been incorporated to the States by the FourteenthAmendment, although the scope, meaning, breadth, and depth of eachamendment remains much debated.

Individual standing to enforce the guarantees of the Bill of Rights, asagainst the Federal Government and the States, has been universallyrecognized. More than any other amendment, the First Amendment has beencloaked with special status among all of the first ten amendments. The rightto petition for redress of grievances is clearly the most relevant of all FirstAmendment rights to the question of whether any question is justiciable incourt, and yet of all the clauses of the First Amendment it has received theleast judicial attention. Still, I would certainly invoke the very special statusof the First Amendment right to petition the Federal Government as a specialright accruing to all those who built their lives around the Governmentsfraudulent promise of Social Security and the Social Security Trust Fund

Checking Account for the Government.Several of the first ten amendments, notably the Second, Third, Ninth,

and Tenth, have received significantly less attention than, for example, theFirst, Fourth, Fifth, and Eighth. But three years ago, for the first time inhistory, the Justices ruled in District of Columbia v. Heller, 554 U.S. 570(2008), that individuals do indeed possess at least some constitutionally

protected rights to keep and bear arms under the Second Amendment. Evenmore startling, earlier this year, the Supreme Court even recognized anddeclared that individuals have standing to enforce the Tenth Amendment(which refers primarily to the States), in Bond v. United States, 564 U.S.

____ (2011).WHY ARE CIVIL RIGHTS ACTIONS IMPORTANT NOW?One of the chief vehicles for Constitutional Challenges under the

Fourteenth Amendment has been the Civil Rights Action, 42 U.S.C. 1983,1988, effectively a statutory writ or form of lawsuit for Constitutional Tortsexpressly authorized to be brought by any person injured against theofficers or agents or persons acting under color of law in any state.

It is critical to realize two things about 1983 & 1988, one is that1988 specifically incorporates the common law forms of action and

remedies as supplemental to those expressly authorized by statute against allstate officers.

The second is that, as amended in 1996, 1983 & 1988 (just like theFourteenth Amendment as here interpreted) somewhat surreptitiouslycodified the United States Supreme Courts holding inPulliam v. Allen 466U.S. 522 (1984) reduced the threshold for judicial immunity from situations


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where action [was] taken in the complete absence of jurisdiction to thosewhere action was clearly in excess of such officers jurisdiction. See also1996 USCCAN 4216-4217. The 1996 amendments were proposed by thelate Senator Strom Thurmond, who had waited for most of his lifetime toreduce Judicial Immunity in the aftermath of his various quarrels with ChiefJustice Earl Warren.

42 U.S.C. 1981-1982 and 1983-1988 were all originally enacted bythose same 39

th-40

thCongresses of the Reconstruction period (1865-1869)

during which the Fourteenth Amendment was drafted, adopted, and began tobe implemented. The creation of the first Equal Rights Statutes for CivilRights (1981-1982) and the Civil Rights Action itself and the debatesrecorded in the Congressional Globe (and recounted in a trio of majordecisions in the 1960s-70s 1 ) concerning the need to curtail legislative,

judicial, and executive immunities all reflect a clear consciousness that

governmental immunity and due process of law did not go hand in hand.While 42 U.S.C. 1983-1988 did not expressly authorize an action

against Federal officers parallel to the Fourteenth Amendment Zeitgeistpurposeful reduction of state autonomy and immunities, the United StatesSupreme Court found that the statute implied a similar cause of actionagainst Federal Officers in Bivens v. Six Unknown-Named Agents, 403U.S. 388 (1971)

2.

Now from a deeper historical perspective, just as the FourteenthAmendment was expressly designed to limit the power and SovereignImmunity of the individual states of the Union after the Civil War, I submitnow that the Fourteenth Amendment was also designed both to limit the

power and break down the immunity of Congress.CERTAIN DEBTS MUST NOT BE PAID

BECAUSE THEY ARE VOID AND ILLEGAL---What Limitations?According to Michael Abramowicz recent working paper on the

Public Debt Clause, cited above, the Fourteenth Amendments Public DebtClause was designed at least in part to prevent Congress from assuming

1 Dombrowski v. Pfister, 380 U.S. 479 (1965), Younger v. Harris 401 U.S. 37 (1971)and Mitchum v. Foster 407 U.S. 225 (1972)---the clearest exposition of the legislative

history is found in the last of these, Mitchum v. Foster which held that 42 U.S.C.1983, 1988 constituted an express authorization for Federal Courts to enjoin theproceedings in State Courts, as an express exception to 28 U.S.C. 2283 known as theAnti-Injunction Act.2Bivens was decided the same term as Younger v. Harris which had affirmed andconstruedDombrowski v. Pfister).


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Confederate debts, mandating that all such debts, obligations and claimsshall be held illegal and void. This was an amendatory restriction on thepower of congress over the public debt and on appropriations and spendinggranted by Article I. Indeed, 2, 3, and 4 of the Fourteenth Amendment areall designed, in one way or another, to amend Article I of the Constitutionrelating to the Congress.

In other words, if Congress had attempted to absorb or exonerate thedebt of the Confederate States of America, or the debt of any of theindividual states belonging to the Confederacy, in a manner analogous to theUnited States absorption of the total public debt of the Republic of Texasupon that states original Annexation in 1845-46. Congress would haveviolated the plain letter of the Constitution, and would might even have beenguilty of a form of treason, having given aid and comfort to theinsurrection or to the enemies of the Constitution, to paraphrase the language

of 3 of the Fourteenth Amendment.The Social Security Trust Hoax Continuing from 1935-2011

is a Void and Illegal Action which Must Be Corrected byCommon Law Principles of Disgorgement and Constructive Trust

to Preserve and Protect the Validity of the Public Debt(the Full Faith & Credit) of the United States of America

What Congress has done in the creation and management of SocialSecurity, over the past 76 years since 1935, as analyzed in this litigationoutline proposal, amounts to just as direct and plain a violation of SectionFour, Clause 1, of the Fourteenth Amendment, as undertaking to pay theConfederate Debt would have been. Under the Anglo-American CommonLaw, and indeed under the Roman Civil Law, passed down through theSpanish Empire and Napoleon to modern Europe and Latin America,including Louisiana, all such debts, obligations and claims [as interferewith the Reconstruction of Social Security as a Legitimate Trust accountableto the taxpaying contributors]sh[ould] be held illegal and void.

YEA VERILY, I SAY UNTO YOU: CONGRESS IS NOT IMMUNEYea verily, I say unto you: in 4:1 of the Fourteenth Amendment, in

the context of the balance of the Fourteenth Amendment, the Constitution

was amended to LIMIT the power of Congress and the United StatesGovernment to undertake certain debts, and to take any action such as wouldundermine the legitimate (i.e. valid) public debt of the United States.Congress and the States, in adopting the Fourteenth Amendment, made bothvalue judgments and political calls, and America decided in 1868 that theintegrity of the United States in the future depended on making a decision, a


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choice, as to which debts were valid and which were illegal and void, andboth the power and immunity of Congress were expressly and directly rolledback and limited in making this choice and decision.

Specifically, in Social Security and Medicare Congress has enacted astatute and program which would be void and illegal as a trust at commonlaw. This program has been, from the beginning largely, and now in factentirely, funded by unmarketable debt, in the form of unmarketablegovernment Treasury Bonds.

And these unmarketable government bonds were issued as a pretextfor taxing the people when the funds collected as tax were never in factactually earmarked or delivered into a separate Trust Fund at the Departmentof the Treasury or anywhere else. Social Security Credits authorized byCongress were, as stated above carried on the books of the Treasury as aseparate entity which was funded by the government borrowing from itself.

The reasons for this bizarre setup are, to this author at least, utterlyincomprehensible, except that Congress wanted to use the funds received intaxes as an open-ended checking account while not actually investinganything other than unmarketable securities in the actual endowment ofSocial Security. This is classic funny money economics, except that theinflationary consequences and injury to the honor, full faith and credit ofthe United States are almost incalculable.

Congress neither authorized nor permitted any actual segregation of aSocial Security or Medicare trust corpus. Social Security tax revenue hasapparently always and invariably been mixed and factually maintained as

part of the national budget with all other income tax revenue whether carriedon PAPER as off budget or on-budget. So at the very best the peoplestaxes and contributions paid in good faith reliance were comingled with allother government revenue funds, and treated as a national checking accountrather than a trust account, and this was an embezzlement and a fraud in theinducement as well as a breach of fiduciary duty and a denial of theintangible right of the people to honest services (see below).

In private trust operations, the known identity of a trustee or group oftrustees with actual control over a Trust Corpus insures that if the trustee

should ever borrow or make unauthorized disbursements from the trust, thatvery trustee is obligated to use his own wealth to replenish the trust.Replenishing the $13.8 trillion paid into Social Security which was never

placed in a trust fund, which if it had been placed in a trust fund would haveyielded a vast, truly astronomical amount of income and appreciation bynow. I will leave it to real actuarial accountants and other mathematical


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wizards to figure out exactly (or even approximately) what the SocialSecurity Trust Fund SHOULD be worth now, if it had been properlysegregated and managed, even minus all earned disbursements.

BECAUSE OF THE PROMISE OF A TRUST FUND, TAXPAYINGCONTRIBUTORS HAVE STANDING, AS DO EXPECTED

BENEFICIARIES, DEPENDENTS OF CONTRIBUTORSTaxpayer standing has had a weak and nearly fatally flawed history in

the United States up until now---quite frankly there is no suggestion oftaxpayer standing to sue regarding government expenditures in the UnitedStates. For many years, I have been an enthusiastic fan of expanding the

Flast v. Cohen doctrine of taxpayer standing in regards to the EstablishmentClause of the First Amendment to cover EVERY clause of the Constitution

for which there would otherwise be no possibility of enforcement. 392 U.S.83, 88 S. Ct. 1942, 20 L. Ed. 2d 947 (1968). I have also argued for NinthAmendment reserved rights standing in such cases. Neither of thesedoctrines have been wildly successful, by any means, and during the pastterm (even regarding Establishment Clause cases) the U.S. Supreme Courthas further limited theFlast v. Cohen doctrine inArizona Christian SchoolTuition Organization v. Winn, 563 U.S. ____ (2011)

3. But simply put:

3Justice Anthony Kennedys opinion in theArizona Christian School Tuition case does

provide an interesting supplemental argument regarding the logical link and nexus between government action and injury for Taxpayer Standing. A strong and clearnexus between governmental action and personalized injury is a standard which theGovernments Social Security Hoax and subsequent failure to create vested andindividually accountable Social Security Trust Funds readily meets:

The primary contention of respondents, of course, is that, despite thegeneral rule that taxpayers lack standing to object to expenditures allegedto be unconstitutional, their suit falls within the exception established byFlast v. Cohen, 392 U.S. 83 . It must be noted at the outset that, as thisCourt has explained, Flasts holding provides a narrow exception tothe general rule against taxpayer standing.Bowen v.Kendrick, 487 U.S.

589, 618 (1988) .At issue in Flast was the standing of federal taxpayers to object, onFirst Amendment grounds, to a congressional statute that allowedexpenditures of federal funds from the General Treasury to support,among other programs, instruction in reading, arithmetic, and othersubjects in religious schools, and to purchase textbooks and otherinstructional materials for use in such schools. 392 U.S., at 8586. Flastheld that taxpayers have standing when two conditions are met.


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The first condition is that there must be a logical link betweenthe plaintiffs taxpayer status and the type of legislative enactment

attacked. Id., at 102. This condition was not satisfied in Doremusbecause the statute challenged in that caseproviding for the recitation ofBible passages in public schoolsinvolved at most an incidentalexpenditure of tax funds. Flast, 392 U.S., at 102. In Flast, by contrast,the allegation was that the Federal Government violated the EstablishmentClause in the exercise of its legislative authority both to collect and spendtax dollars. Id ., at 103. In the decades since Flast, the Court has beencareful to enforce this requirement. See Hein, 551 U.S. 587 (no standingunderFlast to challenge federal executive actions funded by generalappropriations); Valley Forge, 454 U.S. 464 (no standing underFlast tochallenge an agencys decision to transfer a parcel of federal property

pursuant to the Property Clause).The second condition for standing underFlast is that there must

be a nexus between the plaintiffs taxpayer status and the precisenature of the constitutional infringement alleged. 392 U.S., at 102. Thiscondition was deemed satisfied in Flast based on the allegation thatGovernment funds had been spent on an outlay for religion incontravention of the Establishment Clause.Id., at 8586. InFrothingham, by contrast, the claim was that Congress had exceeded its constitutionalauthority without regard to any specific prohibition. 392 U. S., at 104105.Confirming that Flast turned on the unique features of EstablishmentClause violations, this Court has declined to lower the taxpayer standing

bar in suits alleging violations of any constitutional provision apart fromthe Establishment Clause. Hein, supra, at 609 (plurality opinion); seealso Richardson, 418 U.S. 166 (Statement and Account Clause);Schlesinger, 418 U.S. 208 (Incompatibility Clause).

After stating the two conditions for taxpayer standing,Flastconsideredthem together, explaining that individuals suffer a particular injury forstanding purposes when, in violation of the Establishment Clause and bymeans of the taxing and spending power, their property is transferredthrough the Governments Treasury to a sectarian entity. 392 U. S., at105106. As Flastput it: The taxpayers allegation in such cases wouldbe that his tax money is being extracted and spent in violation of specific

constitutional protections against such abuses of legislative power. Id., at106. Flast thus understood the injury alleged in Establishment Clausechallenges to federal spending to be the very extract[ion] and spen[ding]of tax money in aid of religion alleged by a plaintiff.DaimlerChrysler,547 U.S., at 348 (quotingFlast, 392 U.S., at 106)). Such an injury,Flastcontinued, is unlike generalized grievances about the conduct ofgovernment and so is appropriate for judicial redress.Id., at 106.


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Public Debt Clause Standing as proposed here has almost nothing materialor structural in common with taxpayer standing.

I submit that every person who has paid Social Security Taxes, andtherefore thought he or she was paying into the Social Security Trust Fund,is entitled at Common Law to enforce Clause 4:1 of the FourteenthAmendment by direct suit, an action for fiduciary accounting at commonlaw, against his or her representatives in Congress.

While not even the wealth of the richest Senators (e.g. Californiasown Dianne Feinstein [$42.94 million]) and Representatives (e.g.Californias Darrell Issa [$164.7 million] and Jane Harman [$112.13million]) or Massachusetts John Kerry [$182.755 million] in Congresstoday could personally cover even a small percentage of the debt owed bythe government to their constituents in their respective states, even justcounting the period of their terms in office as the basis for disgorgement.

However, the Senators and Representatives cooperation in theproduction of individual beneficiary balance sheets showing how much eachindividual and family is entitled to receive would likely make these wealthy

public servants feel better about themselves when sued and might turn themto the Plaintiffs cause, once a couple of hundred constituent lawsuits werefiled, or better yet a couple of thousand. The calculation of such estimatetrust wealth is furthermore well within the realm of possibility givenCongressional staffs and budgets.

Under Declaratory Judgment, as in Bankruptcy Proceedings, JudicialOrders may be entered Compelling the Reevaluation and Prioritization the

Debts of a Bankrupt GovernmentThis review of the background and outline of a possible legal action

regarding the Public Debt Clause started out by quoting the first prong of theFederal Declaratory Judgment Act, which created the remedy where a validand justiciable case and controversy already exists. It is important to notethat once declaratory relief is awarded to a complaining party, the DistrictCourts of the United States also have broad discretion fashion appropriatefurther relief and remedies. 28 U.S.C. 2202 provides:

TITLE 28 > PART VI > CHAPTER 151 > 2202

2202. Further reliefFurther necessary or proper relief based on a declaratory

judgment or decree may be granted, after reasonable notice and


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hearing, against any adverse party whose rights have beendetermined by such judgment

4.

The ultimate incentive each Senator and Representative sued willhave to comply with the demand for fiduciary accounting to each suingconstituent would be to pass the buck and demand disgorgement from

banks and private corporate beneficiaries of illegitimate debt spending toreplenish or Reconstruct the Social Security Trust. But the Senators andRepresentatives will need to participate in the process of tracing funds and

prioritizing the obligations of the now---we have to admit it, pretty muchtotally Bankrupt Government of the United States of America.

In the spirit of George H.W. Bush, I think it would be a much kinderand gentler [and much more typically Anglo-American] thing merely to sueour representatives and hold them personally liable for Reconstructing theSocial Security and Medicare Trusts, by way of modifying government

spending in the interests of compliance with 4:1 of the FourteenthAmendment, than either the French or Russian-style Revolutionaryalternatives of either off with their heads or line them all up by a wall andshoot them.

4This provision is shorter than but exactly analogous to the remedial section 42 U.S.C.1988(a) discussed above, on which FederalBivens actions are modeled, whichauthorizes the Court to utilize common law remedies.

TITLE 42 > CHAPTER 21 > SUBCHAPTER I > 1988 1988. Proceedings in vindication of civil rights

(a)Applicability of statutory and common lawThe jurisdiction in civil and criminal matters conferred on the districtcourts by the provisions of titles 13, 24, and 70 of the Revised Statutes forthe protection of all persons in the United States in their civil rights, andfor their vindication, shall be exercised and enforced in conformity withthe laws of the United States, so far as such laws are suitable to carry thesame into effect; but in all cases where they are not adapted to the object,or are deficient in the provisions necessary to furnish suitable remediesand punish offenses against law, the common law, as modified andchanged by the constitution and statutes of the State wherein the courthaving jurisdiction of such civil or criminal cause is held, so far as the

same is not inconsistent with the Constitution and laws of the UnitedStates, shall be extended to and govern the said courts in the trial anddisposition of the cause, and, if it is of a criminal nature, in the inflictionof punishment on the party found guilty.

See also: RethinkingBivens: Legitimacy and Constitutional AdjudicationJames E. Pfander and David Baltmanis, The Georgetown Law Journal, Vol. 98:117-151(2009). http://www.georgetownlawjournal.com/issues/pdf/98-1/Pfander%2520&%2520Baltmanis.PDF


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The best analogy for the litigation process and program here proposedmight be an Involuntary Bankruptcy under Chapter 11, where the court

presiding would listen to the claims of the millions of creditors who havecontributed to Social Security and been denied an accounting of the fullmeasure of the benefits to which they were entitled. When the SocialSecurity Trust fund is found to be devoid of equities of any kind, ormarketable debt securities of any kind, those funds may need to bereplenished by reversing transactions, reversing transfers of funds, perhapsextending over the past twenty-five or more years, but as much as necessary,to unravel the grants given to Banks and other Financial institutions not justin the recent bailouts relating to mortgages but also in the 1980s-90s Savings& Loan crises and bailouts.

Who knows what would be necessary for the United StatesGovernment to sell to restore the integrity of Social Security and Medicare.

We might even have to withdraw our armed forces from the entire MiddleEast and return the sovereignty of Afghanistan, Iraq, and Libya to the peopleof those countries. We might have to withdraw our protection from theKings of Saudi Arabia and Kuwait and leave those archaic monarchies tofend for themselves.

The U.S. Government might have to divest itself utterly of Amtrakand General Motors, of its 79.9% controlling interest in FNMA, GNMA, andFHLMC (Fannie Mae, Ginnie Mae and their triplet sibling Freddie Mac), orany or all of the other approximately 150 government owned corporations,including even Sacred Cows such as the Federal Deposit InsuranceCorporation, the St. Lawrence Seaway Development Corporation and the

sanctum sanctorum Tennessee Valley Authority.Maybe the Federal Government would have to stop promoting the

destruction of civil liberties in the States by funding the overstaffing ofunnecessary police departments and the construction of corporate welfare

prison construction projects and FEMA camps. (As of the end of January2010, Federal subsidies to state and local government had increased 1173%sinceFlemming v. Nestor authorized the termination of vested rights undersocial security because no property rights were involved in 1960).

In any event, utilizing bankruptcy principles to prioritize debts wouldsurely exalt the fiduciary obligations and promises of the government to the

people over all other programs, especially corporate welfare and federal-state revenue sharing. One must ask why would the salvage of any privatelyheld company EVER more important than to honor than the fiduciarycommitment to create a trust with the $13.8 billion taken from the American


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people by taxation which was politically sold to the people by a massive andunstoppable scheme to fraud?


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CONCLUSION:A Broader Perspective on the Validity of Government Debts

And, indeed, every member of both houses of Congress has utilizedthe mail and interstate wire services to communicate with theirconstituencies about the social security entitlement under the BudgetCrises of 2011-2012. Thus, in addition to multiple breaches of fiduciaryduty, embezzlement, fraud in the inducement, and fraud in the execution andmanagement of the Social Security Trust, members of Congress could well

be held criminally liable for violations of at least one section of the mailfraud statute, 18 U.S.C. 1346, the term scheme or artifice to defraudincludes a scheme or artifice to deprive another of the intangible right ofhonest services.

Even under Article I, 6:3, members of Congress were not immunefor arrest for treason, felony, and breach of the peace, and all violations of

the mail fraud statute are clearly felonies, whether or not the entire SocialSecurity Scheme be considered Treason or not.

In regard to the concept of Treason, however, it is worth noting arecent book by Vincent Bugliosi: The Prosecution of George W. Bush forMurder. In that book, Bugliosi mentions in passing the trillion dollar costof the war, but also makes it clear that, far from vanquishing any real foes ofthe United States or the American people, the War in Iraq---nowaccompanied by President Barack Hussein Obamas War in Libya as well asthe continuing conflict in Afghanistan, has given substantial aid andcomfort to such enemies, by casting the American troops in the role ofmodern day recidivist war criminals.

Is it likewise Treason for Congress to continue to plunge the UnitedStates deeper and deeper into the illegitimate abyss of invalid debt necessaryto further this Treason? According to Wikipedia:

The costs of the War on Terror are often contested, asacademics and critics of the component wars (including the IraqWar) have unearthed many hidden costs not represented inofficial estimates. The most recent major report on these costscome from Brown University in the form of the Costs of War

project, which said the total for wars in Iraq, Afghanistan, andPakistan is at least $3.2-4 trillion. The report disavowed

previous estimates of the Iraq War's cost as being under $1trillion, saying the Department of Defense's direct spending onIraq totaled at least $757.8 billion, but also highlighting thecomplementary costs at home, such as interest paid on the funds


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borrowed to finance the wars and a potential nearly $1 trillionin extra spending to care for veterans returning from combatthrough 2050.

http://en.wikipedia.org/wiki/Financial_cost_of_the_Iraq_War.

Widespread Public Awareness that$13.8 trillion has been stolen from

the American People could be Hazardous to the Healthof those in Government

The Judicial System in the Anglo-American world evolved steadilyfrom the time of the Saxon Kings Aethelbert and Eadric of Kent, Offa ofMercia, Ine and Alfred-the-Great of Wessex through the time of King Johnand Magna Charta up to the English Bill of Rights in 1689 and its AmericanEquivalent a Century Later to replace the Germanic & Viking world-systems

of trial-by-combat, trial-by-ordeal, and bloodfeuds with what we now calldue process of law. In sum, the English legal system came into being tocurb and replace the violent resolution of disputes.

The English-speaking people have never suffered through anyexpressly revolutionary bloodbaths remotely comparable to the French andRussian Revolutions of 1789 and 1917. Still, the bloodiest conflict inAmerican History, the War Between the States of 1861-65, which has beencalled Americas Trial-by-Battle

5, had many of the characteristics of a

revolutionary war, and was fought largely on the political premise (orpretext) of constitutional rather than strictly economic issues.

It cannot escape the serious student of history that it one of theprincipal causative events in America Trial-by-Battle arose in the UnitedStates Supreme Courts distinctly un-Solomonic decision in the Dred ScottCase, Scott v. Sanford, 60 U.S. 393 (1857) which triggered the polarizationof opinion between pro-Slavery and Abolitionist factions and between the

Northern and Southern States. Thus, in this case, perhaps inevitably,perhaps not, the American Courts failed in their duty to keep the peace, andin fact Chief Justice Taney bears at least some of the blame for the 625,000war deaths which followed (not counting civilian death from disease or

malnutrition in the South). The lesson is that the role of the Courts in oursystem of government is critical, and the willingness of the Government to

5Cynthia Nicoletti, The American Civil War as a Trial by Battle,Law and HistoryReview, February 2010, Volume 28, No. 1: 71-110 (the American Society for LegalHistory, Inc., Cambridge University Press).


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accept responsibility for mistakes and wrongdoing is a key element inkeeping the peace.

The American Government has lied to the people about SocialSecurity from the beginning: they called it a Trust Fund, but it was never aTrust Fund. The American Government has lied to the people aboutMedicare. They said it was managed together with Social Security as Trust,

but it never was.Every American who ever paid into the system directly, or was the

dependent of any American who ever paid into the system directly is entitledat common law to an individualized accounting and disgorgement (orrestoration---in the spirit of the Fourteenth Amendment theReconstruction) of the Constructive Trust which is the best substituteavailable for the genuine trust would have existed had Social Security andMedicare been enacted honestly and structured properly according to

common or civil law principles of fiduciary management and accounting.The United States Government is effectively bankrupt. This has been

true in terms of real money for years, but the application of Keynsianeconomics and ponzoid-pyramid schemes of perpetual inflation everwidening at the bottom while growing taller and taller has disguised thereality. Since Congress seems not to know what principles to apply, or eventhat a serious problem exists, invocation of a judicial remedy seemsappropriate, and in the best of the Anglo-American cultural tradition ofmoderation through the rule of law. Application of common law principles,as is routinely done in Bankruptcy Court, is also authorized both implicitly

by the general declaratory judgment statute and by the express terms of 42U.S.C. 1988(a) on which theBivens action is modeled.

At the very least, a nationwide campaign of lawsuits outlined alongthe terms suggested here would awaken Congress and the Executive Branchto the true nature of the Social Security Trust Fund Hoax and Fraud that has

been perpetrated on the American People.By way of remedy, everyone in the United States would either obtain

an accurate estimate or an actual accounting of the value of their investmentsin Social Security and Medicare.

If enough people joined in, Congress might well undertake themammoth, but entirely worthy, task of paring down the U.S. Government toa situation whereby the Social Security and Medicare Trusts can be honestlyand fully reconstructed, and restructured as true or genuine trusts where eachindividual taxpayer purchases a property interest in a real trust corpus whichwill be vested to him or her for life.


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I honestly take no position on the debate whether Social Securityshould be privatized or not---no matter who operates it, it must be runaccording to the rules of common law fiduciary standards exactly along thelines used in the private insurance industry. If the government can learn tolive by the law then the government may perhaps retain control of socialsecurity. If this is impossible, if politics and fiduciary duty and sound,honest management are indeed unmixable, then the privatization option mustneeds be considered.

The actual complaint, even with multiple governmental defendantsand several common law causes of action might not be as long as thisBackground and Outline, which nevertheless provides the argument andanalytical framework for defending the lawsuit and complaint once filed.

outline public debt & ss complaint---draft 08-17-2011

Documents