Anti-Counterfeiting Bill Doing Well in Washington

John McCary of the Wall Street Journal reports today on the Bayh-Voinovich

bill, an anti-counterfeiting bill which got nowhere in 2005 but which has slightly

better prospects now, in the wake of minor revisions.

There’s really nothing objectionable about the bill itself, which "ensure

that agencies like the Treasury and Justice departments share information on

counterfeiting investigations, including those involving terrorist financing,"

according to McCary. At worst, this is a minor waste of time, especially if

no counterfeiting investigations turn up any connection to terrorist financing.

At best, it could increase the chances of catching counterfeiters and terrorists


What is objectionable, however, is the rhetoric involved.

"If thousands of our businesspeople were being held up at gunpoint in

a foreign country, if our laboratories and research facilities were being

raided and shut down by unidentified individuals, there would be a sense of

alarm," said Sen. Evan Bayh, an Indiana Democrat, referring to the persistence

of product piracy. "That is in effect what is happening today."

Er, no. No US businesspeople are being "held up at gunpoint" –

in fact, guns tend to be conspicuously absent from any counterfeiting investigations.

No US labs or research facilities are being raided or shut down, either. So

quite why Bayh insists on this kind of hyperbole is unclear. But politicians

are prone to hyperbole: it’s the press which is meant to keep them in some kind

of check. McCary never says that Bayh’s assertions are ridiculously over-the-top

– maybe he reckons that’s so obvious that he doesn’t need to. But then

he writes this, with a completely straight face:

Counterfeiting is estimated to cost U.S. companies more than $250 billion

in lost revenue each year. Globally, its costs have been estimated at $600

billion annually. The World Health Organization estimates that up to 10% of

the world’s pharmaceuticals may be counterfeit. Both the U.S. government and

Interpol, the international police organization, have pointed to connections

between counterfeit sales and terrorist financing.

US companies don’t lose anything close to $250 billion due to counterfeiting,

and the global costs aren’t anywhere near $600 billion. These are invented figures,

pulled out of thin air,

with no empirical basis at all. They should not be represented as facts in the

Wall Street Journal, even when they’re immodestly covered with an "estimated

at" figleaf.

As for the connections

between counterfeiting and terrorist financing, they’re tenuous at best, and

generally consist of typical underworld linkages between criminals and paramilitaries

in places such as Northern Ireland, Kosovo, and Chechnya.

The one somewhat reassuring part of McCary’s article is when he mentions, en

passant, that ‘the Justice Department said in a letter to Judiciary Committee

Chairman Sen. Patrick Leahy that the bill has "serious flaws" and

that the agency wouldn’t support it.’ Maybe there are still some parts of the

US government which are more interested in substance than spin.

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