In their article "Assault on the First Amendment" (Jan. 1983), attorney-writers Michael McMenamin and William Gorenc, Jr., exposed the Securities and Exchange Commission's persecution of, among others, newsletter publisher Christopher Lowe. When US District Court Judge Jack Weinstein ruled last year that Lowe could not be barred by the SEC from publishing an investment advisory newsletter because of his criminal record, civil libertarians applauded the decision.
But the SEC appealed Judge Weinstein's decision to the US Court of Appeals. And this year, on January 18, the Second Circuit Court, by a 2-to-l decision, reversed Weinstein's decision, ruling that Lowe's publications are engaged in practices not protected by the First Amendment. A dissenting judge affirmed Lowe's First Amendment rights, stating that "investment opinion, in my opinion, is as much speech protected from prior restraint as is political opinion, philosophy or gibberish."
Lowe and his attorneys are appealing the decision to the Supreme Court.
The Lowe decision and its implications for First Amendment protection of so-called commercial speech is an issue that is gathering a lot of attention. New York Times writer Tamar Lewin recently devoted a column to the subject, noting that "any Supreme Court decision that financial advice is protected by the First Amendment might require basic changes in the securities laws, especially since prior restraints"- that is, the authority to bar someone from engaging in an activity such as publishing investment advice-"are implicit in the registration and disclosure requirements enforced by the S.E.C." Moreover, National Law Journal reporter John Riley also recently discussed the Lowe decision, pointing out the present degree of confusion and debate over First Amendment protection of "commercial speech." Riley noted the possibility, voiced by some experts, that the decision could set a precedent "to give only limited protection to forms of expression that might otherwise be entitled to nearly absolute protection." Because of this confusion, some observers believe the Supreme Court will agree to hear Lowe's appeal.
WEAPONS Against Testing
Two years ago, Reason published a dramatic expose of shoddy testing of new weapons by the Pentagon and uncovered some of the high-priced duds that were produced as a result ("Fighting with Failures," April 1982). In the wake of that article, Congress passed legislation sponsored by Sen. David Pryor (D-Ark.) creating a new office of operational testing and evaluation in the Defense Department. But Michael R. Gordon recently noted in a column in the National Journal that the Defense Department has "defined the mandate of the new office so narrowly that it has all but defined operational testing out of existence."
In her Reason article, defense analyst Dina Rasor described how "operational testing has been so deformed by the Pentagon bureaucracy and pork barrel pressures that soldiers continue to end up with weapons that will fail them on a battlefield." It appears that not much has changed. Gordon reported in the National Journal that Defense Secretary Caspar Weinberger's deputies have defined "operational" testing so that it applies only to completed systems-or systems that are "fully representative of the initial configuration of new weapons," as one directive put it.
Advocates of better testing have noted that this excludes preproduction operational tests. And ordinarily, by waiting until production of a weapon begins, " 'constituencies' in the defense industry, the services, and Congress have developed," noted Gordon, "making cancellation politically difficult or impossible" if the weapon falls short in tests. The constituencies are described by former Pentagon official Russell Murray-"the research and engineering community-both military and civilian- that have committed themselves and their reputations to the new weapon,... the industrial firms whose profitability depends on its production,... [and] the employees whose jobs depend on it." An aide to Senator Pryor told Reason that in the wake of the scandal surrounding deputy Defense secretary W. Paul Thayer and his replacement with William Taft early this year, the political fortunes of operational testing in the Pentagon may improve.
- Hope for homeowners. Reason's December 1982 cover story ("Self-Help Housing") reported on the efforts of the Pittsburgh-based Housing Opportunities, Inc. (hoi), to enable low-income families to "earn" their own homes, a program largely based on local charitable and private-sector initiative. HOI now reports that another of its programs-one designed to help out-of-work delinquent mortgagers keep their homes-is achieving impressive results, again primarily with private support. The Home Ownership Protective Effort (HOPE) program, largely supported by a number of Pittsburgh-area lending institutions and a utility company, offered financial counseling to 235 families who faced foreclosure last year because of delinquent mortgage payments. The organization reports that none of the 235 families lost their homes-in fact, the mortgagers made payments 47 percent in excess of what had been targeted.
- Getting off the trough. As taxpayer funding for public television and radio is shrinking, Trends has reported that nine public-TV stations began accepting advertising on an experimental basis and earned a total of $4 million in the process (Jan.). Now comes word that a group of these stations has asked Congress to authorize a national three-year experiment with limited airing of commercials.