Archives for 2013

07/29/2013

IRS complaint against Enroll America

CoA sent a complaint to the IRS advising that Enroll America, a § 501(c)(3) organization, is in violation of several provisions of the Internal Revenue Code, and that an immediate investigation is warranted to determine whether its tax exemption should be revoked. Enroll America is primarily organized to benefit the health insurers, pharmaceutical companies, and other for-profit commercial entities represented on its board of directors and advisory council, and is therefore not organized to achieve any of the lawful purposes listed under IRC § 501(c)(3).

13909 Complaint

13909 Complaint Cover Letter

Exhibits

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07/18/2013

National Law Journal: Group Wants Justices to Lift Limits on Political Giving

Group Wants Justices to Lift Limits on Political Giving

By Marcia Coyle July 17, 2013

For its first brief in the U.S. Supreme Court, the Cause of Action Institute picked a controversial cause: an end to certain limits on individual contributions to federal candidates, political action committees and political party committees.

McCutcheon and Republican National Committee v. Federal Election Commission offers the Supreme Court an another opportunity to deregulate money in elections following its much criticized ruling in Citizens United v. Federal Election Commission in 2010. The justices will hear arguments in the case this fall.

The Cause of Action Institute, which describes itself as a nonprofit, nonpartisan government-accountability organization “that fights to protect economic opportunity when federal regulations, spending and cronyism threaten it,” has joined the legal fight with an amicus brief supporting challengers Shaun McCutcheon and the Republican National Committee (RNC).

“This is their first Supreme Court brief, but it’s right down their alley,” said Barnaby Zall of Weinberg, Jacobs & Tolani in Rockville, Md., counsel of record on the amicus brief. “They are an organization focused on government accountability and they work mainly with the [Freedom of Information Act]. They understand disclosure and rules. They looked at this issue as combining lots of issues that affected them.”

Under federal campaign finance laws, there are two types of limits on political contributions by individuals. Base limits restrict the amount an individual may contribute to a particular candidate committee ($2,600 per election); national party committee ($32,400 per calendar year); state, district and local party committee ($10,000 per calendar year (combined limit)); and political action committee (PAC) ($5,000 per calendar year). Aggregate limits restrict the total contributions that individuals may make in a biennial—two-year—election cycle.

McCutcheon and the RNC urge the justices to apply the most searching scrutiny—strict scrutiny—to those biennial limits and find that the limits violate the First Amendment. Under the aggregate limits, individuals may contribute $48,600 to candidate committees and $74,600 to non-candidate committees, of which no more than $48,600 may go to non-national party committees (state, district and local party committees (combined) and PACs).

The amicus brief by Cause of Action Institute walks the justices through the last 40 years of changes in the campaign spending and disclosure environment. Those changes, it argues, undercut the original rationale for the aggregate limits.

“In an era in which parties and campaigns compete not only with other like entities, but also with independent voices armed with the latest technology and an almost limitless ability to uncover, analyze and publish contributor information, does the rationale for the current aggregate limits survive?” the brief asks.

The rationale for the limits, according to Congress in 1974, was to prevent circumvention of the limits on individual contributions. As the Supreme Court said in its landmark campaign finance ruling, Buckley v. Valeo: “Congress was surely entitled to conclude that disclosure was only a partial measure, and that contribution ceilings were a necessary legislative concomitant to deal with the reality or appearance of corruption inherent in a system permitting unlimited financial contributions, even when the identities of the contributors and the amounts of their contributions are fully disclosed.”

But what was true of disclosure in 1974 is not true today, the institute posits in one of two key arguments.

“ ‘Fully disclosed,’ in 1974, meant buried in a mountain of paper filings” in a few offices, according to the institute, with little public access.

“Today, there are effective and efficient public and private alternatives, all designed to disclose and publicize any evasions of the contribution limit,” the brief argues. “The Justice Department, the media, and private organizations all use these technologies to monitor, in real-time, campaigns and donors, and release the results on the Internet free of charge, in formats expressly designed to be used by relatively unsophisticated analysts and observers.”

That difference between today and 40 years ago, the brief adds, demonstrates that the aggregate limits are no longer tailored to the problem that Congress was addressing.

And then there is Citizens United. That 5-4 decision lifting the ban on corporate and union independent spending, along with other court decisions, has created alternative methods for individuals to speak during campaigns, the institute says. That new freedom to speak has removed the major incentive to circumvent individual contribution limits.

“Those alternative means are readily available to cautious donors now,” the brief explains. “These lawful, compliant expenditures can be made by one speaker or in conjunction with others.”

The effect of the limits today is “to punish those few donors who want to support more candidates directly than the aggregate limits permit. Thus the aggregate limits are simply another attempt to prevent persons of wealth (or those who seek to promote challengers or innovative candidates) from associating in the manner they choose.”

Daniel Epstein, the institute’s executive director and former investigative counsel for the U.S. House Committee on Oversight and Government Reform, said the aggregate limits do not protect against the most serious type of political corruption today—so-called dark money contributions for which the identity of the donor does not have to be disclosed.

“We don’t usually write amicus briefs,” Epstein said. “Most of our litigation is directly representing clients. The reason we were motivated to work with Zall is he is obviously an election law expert and we tend to be free market. You want a marketplace of ideas not just in terms of economic transactions but in terms of speech as well. One of the things we basically argue is that the contribution limits are both over-inclusive and under-inclusive. It would have a potential limit on the kinds of discussions that we viewed as important. Minority groups, bloggers and others might be adversely affected by the limits.”

The ability of someone who wants to violate the law has diminished substantially, according to Zall. “That is recognized by the Department of Justice and others, but the interpretations of the law have not changed” he said, adding that the institute’s brief brings “a realization that the old interpretations don’t work in the new environment. What they end up doing is causing more problems than they would solve.”

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07/18/2013

The Hill: Dan Epstein: Who should be holding whom accountable?

Who should be holding whom accountable?

By Dan Epstein July 12, 2013

Inspectors General, who hold federal agencies accountable by conducting audits and, when needed, investigating alleged misconduct, are in place to provide oversight over how taxpayer funded federal agencies are operating. But what happens if the inspectors are allegedly conducting the misconduct?

A case in point is the recent investigation involving Department of Homeland Security (DHS) DeputyInspector General Charles Edwards and allegations of his misconduct and abuse. Senators McCaskill and Johnson share similar concerns to those of Cause of Action that have been brought forward by insiders at DHS. These concerns range from wasteful spending to the destruction of federal records, which is a criminal offense. We have already begun releasing documents we have obtained and are committed to exposing the truth about Edwards and his office.

But everyday Americans aren’t always afforded the time and resources to uncover the facts about government employees such as Edwards. That’s why, as a government watchdog group, Cause of Action is committed to exposing the overreach and cronyism fueling the federal government’s waste, fraud, and abuse of taxpayer dollars. As a result of our own investigation and information from insiders familiar with the DHS OIG office, Cause of Action sent a letter to President Obama on July 1 requesting that the President remove Edwards from his position. Edwards has failed to honestly and appropriately conduct investigations, manage subordinates, and has potentially misused public resources.

Cause of Action exposes these types of government accountability issues because Americans have the right to know how their government spends their hard earned money. We are rooted in the belief that regardless of party affiliation, we all deserve an efficient, effective government that protects our best interests rather than an ulterior political or personal agenda. Cause of Action concentrates on the decisions and rule making that may go unchecked at federal agencies.

Our staff of investigators, lawyers, and communications professionals frequently uses Freedom of Information Act (FOIA) requests to shed light on otherwise opaque facets of the federal government. We also seek to utilize valid tips from government employees who have noticed the misuse of taxpayer resources.

Our recent accountability work included a report on a Centers for Disease Control and Prevention’s (CDC) grant program revealing seven grant recipients who allegedly used federal funds to illegally lobby for tobacco taxes, clean air ordinances, and bans on sugar-sweetened drinks.

Our work doesn’t stop at exposing misuses of power; we fight to hold officials accountable through litigation and public education. Our litigation and investigations are tactical, covering a spectrum of issues and targets that are part of our greater mission to educate the public on how the government exercises its unchecked power.

By employing the checks and balances our government provides, whether through the courts or through Congressional investigations, our aim is to bring real public change through our investigations and litigation. We remain committed to shedding light on the discretionary power of unelected officials who spend our dollars and regulate our sources of livelihood.

Epstein is executive director of Cause of Action, a non-profit, nonpartisan government accountability organization.

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07/18/2013

FOIA Requesters Misled by Military to Waive Appeal Rights

UPDATE: We added clarification that our numbers concerning SOCOM’s FOIA appeals were taken from FOIA.gov

At least two military offices have been found to use a puzzling FOIA request form that may be an attempt to get requesters to give up their rights to appeal FOIA decisions.

The request forms, which are included below, appear on the FOIA web sites of the U.S. Army Special Operations Command (SOCOM) and the U.S. Navy’s Space and Naval Warfare Systems Command (SPAWAR). In both forms, the offices ask requesters to agree to accept “a releasable copy” of the requested records; however, they fail to expressly inform requesters that electing this option may legally prevent them from appealing if the agency withholds any records.

If requesters do not agree in advance to accept “releasable” records, the forms indicate that their request will be “referred to the appropriate reviewing authority for a final review and release determination.” This is precisely the procedure that the Department of Defense’s FOIA regulations already require. Specifically, all Department of Defense FOIA requests must be reviewed by a designated “Initial Denial Authority,” and all decisions to withhold requested records must be explained in sufficient detail so as to allow requesters to decide whether to appeal.

Making matters worse, SOCOM’s version of the FOIA request form implies that the referral procedure described above will dramatically increase the time needed to process the request, noting that “it could take a year” for a decision — essentially coercing the FOIA requester to select the “releasable” records option if they want to receive the production in a timely manner. As a result SOCOM’s form has effectively minimized FOIA appeals. During fiscal years 2008 to 2012, SOCOM adjudicated 933 FOIA requests, yet it received zero administrative appeals according to FOIA.gov. Do the zero administrative appeals accurately reflect that in fact there were no appeals by requesters during this four year period regardless of whether they accepted the “releasable” records option, or are these statistics the result of virtually all 933 FOIA requesters abdicating their rights to appeal?

Notably, these forms do not conform to the FOIA request template recommended by the Department of Defense’s main FOIA office. Nor are they even consistent with sample request letters provided by the FOIA offices of the Department of the Navy or the Department of the Army. In the words of Victor Hugo, no army can withstand the strength of an idea whose time has come. It is time for these forms to go.

SOCOM FOIA Request Form

SPAWAR FOIA Request Form

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07/9/2013

Secret Pentagon policy may delay responses to Freedom of Information Act requests

Department of Defense FOIA offices are prohibited from responding to “significant” FOIA requests having “departmental level interest” without approval from the Pentagon, according to a policy document obtained by Cause of Action from the DoD’s Inspector General.

A “significant” request is defined by the policy document as one where, in the judgment of a FOIA office, “the subject matter of the released documents may generate media interest and/or may be of interest or potential interest to DoD senior leadership.” This can include requests regarding “the current administration (including request for information on Senator Obama) previous administrations, and current or previous DoD leadership.”

The policy document further provides that if a “significant” request generates “departmental level interest,” the DoD FOIA office handling the request must forward its proposed FOIA response and all responsive records for departmental level clearance. Departmental level clearance is done at the DoD Freedom of Information Policy Office (DFOIPO) which is responsible for the formulation and implementation of FOIA policy guidance for DoD. The office was created in 2006 after President Bush signed an Executive Order aimed at improving the FOIA process, though the policy document in question was drafted only after President Obama took office.

The Pentagon’s FOIA review policy was initially revealed by the IG to Congress in 2010 in response to an inquiry concerning the politicization of FOIA. The IG did not comment on this policy or on DoD’s FOIA practices; it merely forwarded documents to Congress. Notably, neither the IG nor the Pentagon has proactively disclosed any of this information to the public.

This secrecy is especially troubling with respect to DFOIPO in light of its mission. Not only is this policy document omitted from a long list of “FOIA Policy Guidance” on DFOIPO’s Web site, but none of DFOIPO’s other publicly available FOIA material even mention this Department-wide policy. Those documents include DoD’s “Freedom of Information Act Handbook,” its annual FOIA reports to the Department of Justice, as well as a bi-annual newsletter “DoD FOIA News.” This is hardly the stuff of which transparent administrations are made, let alone one that claims to be the most transparent in history.