Government as a Reptile Fund

Last Saturday’s Washington Post carried a front-page article on the IRS’s enforcement choices (“IRS targeted tea party groups for tax scrutiny”). We’ll hear more about that matter. Right underneath the IRS piece, still above the fold, the Post had this: “HHS asking firms for money for Obamacare.” Secretary Sebelius, we learn, has called health industry executives and other “stakeholders” for money to promote Obamacare and to enhance enrollment.

Unless you’ve spent six months in a coma, you know the background: Obamacare’s “Exchanges” aren’t ready for prime time (this coming October). The administration has asked for additional start-up money, but Congress has said “no.” “So,” an HHS assistant secretary explained, “we’ve had to come up with a Plan B.” (Not the contraceptives Plan B—that’s also HHS policy, but different.) But there’s nothing to worry about, a spokesman elaborated: “Sebelius did not solicit funds directly from industries that HHS regulates, such as insurance companies and hospitals, but rather asked them to contribute in whatever way they can.” Indeed.

Yesterday over lunch, my colleague Jeremy Rabkin reminded me of an intriguing historical precedent: Chancellor Bismarck’s “reptile fund.” The link is in German, so I’ll summarize: in the 1860s, after Prussia’s annexation of Hanover, Bismarck confiscated the private assets of the dethroned Georg V and used the funds to ensure cooperation from union bosses, assorted would-be potentates (Ludwig II), and above all the press, the better to promote public understanding of the government’s far-sighted objectives. Parliament wasn’t pleased, but what the heck. The notorious Emser Depesche, which helped trigger war with France, was part of the scheme: it was published in one of Bismarck’s slush-funded papers.

Admittedly, differences exist. It’s more difficult now to expropriate kings, so corporations will have to do. The money isn’t being parked in the government’s off-budget accounts; it goes directly to the administration’s friends, such as Enroll America (according to the Post, the “most prominent” Obamacare shill, whose president “joined the group in January after serving as the White House’s deputy director for public engagement”).  HHS isn’t trying to start a war with France. And finally, dethroned royals can be expropriated only once; regulated industries, from here to eternity. So the HHS enterprise is more like a reptile annuity than a fund.

The term (“Reptilien Fonds”) stuck in the 1860s and 1870s, but it changed its connotation. The “reptiles” Bismarck had in mind were malcontents who babbled about liberty, the constitution, and other distractions from important public purposes. (The Beer Party Patriots?) To Bismarck’s considerable chagrin, the word was soon taken to describe the folks who took the money. So far as I’ve been able to learn, the term was never applied to the officials who ran the system. But then, no one would have called the Iron Chancellor a “reptile,” and he was the only guy around. He never had a deputy director for public engagement.

Michael S. Greve is a professor at George Mason University School of Law. From 2000 to August, 2012, Professor Greve was the John G. Searle Scholar at the American Enterprise Institute, where he remains a visiting scholar. Before coming to AEI, Professor Greve cofounded and, from 1989 to 2000, directed the Center for Individual Rights, a public interest law firm. He holds a Ph.D. and M.A. in government from Cornell University, and completed his undergraduate studies at the University of Hamburg. Currently, Professor Greve also chairs the board of the Competitive Enterprise Institute and is a frequent contributor to the Liberty Law Blog. Professor Greve has written extensively on many aspects of the American legal system. His publications include numerous law review articles and books, including most recently The Upside-Down Constitution (Harvard University Press, 2012). He has also written The Demise of Environmentalism in American Law (1996); Real Federalism: Why It Matters, How It Could Happen (1999); and Harm-less Lawsuits? What's Wrong With Consumer Class Actions (2005). He is the coeditor, with Richard A. Epstein, of Competition Laws in Conflict: Antitrust Jurisdiction in the Global Economy (2004) and Federal Preemption: States' Powers, National Interests (2007); and, with Michael Zoeller, of Citizenship in America and Europe: Beyond the Nation-State? (2009).

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