In Praise of Loopholes

There’s something to be said for working smarter, and not harder, and humans have been looking for—and finding—loopholes to enable it for centuries.

The oracle predicted that he who unraveled the Gordian Knot would rule the land. Men traveled from across the continent to try their hand, but none could find a solution to this most perplexing of problems.

Then Alexander the Great came to Phrygia. When he too failed to untie the knot, he pondered the prophecy for a moment before riving the knot in two with his sword. The knot unraveled, the cart was freed, and Alexander the Great eventually conquered all of Asia.
—The Legend of the Gordian Knot

My friend Rebecca is a prosecutor and, whenever I see her, I insist she fill me in on her recent cases. Though most involve routine litigation, she occasionally tells a gem of a tale.

The last time I asked, she told me about the Anus Motion.

“This guy gets pulled over on suspicion of a DUI,” she said, “And it turns out that he only speaks Spanish. So the cop radios for a Spanish-speaking colleague. A second officer shows up, reads the driver his rights in Spanish off of a little card that all cops carry, and they administer the breathalyzer test. Sure enough, the guy is soused.

“We figure this case is a slam dunk. But a few weeks later the driver’s lawyer submits a motion to have the results of the breathalyzer voided, saying that the defendant didn’t understand his rights before we gave him the test. And we’re all, like, ‘Nuh-uh! We read him his rights. In Spanish, even.’

“But the defense somehow got a copy of the Spanish language card that the officer read from, and noticed that the little squiggle was missing from above an ‘n’ in the sentence: ‘¿Tiene veinteuno años?’ In English that literally translates to ‘Do you have 21 years?’—in other words, this was just a routine question to make sure the guy was an adult. But without the tilde over the ‘n’, the word ‘años’ becomes ‘anos’—Spanish for ‘anuses.’

“They’re claiming that the driver thought the officer asked ‘Do you have 21 anuses’, despite the fact that the officer reading the card spoke fluent Spanish and would have pronounced it ‘años’ anyway. And the defendant said ‘si.’ We’re supposed to believe that the guy genuinely thought he was being asked if he had multiple anuses and answered with an enthusiastic ‘yes!’

“The best part is that the defense attorney can’t even bring himself to say the word ‘anus.’ Instead, he calls it ‘the back region.’ We’re going in front of a judge next week, and I’m going to make a point of saying the word ‘anus’ as many times as I can during the proceeding. I even got them to call the legal brief ‘The Anus Motion,’ so he won’t even be able to refer to it by title.

“What do you think the judge will do?” I asked her.

She shrugged. “Probably throw the case out,” she said. “And we’ll have to go back and change all the cards.”


* * *

Nobody likes a cheater. But figure out a clever method for exploiting a loophole, and you’ll become the stuff of legend. Even when the perpetrator is doing something reprehensible (like trying to dodge a DUI charge), you can’t help but marvel at a loophole-monger’s ability to think both inside and outside the box, to adhere to the rules while simultaneously sidestepping them. My prosecutor friend was clearly annoyed with the defense attorney, but there was a twinge of admiration in her voice as she described his machinations.

While the desire to avoid incarceration has spawned its fair share of lateral thinking, perhaps nothing has led to the discovery of more loopholes than the promise of cold, hard cash.

In 1983, for instance, unemployed ice cream vendor Michael Larsen discovered a secret about a popular game show of the time, Press Your Luck. The show featured a big electronic board that functioned as a roulette wheel. The player would set it in motion, let it spin for a few moments, and then press a big “stop” plunger. If it stopped on a money space, the contestant’s total would go up; if it stopped on a “Whammie” he’d lose his accumulated savings. Because the board was random, lucky players would risk maybe half a dozen spins, amass a couple grand, and then quit before they busted and lost everything.

Your dentist could purchase a new H2, claim it as a work expenditure, and deduct the entire thing from that year’s return. But when Larsen appeared on the show, he pressed his luck no fewer than 45 times, without ever hitting a Whammie. The show’s producers were incredulous that anyone could be so ballsy (and fortunate), and they had every right to be. Larsen later revealed something that even the host of Press Your Luck didn’t know: the so-called Big Board was not random. He had taped countless Press Your Luck episodes on his VCR, and watched them until he could distinguish the six distinct patterns the Big Board would use. He’d even gone so far as to memorize all six patterns, training himself to always stop a spin where the money lay (and the Whammies didn’t). By the time he concluded his run, he’d racked up a total of $110,237—about 20 times a typical winning contestant’s haul.

Or take David Phillips, aka “Pudding Guy.” When he learned that the Healthy Foods company was offering its customers 1,000 frequent flier miles for every 10 Healthy Foods products purchased, he began searching for the cheapest item they sold; when he learned that Healthy Foods sold individual pudding cups for a quarter apiece, he purchased every one he could find within a 60-mile radius of his home, and even had his local stores order more from their distributors. (If this sounds familiar, it’s because Phillips’s astounding feat of loopholery was incorporated into the film Punch Drunk Love.)

In the end, Phillips wound up with more than 12,000 cups of pudding and 12 million frequent flier miles. He then gave the pudding to his local Salvation Army and wrote off its cost as a charitable donation.


* * *

Tax laws always seem rife with loopholes. Centuries ago, for instance, citizens in the Netherlands paid property taxes in accordance with the width of their homes; the Dutch responded by building their domiciles narrow, deep, and tall. Take a tour on the canals of Amsterdam and you can see the effects of this loophole on the local architecture.

While slender house minimized taxes in the 17th century, enormous vehicles did the same only a few years ago. In a 2003 article, “A Hummerdinger of a Tax Loophole?”, the Washington Post chronicled an unintended consequence of an economic stimulus package, which allowed small business owners and the self-employed to write off up to $100,000 of “work equipment” in a year. While most cars, trucks, and SUVs did not meet the weight requirements necessary to be classified as “work equipment,” the Hummer did. In other words, your dentist could purchase a new H2, claim it as a work expenditure, and deduct the entire thing from that year’s return.


* * *

Perhaps no group works harder at finding loopholes in the law than the very politicians who create them.

Case in point: The copyright clause of the United States Constitution states that Congress shall have the power to “promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” Many would love to see copyright protections extended indefinitely, but the mettlesome phrase “limited Times” prevents Congress from doing so.

Still, that hasn’t stopped the more inventive in Congress from trying. In 1998, when debating the Copyright Term Extension Act, California Representative Mary Bono spoke on behalf of her recently deceased husband:

Sonny wanted the term of copyright protection to last forever. I am informed by staff that such a change would violate the Constitution [but] there is also [Motion Picture Association of America president] Jack Valenti’s proposal for the term to last forever less one day. Perhaps the Committee may look at that next Congress.

Not every president can get away with this kind of rule-bending. Only the charismatic ones, it seems. There is something to be said for a person who can propose subverting the Constitution to avoid “violating” it.

Those at the top of the political ladder have the luxury of manufacturing their own loopholes. This is typically done by providing a commonly understood phrase with a narrow definition, and then immediately using the term in its new, technical sense. Condoleezza Rice’s unequivocal December 5, 2005, statement that the United States “does not permit, tolerate, or condone torture under any circumstances” came complete with a tiny asterisk next to “torture” and a corresponding footnote (somewhere) reading, “as we—not international law—define it.”

When, in his Paula Jones deposition, President Clinton claimed he “did not have sexual relations” with Monica Lewinski, he was lying in every sense but the legal one, as the prosecution had earlier agreed to a definition of “sexual relations” that omitted the very acts he was accused of performing.

And Nixon famously argued that the Oval Office was a loophole unto itself, the eye of a legal storm. “When the President does it,” he explained, “that means that it’s not illegal.” Alas, Nixon demonstrated that not every president can get away with this kind of rule-bending. Only the charismatic ones, it seems.


* * *

As if sticking it to the Man weren’t audacious enough, there are those who have figured out how to foil the Big Guy himself.

Orthodox Jews, for instance, have devised a number of systems, collectively known as Eruvs, which allow them to adhere to a literal reading of the Torah and yet still engage in activities that are clearly forbidden.

Perhaps the most expansive is colloquially known as the “Eruv for Carrying.” According to the Torah, items cannot be moved outdoors during the Shabbat, a prohibition that includes relocating an item from within an enclosed area (like a home) to the outdoors as well as moving an item that resides outdoors. Obviously, this restriction can make life difficult in an urban area. So rabbis decided to redefine the phrase “enclosed area.” They ruled that if a wire or string completely surrounds an area—an entire city block, say—and if everyone agrees, in principle, that the “enclosed” area is commonly owned, then the entire bounded region can be considered a single, sprawling, shared “home” of sorts, and is therefore not technically “outdoors.” Drive around a predominantly Jewish urban area (Merrick, N.Y., for example), and you will often see the Eruv boundary wires running along telephone lines and stretching between the sides of buildings.

Wow, I’m surprised God let that one get past Him. His books are usually so free from ambiguity and the potential for multiple interpretations.


* * *

Mankind has long been in search of a very specific loophole, one that sets it apart from the rest of the animal kingdom.

The Judeo-Christian tradition makes the distinction clear: God made man and animals at separate moments. Most Western religions also postulate the existence of a soul, something that differentiates us from our even our simian brethren.

But it becomes considerably trickier to bifurcate the animal kingdom into Us and Them if you believe in evolution. As a kid I was told that our use of tools made us unique, but we now know that even crows do that. Optimists said that we were the only species with a sense of humor, pessimists said we were the only creature that killed its own kind, and both have long since been proven wrong. We can’t even tout our supposed dominance of the planet—individual insects outnumber humans by about 200 million to one.

And yet, as an ardent evolutionist, I do think we differ from animals in one enormous respect: the deliberate use of birth control. We have discovered the greatest loophole of all: Evolution has tried to coerce us into procreation by attaching great pleasure to the act of mating, and we’ve figured out how to couple up and get the goods while ignoring the “intent” of sex. Other species are slaves to their DNA, their genes calling the shots in their selfish attempts to get replicated and passed on; we, on the other hand, have the power to thwart our masters.

Thank goodness for loopholes. Sometimes they bedevil us, but they define us as well.