D.C.’s “Best Information Available” Charade

NY Times

On a sweltering June morning in 1993, I loitered in a long line of people stretched down a football-field length hallway on the third floor of the headquarters of the US Commerce Department. The queue started outside the entrance of the Public Affairs office of the International Trade Administration. Rulings were imminent on the hottest unfair trade cases of the decade.

Read more of Jim’s articles on his blog.

In pre-internet times, reporters, interns, and couriers would stalk the outside of a government office waiting for copies of key administrative rulings. They would rush press releases back to offices in the nearby National Press Building, or to news bureaus in downtown Washington. I spoke with several people in that line, and none of them had any curiosity regarding the details behind the pending announcements.

Shortly before noon, the door to that office swung open and two bureaucrats walked out. They were quickly mobbed. Almost every person in that line grabbed a copy of the press release and went racing off, no questions asked.

The Commerce Department had spent almost a year investigating, and supposedly had stone-cold proof of the villainy of scores of foreign steel companies. Steel imports were hit with penalty tariffs of up to 109 percent – effectively banishing most foreign steel from the US market, including many types and qualities of steel not produced in the United States. A gaggle of Congressmen were waiting to rejoice that shiploads of predatory imports from 19 nations were torpedoed by federal bureaucrats. The Commerce Department was intentionally shafting the US economy, since steel-using industries employed 30 times more Americans than did domestic steel manufacturers.

Foreign companies had spent roughly $100 million on lawyers and other professionals to help them through the Kafkaesque gauntlet the Commerce Department created with the steel cases. Dumping supposedly means that a foreign company is selling for less in the US than in its home market, or for less than its cost of production. But that’s not how the law operated in practice.

By law, the Commerce Department was obliged to issue complete rulings (up to 70 pages each) detailing the specific offenses committed by foreign companies. Instead, it merely passed out a press release with a list of the penalty tariffs imposed on foreign companies and American importers. There could be no question of their guilt because the Commerce Department “proved” foreign villainy down to the hundredth of a percentile point.

The Commerce Department’s ploy worked. Except for me. When the bureaucrats did their victory lap, I was “laying for them,” as Mark Twain would say. I had been dogging these cases for the prior year, and I knew that federal bureaucrats were up to no good. Those cases epitomized the absurdity and injustice of US trade law.

Prior to joining that line outside the Commerce press office, I submitted a draft piece on the steel dumping cases that the Wall Street Journal editorial page planned to publish the following day. I assumed all the foreign companies would be found guilty – that was a foregone conclusion for those kangaroo courts. But I needed the details of how Commerce convicted the foreign companies.

In the prior weeks, I had spent many hours in a file room in the Commerce Department basement going through the steel dumping case files. I knew the issues that the defense lawyers were disputing, and I knew that Commerce would clobber their clients regardless. I also spent hours on the phone with lawyers, getting fresh dirt and confirming my hunches.

Three minutes after that door had opened, I was practically the only person left standing in the hallway – except for a Commerce junior bureaucrat who looked exhausted from passing out the press releases. He was a thirtyish guy with a dress shirt painfully stretched by a premature paunch. But he qualified for the Commerce Department’s Fashion Elite because the seat of his pants didn’t hang down to his knees.

“Where are the actual rulings?” I asked.

“Huh?” he replied. “I gave you the press release already.”

“I’m looking for the detailed, specific rulings in each unfair trade case.”

“We don’t have them yet.”

“What is this – Alice in Wonderland – verdicts first and evidence later?”

He stared at me as if I had just arrived from another solar system.

I kept glaring at him and raised my arms sidewards in a “What the frig?” gesture.

“I’ll check with my boss,” he shrugged and retreated into the press office.

Five minutes later, he returned and announced that the rulings would be available at 1 p.m. Crap. Being the skunk at this garden party was going to take the whole damn day. I had been hammering Commerce on its dumping shenanigans for three years and the agency likely knew I was prepping to wallop them again. This wasn’t the first roadblock I encountered at Commerce headquarters.

When I returned at 1 p.m. with my Bovard News Service press pass flopping around my neck, I was told the rulings would be available at 4 p.m. Double damn. That was getting close to when the Wall Street Journal would close up editing for the next day’s articles. I called several of the lawyers who had defended foreign companies and got some details but not enough. I also haunted the pay phones to continually update my editor in New York.

I showed up at 4 p.m. looking ever more ornery. When I asked for the rulings, a pasty-faced junior bureaucrat I hadn’t seen before shrugged. “We are having trouble with our photocopiers. We hope to have the problem fixed by tomorrow. Can you come back then?”

“Like hell!” I replied. “What are the damn rulings? Do you want me to write that Commerce violated the law by withholding them?”

A brief panic ensued amidst the GS-11s. Five minutes later, another clerk shuffled forward with a stack of hundreds of pages of rulings that covered 12 of the 19 nations hit by the new penalty tariffs. I have forgotten if I thanked him, but at least I refrained from getting arrested for breaking any of their furniture. Taking that Evelyn Woods Speed Reading course paid off handily as I raced on deadline.

Thanks to the delay in issuing the actual rulings, journalists simply took the Commerce Department’s word on the evidence of foreign guilt. Rewriting a federal agency press release or simply printing it almost verbatim (under a reporter’s byline) was easier than investigating tangled trade cases. The Commerce Department’s accusations were treated as if they were handed down from Mt. Sinai, instead of being pulled out of some bureaucrat’s backside. A Washington Post headline recited the press release: “Commerce Finds Firms From 19 Countries Violated Trade Laws.” A lengthy New York Times article echoed the Commerce Department party line, stating that foreigners had been caught “selling steel here for less than what they charge at home.”

The press release on the dumping margins was burnished with a declaration from Secretary of Commerce Ron Brown: “Information used in making our final determinations was verified and all interested parties — domestic and foreign alike — were accorded an opportunity to comment.” But my WSJ article the following day, headlined “Steel Rulings Dump on America,” proved that Ron Brown was lying.

Commerce claimed, my piece noted, that “the dumping duties are necessary because its analyses showed that the US prices of foreign steel producers were unfairly low. But for most cases, Commerce relied at least in part on its own ‘make-believe’ prices” and disregarded the actual foreign steel prices.

Commerce calculated its penalty tariffs by “invoking the ‘Best Information Available’ [BIA] — often simply the allegations made by US steel producers in their complaints to Commerce. Even in cases where Commerce had verified most of the information submitted by foreign companies, US bureaucrats found pretexts to reject foreign submissions and instead simply treated the unsubstantiated accusations made by American companies as gospel truth.” My piece groused, “While Commerce announced the dumping margins for all 19 nations yesterday, it postponed the release of the official determinations for seven of them. Among the remaining 12, 10 of the punitive judgments were based at least in part on BIA. For most of the BIA determinations, Commerce did little or no verification of the allegations made by U.S. companies.”

Perhaps inspired by the bureaucrats’ “come back tomorrow” charade, my piece concluded, “The Commerce Department apparently believes that fairness should have nothing to do with how it administers America’s ‘fair trade’ laws.”

Almost all the media coverage of the steel dumping cases ignored the depravity of the bureaucratic process that almost automatically condemned imports. Commerce can demand an almost unlimited amount of information from foreign companies, and any refusal to speedily comply is taken as a confession of guilt. A Swedish manufacturer provided 12 tons of documents, including more than four billion separate pieces of information on its sales. But Commerce bureaucrats found pretexts to reject the entire submission and banish the company from the US market with sky-high tariffs. Commerce sometimes used allegations by a US company against its foreign competition even when it recognized that the information was incorrect or false. Commerce’s dumping investigations is akin to a criminal trial in which a judge announced that he discovered a few typos in a brief from a defense lawyer so he was accepting the unsubstantiated accusations of prosecutors as the “best information available.”

The dumping law is the equivalent of political-bureaucratic price controls on $500 billion of annual imports. I had exposed plenty of other Commerce dirty tricks in my investigations. Bureaucrats routinely made absurd comparisons to prove that foreigners were selling at unfairly low prices, thereby supposedly wronging domestic producers. Commerce compared the price of wilted imported flowers sold in the US with the price of fresh flowers in Amsterdam, thereby justifying penalty tariffs on Dutch florists. Commerce slammed Mazda with heavy tariffs after comparing the price of new Mazda minivans sold in Japan with the price of used Mazda minivans in the US. Commerce convicted New Zealand kiwi farmers of dumping after it compared the price of small kiwis sold in the US with larger kiwis from New Zealand sold to Japan. Commerce routinely convicted companies by comparing foreign retail prices with US wholesale prices. A federal judge concluded that the dumping law allowed American companies to conduct “economic war” against their Japanese competitors. And those bureaucrats wondered why I was cynical. I covered Commerce’s dumping racketeering in my 1991 book, The Fair Trade Fraud, and in pieces for the New York TimesNewsweek, and elsewhere.

Unfortunately, “best information available” is how the Washington media usually treats federal assertions on issues across the board. The same deference the Commerce Department received paved the way to invading Iraq. Before the war, almost all the broadcast news stories on Iraq originated with the federal government. PBS’ Bill Moyers noted that “of the 414 Iraq stories broadcast on NBC, ABC, and CBS nightly news, from September 2002 until February 2003, almost all the stories could be traced back to sources from the White House, the Pentagon, and the State Department.” The American media embedded itself in the Bush administration even before the war began. My efforts to sell articles attacking the rush to war were scorned by plenty of media outlets that had previously welcomed my pieces.

Partisan media frenzies sometimes canonize dubious bureaucratic assertions as “best information available.” After fired FBI director James Comey leaked memos to the New York Times in 2017, the press corps decided that Comey was the incarnation of virtue and treated his criticisms of Trump as holy writ. Comey’s failures and falsehoods as FBI chief (which I documented in multiple pieces for USA Today) became irrelevant in the stampede to topple Trump.

During the Covid-19 pandemic, Biden and many governors were able to seize vast arbitrary power in part thanks to the media’s reverential treatment of Chief Covid Fearmonger Tony Fauci, who portrayed all of his critics as enemies of “science.” Rather than spotlighting Fauci’s endless flip-flops, most of the media coverage instead demonized anyone who protested lockdowns or opposed vaccine mandates. When emails surfaced showing that Fauci and others had suppressed evidence that Covid-19 may have leaked from a Chinese government lab, the vast majority of the media ignored the smoking guns and assured that Fauci’s machinations would be a non-story. Perhaps confirming Fauci’s job title – director of the National Institute of Allergy and Infectious Diseases and the Chief Medical Advisor to the President – was the only fact-checking needed.

Relying on government sources has long provided absolution for American journalists. In 1932, the New York Times’ Walter Duranty won a Pulitzer Prize for his reporting on how Stalin was revolutionizing the Soviet Union with his push for collective farms. Duranty pooh-poohed Stalin’s promise to “liquidate” five million of the least impoverished peasant farmers as a rhetorical flourish. Duranty glorified policies that paved the way for the terror famine that killed millions of Ukrainians (which Duranty denied occurred). When critics demanded in 2003 that the Pulitzer award be revoked, the New York Times explained that “Duranty’s analyses relied on official sources as his primary source of information.” Stalin was the worst tyrant in the world at that point. But as long as Duranty’s sources (primarily Stalin) were “official,” he was credible – at least to his editors and the Pulitzer judges. Other reporters vividly captured the horrors of Stalin’s collectivization catastrophe but they didn’t rely on official sources and didn’t win prizes.

Despite perennial pratfalls, the media still often chooses to trumpet official lies instead of exposing them. Inside the Beltway, being a lap dog is easier and more profitable than being an attack dog. The old saying, “Never assume something is true until the government denies it,” goes a bit too far. But Americans need their own “best information available” axiom to automatically reject assertions from media outlets that shamelessly kowtow to politicians and government agencies.

Photo by Spenser Sembrat on Unsplash.

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