Lori Wallach (202) 454-5107 lwallach@citizen.org
As Growing European Government Opposition to Investor-State Regime Shadows This Week's U.S.-EU Talks, New Report Takes on Obama Administration Defense of Parallel Legal System for Foreign Corporations
The Obama administration's precarious justifications for the investor-state dispute settlement (ISDS) regime may determine the fate of the transatlantic free trade agreement, said Public Citizen as it released a new report examining those defenses and revealing data on the U.S. and European Union (EU) firms that would be newly empowered to attack domestic policies in extrajudicial tribunals if the pact includes ISDS.
The Obama administration's precarious justifications for the investor-state dispute settlement (ISDS) regime may determine the fate of the transatlantic free trade agreement, said Public Citizen as it released a new report examining those defenses and revealing data on the U.S. and European Union (EU) firms that would be newly empowered to attack domestic policies in extrajudicial tribunals if the pact includes ISDS. Recently, the incoming European Commission president, several large voting blocs in the European Parliament and the German government have voiced opposition to ISDS.
"The ugly political spectacle of the Obama administration insisting on special privileges and a parallel legal system for foreign corporations over European officials' growing objections is only made worse by the utter lack of policy justifications for ISDS," said Lori Wallach, director of Public Citizen's Global Trade Watch. "As a slew of domestic laws are being attacked in these corporate tribunals, European officials are rethinking past support for ISDS while the Obama administration just doubles down."
The Obama administration has also become increasingly isolated at home in pushing for ISDS, as libertarian and tea party groups have expressed ISDS opposition alongside the labor, environmental, consumer, health and other organizations that represent the president's base. The ISDS system, included in some past U.S. and EU trade or investment pacts, empowers foreign corporations to bypass domestic courts, and challenge domestic policies and government actions before extrajudicial tribunals authorized to order taxpayer compensation for claimed violations of investor rights and privileges included in the pacts.
Trying to quell the mounting controversy, the administration has issued a series of ISDS defenses that Public Citizen refutes in its new report, "Myths and Omissions: Unpacking Obama Administration Defenses of Investor-State Corporate Privileges." The report documents the increasingly audacious use of ISDS cases to attack policies ranging from Germany's phase-out of nuclear power after the Fukushima disaster to Australia's landmark plain packaging cigarette law to a Canadian province's moratorium on fracking and that country's national medicine patent policy. In recent months, South Africa and Indonesia have joined the list of countries announcing the termination of ISDS-enforced agreements.
Using official data on cross-border investments, the report reveals that, were the U.S.-EU pact to include ISDS, it would newly empower corporate claims against domestic policies on behalf of more than 70,000 foreign firms - an unprecedented increase in investor-state liability for both the United States and the EU.
"Given the vast threats that these corporate privileges pose to our health, our environment, our democracy and our tax dollars, it's little surprise that European officials have joined the broad chorus concerned about this extreme system," said Wallach. "Now all eyes are on the Obama administration: Will it continue peddling baseless defenses of these corporate protections even if that means the demise of its priority U.S.-EU pact?"
The Public Citizen report details instances in which governments have rolled back or chilled health and environmental protections in response to ISDS cases and threats under existing pacts. It describes how ISDS cases have undermined the rule of law by empowering extrajudicial panels of private-sector attorneys to contradict domestic court rulings in decisions not subject to any substantive appeal. And contrary to the administration's claims, the report explains precisely how ISDS grants foreign corporations greater procedural and substantive rights than domestic firms, including a right to demand compensation for nondiscriminatory public interest policies that frustrate the corporations' expectations.
"Rather than try to silence critical voices with far-fetched reassurances, the Obama administration should heed widespread warnings of the threats posed by this parallel legal system for corporations and scrap its stubborn fealty to ISDS," said Ben Beachy, research director of Public Citizen's Global Trade Watch. "As the world rejects this extraordinary regime, we cannot afford to further embrace it."
Additional reasons for the current ISDS controversy described in the report, which goes point-by-point through the administration's claims, include:
- ISDS cases are surging. While treaties with ISDS provisions have existed since the 1960s, just 50 known ISDS cases were launched in the regime's first three decades combined (through 2000). In contrast, corporations have launched more than 50 ISDS claims in each of the past three years.
- Under U.S. free trade agreements (FTA) alone, foreign firms already have pocketed more than $430 million in taxpayer money via investor-state cases. Tribunals have ordered more than $3.6 billion in compensation to investors under all U.S. bilateral investment treaties and FTAs. More than $38 billion remains in pending ISDS claims under these pacts.
- Numerous studies have failed to find that ISDS-enforced pacts cause an increase in foreign direct investment - the ostensible reason for governments to subscribe to the pacts' extraordinary terms. As promised benefits of ISDS have proven illusory while tangible costs to taxpayers and safeguards have grown, an increasing number of governments have begun to reject the investor-state regime. But as they have moved to terminate ISDS-enforced pacts, foreign investment has grown.
- The structure of the ISDS regime has created a biased incentive system in which tribunalists can boost their caseload by using broad interpretations of foreign investors' rights to rule in favor of corporations and against governments, and boost their earnings by dragging cases out for years.
- Purported safeguards and explanatory annexes added to agreements in recent years have failed to prevent ISDS tribunals from exercising enormous discretion to impose on governments' obligations that they never undertook when signing agreements.
- Transparency rules and amicus briefs are insufficient to hold accountable tribunals that remain unrestrained by precedent, countries' opinions or substantive appeals.
- State and local governments have no standing to defend the state and local policies that often are challenged in ISDS cases.
- The Obama administration has repeatedly ignored ISDS opposition from Congress, the bipartisan National Conference of State Legislatures, diverse public interest groups and legal scholars.
Public Citizen is a nonprofit consumer advocacy organization that champions the public interest in the halls of power. We defend democracy, resist corporate power and work to ensure that government works for the people - not for big corporations. Founded in 1971, we now have 500,000 members and supporters throughout the country.
(202) 588-1000'Jewel Thief' Bolsonaro Among 12 Indicted for Alleged Embezzlement in Brazil
The former right-wing president and others including his personal aide allegedly sold state property including jewelry and other gifts worth more than $1 million in the United States.
Former Brazilian President Jair Bolsonaro's legal woes increased dramatically Thursday as he and 11 others were indicted for embezzlement and other crimes in connection with the alleged misappropriation of diamond jewelry and other state property received as gifts from the Saudi and Bahraini monarchies during the right-wing leader's presidential tenure.
Carta Capital reported that Brazil's Federal Police indicted Bolsonaro with embezzlement, money laundering, and criminal association. If convicted on all counts, he faces up to 25 years in prison. Bolsonaro maintains his innocence.
Eleven other people were also indicted in the case, including former Mines and Energy Minister Bento Albuquerque and former Bolsonaro personal aide Lt. Col. Mauro Cid. The office of Brazilian Attorney General Jorge Messias must now decide whether to proceed with a federal case against the indicted individuals.
According to authorities, Bolsonaro failed to properly register high-value gifts from the Saudi and Bahraini governments near the end of his presidential term. Those items were later sold in the United States by the president's associates.
While visiting Saudi Arabia in October 2019, the Saudi monarchy gifted Bolsonaro a white gold kit containing a diamond-encrusted Rolex watch. This and another luxury Swiss watch—a Patek Philippe—were later allegedly sold in a mall in Pennsylvania.
This diamond-encrusted Rolex watch (left) is part of the white gold kit (right) that was allegedly sold by Bolsonaro associates in the United States. (Photo: Brazilian Federal Police)
On an October 2021 trip to Saudi Arabia, Albuquerque received a gold rosé kit with a watch, cuff links, pen, ring, and an Islamic rosary made by Chopard and failed to properly report the gift upon returning to Brazil. Investigators say the kit was then taken aboard an official flight on which Bolsonaro was a passenger and subsequently sold at a New York auction.
Proceeds from the sale of the undeclared goods—which investigators say totaled more than $1 million—were pocketed by the indicted individuals.
Army Gen. Mauro Lourena Cid—the father of Lt. Col. Mauro Cid, Bolsonaro's personal aide—allegedly kept some jewelry and sculptures received by Bolsonaro at the end of the Arab-Brazilian Chamber of Commerce Business Seminar in Manama, Bahrain in November 2021.
This photo shows some of the diamond jewelry cited in the Brazilian Federal Police indictment of former President Jair Bolsonaro and 11 others.(Photo: Brazilian Federal Police)
Police recommended criminally charging the younger Cid, who signed a plea deal. Cid's lawyer claimed his client was following orders from Bolsonaro—an allegation the ex-president denies.
O Globoreported Bolsonaro allegedly stored 175 boxes containing numerous gifts at a property owned by former Formula One racer Nelson Piquet. While some of the gifts were determined to be the president's rightful property, other items given to Bolsonaro while he served in his official presidential capacity are legally owned by the state.
This is the second set of federal criminal charges for Bolsonaro, who in March was
federally charged with allegedly falsifying his Covid-19 vaccination data and criminal association in a case that could result in a prison sentence of 12-16-years if he is fully convicted.
Bolsonaro—who denies any wrongdoing—is also banned from seeking any political office for eight years due to his alleged abuse of power related to baseless claims of fraud in the 2022 presidential election.
A 2023 Brazilian congressional inquiry also found that Bolsonaro was the "intellectual and moral author of a coup movement" that culminated in the January 8, 2023 attacks on government buildings, and he and scores of his supporters should be criminally indicted for their "willful coup attempt."
Bolsonaro's autocratic actions have been compared to those of former U.S. President Donald Trump, long ago earning him the nickname "Trump of the Tropics." Bolsonaro sought refuge in the United States following the January 2023 attacks and the inauguration of leftist President Luiz Inácio Lula da Silva, who defeated him in the runoff round of the 2022 presidential election.
"Bolsonaro the Jewel Thief" trended on X, the social media platform formerly known as Twitter, following Thursday's indictments.
"Today is a great day for people who believe in justice," said one Socialism and Liberty city councilwoman in Belo Horizonte.
'Voters Won Big': Wisconsin Supreme Court Restores Ballot Drop Boxes
"At the very heart of our democracy is the fundamental freedom to vote," said Democratic Gov. Tony Evers. "This is a victory for our democracy."
Democracy defenders in Wisconsin celebrated on Friday after the state Supreme Court ruled that absentee ballot drop boxes can be located throughout communities for the November elections, reversing a decision from two years ago, when there was a majority of right-wing justices.
"Wisconsin voters won big today with the decision to reinstate drop boxes across the Badger State," said All Voting is Local Wisconsin state director Sam Liebert in a statement. "Drop boxes are an incredibly popular form of voting that offer greater access to the elections for those who may not be able to wait in line at the polls, particularly those with disabilities."
"Wisconsin voters should have more options, and drop boxes are a secure and easy way to increase civic participation and ensure voters have another safe, secure, and accessible way to cast their ballot," Liebert added.
Common Cause Wisconsin co-chair Penny Bernard Schaber, whose group joined an amicus brief to the court in May, also welcomed the ruling, saying that "reinstating the use of secure ballot drop boxes is good for all of us in Wisconsin."
"It is especially good for individual voters who have mobility issues and time constraints that make it difficult for them to go into and out of a polling place or an election clerk's office," the former Democratic state representative similarly stressed. "Secure ballot drop boxes are a necessary and safe way to return our ballots."
Congressman Mark Pocan (D-Wis.) declared: "This is huge news for democracy! Making it easier for folks to vote is a good thing."
Common Cause Wisconsin pointed out that "voter drop boxes have been used since before 2016 and in 2020-21, during the height of the Covid-19 pandemic, the number of drop boxes was expanded to 570 located in 66 of Wisconsin's 72 counties. The expanded number of drop boxes, authorized by the bipartisan Wisconsin Elections Commission (WEC), offered voters a more convenient and safe way to ensure that their absentee ballots could be returned in time to be counted, in part because of the uncertainty of timely delivery of ballots by the U.S. Postal Service."
Justice Ann Walsh Bradley wrote in the majority opinion that "our decision today does not force or require that any municipal clerks use drop boxes. It merely acknowledges what Wis. Stat. § 6.87(4)(b)1. has always meant: that clerks may lawfully utilize secure drop boxes in an exercise of their statutorily-conferred discretion."
She was joined by the other three liberals, including Justice Janet Protasiewicz, whose election last year ended right-wing control of the court. Wisconsinites are preparing for a similar electoral battle next year, when Walsh Bradley plans to retire.
The court earlier this week agreed to take up a pair of high-profile abortion cases. Late last year, the liberal majority threw out Wisconsin's legislative maps, which were rigged to favor Republicans. Democratic Gov. Tony Evers signed new maps in February.
Applauding the ruling on Friday, Evers said that the court "affirmed what we've been saying all along: Drop box voting is safe, secure, and legal, and local clerks should be empowered to make decisions that make sense for their local communities."
"At the very heart of our democracy is the fundamental freedom to vote," he continued. "This is a victory for our democracy. And we're going to keep fighting to ensure that every eligible voter can cast their ballot safely, securely, and as easily as possible to make sure their voices are heard."
The decision comes as Wisconsin is expected to play a key role in this year's contest for the White House. Democratic President Joe Biden, who is now seeking reelection and campaigning in Wisconsin on Friday, won the state by about 20,000 votes in 2020, when he beat former President Donald Trump, now the presumptive Republican nominee.
'Disturbing Milestone': Israeli Settler Attacks in West Bank Surpass 1,000 Since October 7
"While a few individuals have been detained, no civilian or soldier has been prosecuted in connection with any of these 1,000 attacks," said a coalition of aid agencies.
A coalition of aid agencies on Friday implored the international community to take concrete, punitive action against the Israeli government and settlers after the number of settler attacks in the occupied West Bank since October 7 surpassed 1,000.
The Association of International Development Agencies (AIDA), a group of international organizations working in the occupied Palestinian territories, said in a statement that the rate of settler attacks on Palestinians in the West Bank has doubled since the same time last year, from an average of two per day to four.
"At least 10 people, including two children, have been killed during these attacks, and at least 234 have been injured, including 20 children. Since 7 October, 1,260 people, including 600 children, have been forcibly displaced amid settler violence and movement restrictions. The displaced households are from 20 herding and Bedouin communities throughout Area C of the West Bank. As one survivor of settler violence explained, 'No place is safe here.'"
"Settler violence is premeditated and orchestrated by organized groups from known outposts and settlements, with the support of Israel's government, including local and regional settlement councils," the group added, noting the limited sanctions that the United States and the European Union have imposed on individual settlers "have failed to reduce the frequency of attacks."
"While a few individuals have been detained, no civilian or soldier has been prosecuted in connection with any of these 1,000 attacks," AIDA said. "Reports indicate that some illegal outpost farms operated by sanctioned settlers—many of whom have been reported to be at the center of multiple violent incidents—have received hundreds of thousands of dollars worth of material support from the Israeli Ministry of Agriculture, the Ministry of Settlements, the Settlement Administration in the Ministry of Defense, and through local and regional settlement councils."
"Foreign governments must act now to stop this illegal appropriation by taking meaningful measures to hold the Israeli government and perpetrators of these attacks to account."
AIDA urged the international community to "adopt new restrictive measures which go beyond individual settlers to target identified organizations and state entities who promote violence and/or take part in attacks on Palestinian civilians and civilian infrastructure."
The group also argued that the far-right Israeli government "should be held accountable for the repeated and evidence-based allegations that the military and other state authorities are tolerating, enabling, and at times participating in settler violence."
A Human Rights Watch report published in April found that the Israeli military "either took part in or did not protect Palestinians from violent settler attacks in the West Bank that have displaced people from 20 communities and have entirely uprooted at least seven communities" since October 7.
AIDA's statement came days after the Israeli government announced the seizure of nearly five square miles of land in the West Bank—Israel's largest land grab in the occupied Palestinian territory in more than three decades.
Sally Abi Khalil, Middle East and North Africa director for Oxfam International—an AIDA member—said Friday that settler attacks in the West Bank have reached a "disturbing milestone."
"In a context where outpost legalization is being fast-tracked, and Israel is stealing more and more land," said Khalil, "foreign governments must act now to stop this illegal appropriation by taking meaningful measures to hold the Israeli government and perpetrators of these attacks to account."