Idiot.
And it isn't illegal at a national level. I doubt it is (or would hold up) on a state level:
http://www.usflag.org/uscode36.html
This code is the guide for all handling and display of the Stars and Stripes. It does not impose penalties for misuse of the United States Flag. That is left to the states and to the federal government for the District of Columbia. Each state has its own flag law.
Criminal penalties for certain acts of desecration to the flag were contained in Title 18 of the United States Code prior to 1989. The Supreme Court decision in Texas v. Johnson; June 21, 1989, held the statute unconstitutional. This statute was amended when the Flag Protection Act of 1989 (Oct. 28, 1989) imposed a fine and/or up to I year in prison for knowingly mutilating, defacing, physically defiling, maintaining on the floor or trampling upon any flag of the United States. The Flag Protection Act of 1989 was struck down by the Supreme Court decision, United States vs. Eichman, decided on June 11, 1990.
While the Code empowers the President of the United States to alter, modify, repeal or prescribe additional rules regarding the Flag, no federal agency has the authority to issue 'official' rulings legally binding on civilians or civilian groups. Consequently, different interpretations of various provisions of the Code may continue to be made. The Flag Code may be fairly tested: 'No disrespect should be shown to the Flag of the United States of America.' Therefore, actions not specifically included in the Code may be deemed acceptable as long as proper respect is shown.
Here's the section of the *code* in question:
(c) No other flag or pennant should be placed above or, if on the same level, to the right of the flag of the United States of America, except during church services conducted by naval chaplains at sea, when the church pennant may be flown above the flag during church services for the personnel of the Navy. No person shall display the flag of the United Nations or any other national or international flag equal, above, or in a position of superior prominence or honor to, or in place of, the flag of the United States at any place within the United States or any Territory or possession thereof: Provided, That nothing in this section shall make unlawful the continuance of the practice heretofore followed of displaying the flag of the United Nations in a position of superior prominence or honor, and other national flags in positions of equal prominence or honor, with that of the flag of the United States at the headquarters of the United Nations.
And:
http://www.krnv.com/Global/story.asp?S=7163998The ACLU of Nevada is concerned about recent media reports that it is "illegal" to fly foreign flags over the U.S. flag.
While there is indeed a federal law regulating the display of the U.S. flag, that law is merely advisory and simply codifies standard government practice in displaying the American flag.
There are some pretty scary comments out there about this.