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12/6/2011

Did You Know You Paid To Lobby For More Taxes?

Cause of Action Investigates

Cause of Action has discovered that Stimulus grants have been improperly used to lobby for soda taxes and smoke-free ordinances. The grant program, titled Communities Putting Prevention to Work, is administered by the Department of Health and Human Services (HHS) and was designed to help state and local governments educate citizens on preventing obesity and excessive tobacco use. However, documents reveal that these grants have been used to persuade state and local representatives to vote in favor of soda taxes and anti-smoking laws.

Use of discretionary grants for lobbying is prohibited by federal law. Because of the gravity of the abuse, Freedom Through Justice has requested, in writing, that the offices of the Inspector General of Health and Human Services and the Recovery Act Transparency and Accountability Board open a full investigation into which grantees have used stimulus funds to engage in improper lobbying.

Regarding these violations, Executive Director Dan Epstein stated, “We hope that their offices will treat this revelation with the seriousness it deserves. The American Recovery and Reinvestment Act was intended to boost jobs and get the economy working again, not fill the pockets of well-connected lobbyists in the name of nanny-state politics.”

Cause of Action will continue to investigate how and when federal funds were used to lobby for taxes most Americans oppose.

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12/6/2011

COA Probes White House Political Activities

Sends FOIAs to Office of Management and Budget, Office of Governmental Ethics, Office of Special Counsel, and U.S. Navy

On September 23, 2011, Cause of Action sent FOIA requests to the OMB, OGE, OSC, and U.S. Navy seeking information about White House officials’ participation in political events.

Upon taking office, President Obama promptly signed Executive Order 13490, requiring every appointee in every executive agency to sign an ethics pledge concerning their communications with lobbyists or participation on matters related to their prior lobbying activities.[1]  The Executive Order allowed certain employees to be granted waivers from the order based on “exigent circumstances relating to national security or to the economy.” On April 22, 2010, the Office of Government Ethics (“OGE”) issued a memorandum finding “several situations in which ethics officials issued waivers . . . after employees acted in particular matters from which they should have been recused, or otherwise engaged in conduct that was prohibited.”[2]  Further, CoA questioned how officials at the Department of Education, Department of Labor, and the Peace Corps,[3] qualified for waivers based on “exigent circumstances relating to national security or to the economy.”

CoA also pointed out that recent news reports suggested that federal funds and property may have been used for political purposes despite the Hatch Act.  For instance, the New York Times reported that the Democratic National Committee (“DNC”) used the White House Blue Room to hold a campaign fundraiser[4] and that, while President Obama attended the fundraiser,[5] the meeting did not appear on his public schedule.[6]  According to a Politico report, all thirty guests were donors to President Obama’s 2008 campaign.[7]  Further, according to a New York Times article, the DNC organized and sponsored the event.[8]  The reports of the DNC meeting at the White House spurred congressional investigations, led by the  Committee on Oversight and Government Reform at the U.S. House of Representatives.[9]  Committee Chairman Darrell Issa noted that the meeting’s non-appearance on the President’s calendar “call[ed] into question its official nature.”[10]  According to one anonymous attendee, “It was policy-focused, but everyone knew why they were there.”[11]

Finally, CoA noted that the White House has claimed that the Office of Administration White House Counsel’s office is not an agency for FOIA purposes.[12]  The Office of Government Ethics, however, identifies K. Colleen Wallace as the Designated Agency Ethics Official for the White House Office of Administration/Executive Office of the President.[13]  Thus, it would appear that the White House does not consider itself an agency for FOIA purposes but does consider itself an agency for ethics purposes.

In its FOIA request, CoA sought information from the OMB, OGE, and OSC about their efforts (if any) to enforce the Hatch Act and Executive Order as well as information regarding their definition of agency.  CoA also sought information from the U.S. Navy, who manages the White House cafeteria, regarding the White House/DNC event.  CoA wrote that “[t]he American people have a right to know the Administration is enforcing its own ethics rules and complying with the Hatch Act.”  Further, “[t]he Freedom Through Justice Foundation is concerned that taxpayer funds, as well as the White House itself, may have been used for prohibited political purposes.”

Cause of Action is a 501(c)(3) nonprofit, nonpartisan public interest firm that uses public policy and legal reform strategies to ensure greater transparency in government, protect taxpayer interests and promote social and economic freedoms.  Follow CoA on Twitter (@TheCauseofAction) or Facebook (facebook.com/CauseofAction)

Document Productions

OMB(May 5, 2012)

 

[1] Exec. Order No. 13,490, 74 C.F.R. 4673 (2009).
[2] Don W. Fox, Memorandum to Designated Agency Ethics Officials, Re: Guidance on Waivers Under 18 U.S.C. § 208(b), Authorizations Under 5 C.F.R. § 2635.502(d), and Waivers of Requirements under Agency Supplemental Regulations, U.S. Office of Government Ethics, Apr. 22, 2010, available at http://www.usoge.gov/ethics_guidance/daeograms/dgr_files/2010/do10005.html.
[3] The Administration provided waivers to the Executive Order to Joseph Main (Department of Labor), Margot Rogers (Department of Education), James Shelton (Department of Education), Naomi Walker (Department of Labor), and Aaron Williams (Peace Corps).  See Report on Executive Order 13490, Ethics Branch Commitments by Executive Personnel, Mar. 31, 2010, available at http://oge.gov/directors_corner/reports/rpt_exorder13490.pdf.
[4] Nicholas Confessore, Obama Seeks to Win Back Wall St. Cash, N.Y. Times, June 12, 2011, available at http://www.nytimes.com/2011/06/13/us/politics/13donor.html?_r=2  (“The event, organized by the Democratic National Committee, kicked off an aggressive push by Mr. Obama to win back the allegiance of one of his most vital sources of campaign cash”).
[5] Id.
[6] Josh Gerstein, Carney defends Obama meeting Wall Street donors at White House, Politico, June 14, 2011, available athttp://www.politico.com/blogs/joshgerstein/0611/Carney_defends_Obama_meeting_financeworld_donors_at_White_House.html?showal.
[7] Josh Gerstein, All at DNC Blue Room meeting with Obama were donors, Politico, June 26, 2011,  available athttp://www.politico.com/blogs/joshgerstein/0611/All_at_DNC_Blue_Room_meeting_with_Obama_were_donors.html
[8] Nicolas Confessore, Obama Seeks to Win Back Wall St. Crash, N.Y. Times, June 12, 2011 available at http://www.nytimes.com/2011/06/13/us/politics/13donor.html.
[9] See, e.g., Josh Gerstein and Jake Sherman, Issa seeks DNC records of White House meeting, Politico, July 13, 2011, available athttp://www.politico.com/news/stories/0711/58908.html.
[10] Letter from Chairman Darrell Issa to Kathryn Ruemmler, July 11, 2011, http://www.politico.com/static/PPM153_camp.html
[11] Josh Gerstein, Donor meeting at White House draws fire, Politico, June 20, 2011, available at http://www.politico.com/news/stories/0611/57389_Page2.html#ixzz1XyAgzFrm
[12] The White House, Office of Administration – FOIA,http://www.whitehouse.gov/administration/eop/oa/foia/.
[13] Office of Governmental Ethics, Designated Agency Ethics Officials List, Aug. 12, 2011, available at  www.usoge.gov/Program-Management/DAEO-list-(as-of-Aug-12,-2011).
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12/6/2011

CoA Stands Up Against Government Regulation of Private Choices

Cause of Action has just filed a brief before the FDA on behalf of Trent Arsenault, a Bay Area man who has been ordered by the federal government to “cease manufacture” of sperm.  Over the last six years, Mr. Arsenault has helped thirteen couples conceive by donating his gametes to them at no cost.  Many of these couples would otherwise have been forced to spend tens of thousands of dollars at a sperm bank without any guarantee of results. Trent does not take any compensation for his services and donates simply out of his desire to help those in his community having trouble conceiving.

Despite this, the FDA last year classified Trent as a “firm” which is a “manufacturer of human cells, tissues, and cellular and tissue-based products.”  As such, the FDA ordered Trent to cease “manufacture” of his gametes unless he complies with regulations that normally apply to sperm banks.  Compliance with these regulations would cost tens of thousands of dollars and be practically impossible for Mr. Arsenault as he does not own, nor operate out of, a laboratory.  Trent has asked for an opportunity to tell his side of the story at a hearing, but the government opposed his request.

Cause of Action has decided to represent Mr. Arsenault because we are outraged at the intrusion of the FDA into the private lives of Trent and the people he helps.  The FDA admits that if Mr. Arsenault was a “sexually intimate partner” with the couples that he helps that he would be beyond their regulation, but they offer no definition of what that term means.  The FDA should not be in the business of deciding who is, and is not, sexually intimate, especially when doing so interferes with private individuals’ ability to start a family.

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12/6/2011

Federal Audit: ACORN Received Your Money

On October 19, 2011, Cause of Action (formerly known as Freedom Through Justice) successfully pressured NeighborWorks America to publicly release all Office of Internal Audit reports from January 2009 to the present.  Most of the public, even Washington insiders, have little idea that NeighborWorks – the government’s largest funder of foreclosure mitigation grants – had an internal audit office that conducted investigations.  One of the Office of Internal Audit reports titled, Special Audit on the Use of National Foreclosure Mitigation Counseling Program Grant Funds by ACORN Housing Corporation,Inc., and originally issued to former Senator Chris Dodd over a year ago, sheds light on the relationship between the Affordable Housing Centers of America (AHCOA, formerly Acorn Housing) and the Association of Community Organizations for Reform Now (“ACORN”).   According to the Audit, “[a]lthough AHC and ACORN might be incorporated as separate entities in form and structure, the financial transactions noted below evidence extensive relationships between both organizations that may undermine claims of an ‘arm’s length relationship’ between them.”  In fact, NeighborWorks found the following violations by AHCOA:

  1. The awards of ABC-executed contracts with ACORN, totaling $6.1 million, violated the intent of the OMB A-110 “organizational conflict of interest” and “revision of budget and program plans” requirements;
  2. The contractual awards are highly material in that significant shares (44% and 17% for Rounds 1 and 2, respectively) of total funding were outsourced to ACORN;
  3. The contract awards to ACORN represent major overruns against both (a) planned amounts for outreach represented in AHC’s  applications  for NFMC funding and (b) AHC’s  formal representations  to NeighborWorks America shortly before issuance of these contracts;
  4. Significant relationships were evidenced between AHC and ACORN; calling into question whether these were valid arms-length transactions. The Round 1 contract was non-competitive (sole source) and the Round 2 contract was awarded after AHC received just one bid.

While it is now clear that AHCOA and ACORN are affiliated, these revelations by NeighborWorks came too late, as the U.S. Department of Housing and Urban Development (“HUD”) issued a $350,000 grant on September 2, 2011 and a $300,000 grant on August 8, 2011, to AHCOA.  Despite NeighborWorks’ audit showing these grants to have violated the Continuing Appropriations Resolution signed by President Obama on December 16, 2009, HUD has continued to enrich AHCOA at the taxpayers’ expense.

Sadly, it appears that NeighborWorks’ delay in releasing its report may have been intentional, as a Government Accountability Office (“GAO”) appropriations decision determining AHCOA was not an ACORN affiliate became final on September 29, 2011 and therefore not subject to reconsideration.  (See Cause of Action’s letter to the GAO requesting they review their decision).
Based on Cause of Action’s investigation, it was able to determine that Congress asked NeighborWorks to post its internal audits several months ago, but the recommendation was at first denied by NeighborWorks’ Board of Directors.   One of these Board members is an Assistant Secretary at HUD.  Given the fact that HUD’s General Counsel determined AHCOA was not an ACORN affiliate, it should be no surprise that HUD would attempt to prevent the release of an audit that refuted its conclusions concerning the relationship between AHCOA and ACORN.

NeighborWorks’ Board reconsidered its decision after Cause of Action put additional pressure on NeighborWorks by highlighting that the public has a right to know how hundreds of millions of their tax dollars are being spent and whether their money was going to an organization synonymous with corruption.  Cause of Action Executive Director Dan Epstein celebrated NeighborWorks’ decision to release the reports.  Epstein stated, “I hope they will continue to adhere to the Obama administration’s stated goal of increased government transparency and ethics. The new information provided in these documents further shows the need for the federal government to obey the law and ensure that no affiliate of ACORN, including AHCOA, receives one cent of taxpayer money.”

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12/6/2011

CoA Puts DOJ on the Spot in Lobbying Enforcement

 August 30: CoA demands lobbying compliance assurances; September 9: DOJ announces new compliance efforts.

On August 30, 2011, Cause of Action wrote to Keith Morgan, the Department of Justice official charged with enforcing the Lobbying Disclosure Act, stating “[w]hile significant progress has been made in implementing the provisions of the Act, we have serious concerns about the enforcement of the Lobbying Disclosure Act (“LDA”).”

CoA reported that the U.S.Attorney’s  Office for the District of Columbia, which is charged with enforcing the LDA, receives thousands of referrals of potential LDA violators from Congress, yet the vast majority of these referrals remain pending, with no resolution. As it stands,135 referrals are still pending from 2007, when House and Senate officials referred 241possible LDA violations to the U.S.Attorney’s Office for follow-up action.

DOJ has now received referrals regarding 2,680 lobbyists ororganizations that have not filed required reports on their campaign contributions or other political spending. However, not one of these non-filers has been sent a non-compliance  letter by the U.S. Attorney’s Office.  Additionally, Senate officials have referred a cumulative total of 8,281 possible LDA violators to the U.S. Attorney’s Office.

CoA demanded that DOJ provide all records pertaining to lobbyists or organizations that have not filed required reports on their campaign contributions or other political spending and requested records concerning DOJ’s enforcement efforts.

On September 9, 2011, the BNA reported “A Justice Department official said Sept. 9 that more aggressive action would be taken to achieve compliance with the federal Lobbying Disclosure Act[.]”

This official was DOJ’s Keith Morgan.

According to BNA, Morgan recently announced that his office will ramp up enforcement efforts and has made progress in an effort to create a database of potential LDA violators and to identify repeat offenders who appear to be ignoring the requirements of the law. Those identified are being contacted by the U.S. Attorney’s Office and could be subject to fines.

BNA reported that the DOJ’s Public Integrity Section currently has “about 50 pending investigations involving possible campaign finance violations or other public corruption charges. . . . DOJ’s Washington headquarters reviews all the cases and has become much more involved in litigating the matters in court.”  BNA referenced the DOJ’s current high-profile prosecution of John Edwards, the former Democratic senator and vice presidential candidate, on campaign finance charges.

Cause of Action has a dynamic and diverse legal staff whose wide range of experiences include congressional oversight and public interest litigation. CoA advances its mission using a combination of research, litigation and media outreach. CoA employs public oversight as a tool to keep the federal government acting lawfully and to bring politicization and mismanagement to the public’s attention through:

• Litigation
• Freedom of Information Act Requests
• Ethics Complaints
• Internal Revenue Service Complaints
• Federal Election Commission Complaints
• Requests for Investigations

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12/6/2011

CoA Asks EPA to Delay Rule

New Materials Call Into Question EPA’s Fundamental Assumptions

Cause of Action joined the Institute for Liberty, Americans for Prosperity, and the Center for Rule of Law in asking the Environmental Protection Agency to reassess certain assumptions it made in its proposed rule entitled National Emission Standards for Hazardous Air Pollutants From Coal and Oil-Fired Electric Utility Steam Generating Units and Standards of Performance for Fossil-Fuel-Fired Electric Utility, Industrial-Commercial-Institutional, and Small Industrial-Commercial-Institutional Steam Generating Units (“Utility MACT”).  (Read the Petition here)
A reliability assessment by Office of Electric Reliability (“OER”) of the Federal Energy Regulatory Commission (“FERC”) and other materials that became available after the close of public comment in this matter raise issues of central relevance to the rulemaking. These materials cast doubt on the fundamental assumptions underlying EPA’s “appropriate and necessary” finding, and major aspects of its proposed Utility MACT rule that impact electric reliability. They demonstrate in particular that EPA “entirely failed to consider an important aspect of the problem” before it, namely the proposed rule’s impact on regional and local electric reliability and the combined impact on reliability of EPA’s rulemaking agenda.

The groups asked the EPA to delay its rule-making timetable in order to digest the information they presented, as well as to consider the North American Electric Reliability Corporation’s (“NERC”) long-term reliability assessment due in November 2011, which will be the first cumulative assessment of EPA’s rulemaking agenda to evaluate the localized reliability impact of the proposed Utility MACT rule.

CoA Executive Director Daniel Epstein stated:

CoA’s concerns as petitioner focus on two issues: first, the costs and harms to jobs and second, the lack of transparency involved in the rule-making process.

As for the issue of costs, Senator Inhofe (R-OK) recently indicated that the EPA’s Utility MACT rule would risk plant closures, increase electricity rates, and destroy as much as 1.4 million current jobs.  Forty-percent of electric capacity in the United States is based on coal; the EPA rule, without re-opening comments to consider new facts, represents an assault on affordable energy.

Second, the EPA, by burying studies by the Office of Electric Reliability and FERC as well as impatiently avoiding the North American Electric Reliability Corporation study, ignores that electric reliability is a local issue and needs to be assessed at the regional and local levels to ascertain likely shortfalls and bottlenecks.  EPA has committed to a rushed rulemaking schedule that will not allow it to consider North American Electric Reliability Corporation’s report—which will be the first report by any organization to assess the local impact of EPA’s Utility MACT.

There are also transparency concerns involved, which relate directly to legal requirements that EPA rules present a “reasoned analysis.”  Senator Inhofe requested that EPA Administrator Lisa Jackson clarify the extent to which EPA has worked with a number of agencies on the issue of electric reliability. According to Senator Inhofe, “EPA has failed to collaborate with FERC to consider how Utility MACT will affect electric reliability. . . . FERC Commissioner Moeller went as far as to say that ‘the Commission has not acted or studied or provided assistance to any agency, including the EPA.’”

EPA reported this year that the Agency and the Federal Energy Regulatory Commission (FERC) were jointly modeling the potential for coal-fired power plant closures prompted by Utility MACT.  However, as FERC’s response to a May 17 letter from Senator Lisa Murkowski (R-AK), Ranking Member of the Senate Energy Committee, revealed, nothing as extensive as joint modeling has occurred.

Cause of Action is a 501(c)(3) nonprofit, nonpartisan public interest firm that uses public policy and legal reform strategies to ensure greater transparency in government, protect taxpayer interests and promote civil and economic freedoms.

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12/6/2011

ACORN Gets Another $350,000 In American Taxpayers’ Money

Documents released this month by the United States Department of Housing and Urban Development show that ACORN affiliate Affordable Housing Centers of America (AHCOA) received over $350,000 in Pennsylvania despite a Congressional ban on funding the organization.  According to a HUD press release, AHCOA received $350,030.64 “to provide counseling assistance relating to mortgage modification, avoiding potential mortgage scams, and assisting victims of scams.”  This comes on the heels of last week’s revelation that AHCOA received $300,000 from HUD in August and an earlier report that AHCOA received almost $80,000 in April.

The Daily Caller’s coverage of FTJ’s efforts at exposing AHCOA and ACORN were covered in a story last week describing HUD’s award of $300,000 and a story today describing the $350,000 award.

In late 2009 Congress prohibited the government from funding ACORN or any ACORN affiliates, subsidiaries or allied organizations.  Not surprisingly, records recently uncovered from the Louisiana Secretary of State show that on January 8, 2010, ACORN simply changed its name to AHCOA.  HUD’s own press release removes any doubt that the Affordable Housing Centers of America (AHCOA) is not distinct from ACORN Housing by stating, “Since 1985, Affordable Housing Centers of America (AHCOA) has been providing housing counseling services to low and moderate and minority communities and fighting housing discrimination.”

The name-change trick apparently worked, because in a September 29, 2010 report, the U.S. Governmental Accountability Office found that AHCOA was not, “as presently configured. . . an affiliate, subsidiary, or allied organization of ACORN,” thus allowing ACORN/AHCOA to continue receiving federal funding.

If Congress does not ask the GAO to review its decision by September 29, 2011, the GAO’s funding determination will become unreviewable.

Freedom Through Justice Foundation Executive Director stated:

It is obvious that the President and his Housing and Urban Development Department are completely ignoring the will of Congress.  Despite clear evidence that ACORN merely changed their name to AHCOA, HUD continues to disingenuously maintain that AHCOA is not an affiliate of ACORN.  HUD’s September 2, 2011 grant is the latest instance of the American taxpayers’ money being improperly steered to an entity with a history of financial mismanagement and corrupt election activities.  In just the past year, AHCOA’s receipts from HUD have gone from $80,000 to $300,000 to $350,000; it’s a matter of time before AHCOA is receiving several million dollars per year of taxpayer dollars.

The Freedom Through Justice Foundation is a 501(c)(3) nonprofit, nonpartisan public interest firm that uses public policy and legal reform strategies to ensure greater transparency in government, protect taxpayer interests and promote social and economic freedoms.  Follow the Foundation via Twitter: @FTJFoundation.

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