How the Administrative State Unconstitutionally Censors its Critics

The Goldwater Institute filed a brief with the U.S. Supreme Court today in a case involving the “gag rule” which the Securities and Exchange Commission uses to silence its critics—in violation of constitutional guarantees for free speech. It’s one of the most egregiously unconstitutional ways in which the “administrative state”—the massive, unelected bureaucracies that govern so much of American life—manage to prevent the people from controlling their own government.

The “gag rule” says that if the Commission prosecutes you for what it claims is wrongful conduct in the buying and selling of securities and you want to settle the case instead of going all the way through a trial, you’re required to sign away your right to say that you’re innocent. Not only are you forever prohibited from saying that you didn’t do anything wrong, but the rule prohibits you from saying anything that anyone might even interpret as suggesting that you’re innocent.

The rule is non-negotiable; the Commission demands that you take it or leave it. And not only does it last for the rest of your life, but it applies to all of your actions, meaning that not only can you not talk to reporters, but you can’t even talk to a member of Congress, or even to the Supreme Court. In fact, the plaintiffs in the lawsuit take great care in their briefs to avoid suggesting that they think they’re innocent—because they’re not allowed to tell the truth even to the highest court in the land.

Of course, it’s entirely unacceptable for the government to prohibit criticism. The whole point of a democracy is that the people should be able to monitor and control what public servants are doing. But the gag rule effectively bars that. Under the rule, you’re allowed to praise the Commission, but not criticize it. And even if Congress were to call you to a hearing to testify about your experience with the Commission, you’d either have to say that you were guilty…or decline the invitation.

The administrative state is one of the gravest threats to our constitutional order today. Combining the executive, legislative, and judicial powers in violation of the basic constitutional rule of checks and balances, these unelected agencies control vast areas of American life, with few effective controls by the people. We urge the Court to strike down the “gag rule,” and help restore a government of the people by the people.

You can read our brief here.

Timothy Sandefur is the Vice President for Legal Affairs at the Goldwater Institute’s Scharf-Norton Center for Constitutional Litigation.