Archives for October 2014

The Weekly Standard: The Blame-Deflection Game

Read the full story: The Weekly Standard

The waste is not confined to NIH, either. The Weekly Standard reported last year that the Centers for Disease Control, which presumably should also be fighting Ebola, was using part of its $12.5 billion Obamacare slush fund to campaign for tougher state liquor laws. A 19-month investigation by watchdog Cause of Action concluded the use of these funds violated the law and was “a front for lobbying, government propaganda, and cronyism.”

LIBRE Joins Litigation Regarding “Operation Choke Point”

LIBRE Joins Litigation Regarding “Operation Choke Point”
Obama Administration Abuses Regulatory Regime

(Washington, D.C.) – Today the LIBRE Initiative Institute (LIBRE) filed an amicus brief in support of the Community Financial Services Association of America v. FDIC challenge to the administration’s Operation Choke Point (Choke Point). LIBRE filed the brief – which was written by the nonprofit government oversight group Cause of Action – arguing that the government abused its power and conducted Choke Point without transparency or accountability and without accounting for the Collateral damage that it has done to Hispanic businesses, their customers, or the communities they serve.  Choke Point is an initiative quietly organized and implemented by the Federal Deposit Insurance Corporation (FDIC), the Department of Justice (DOJ), and other agencies. Banks and other financial institutions have been investigated and pressed to cut off financing to a range of businesses that the administration believes to be acting against public Interest . These include legal activities such as payday loans, tobacco, ammunition, fireworks, and many others.

This operation has received little public scrutiny, and was not publicly debated or analyzed for its impact on the targeted businesses, their customers or the broader economy. Questions have been raised regarding the administration’s decision to target a broad range of legal activities – rather than concentrating taxpayer dollars on fighting crime. Additionally, many of the businesses hurt by the operation provide access to Capital and services of particular value in the Latino community. This unilateral action has forced many enterprises to close – with a disproportionate impact on jobs and services in Latino communities nationwide. It is wrong for the administration to crack down on completely legal commercial activity – stripping consumers of market choice – through agency pressure applied to financial institutions rather than an open and transparent process.

Read the brief here.

 Jorge Lima, Policy Director of The LIBRE Initiative Institute released the following statement:

President Obama continues to use unilateral executive action to push forward on a flawed policy agenda that is hurting the Latino community more than it’s helping. Wages are down and jobs are hard to find – but we continue to see the same policy prescriptions that have failed in the past. Now the administration is using its power to undermine industries that it deems detrimental, while ignoring the fact that it is unfairly punishing business owners and infringing upon the private prerogative of banks to evaluate business according to their models – ultimately limiting the choices available to individuals.

The federal government should stop trying to arbitrarily undercut or shut down businesses it doesn’t like, and allow for an open debate, with proper opportunity for comment and analysis, rather than wielding administrative power. We have seen what happens when there is no discussion of proposed policy alternatives with the unintended consequences of Obamacare. The president and his administration shouldn’t be so eager to repeat the same mistakes.

For interviews with a LIBRE representative, please contact: Brian Faughnan, 703-650-1100 or Steven Cruz, 703-650-1100.

Cause of Action Requests Investigation and Audit of Affordable Care Act Navigator in Texas for Potential Misuse of Federal Funds

FOR IMMEDIATE RELEASE                                                                         CONTACT:      

September 30, 2014                                                Mary Beth Hutchins, 202-400-2721

Cause of Action Requests Investigation and Audit of Affordable Care Act Navigator in Texas for Potential Misuse of Federal Funds

Allegations against Southern United Neighborhoods and United Labor Unions Point to Misuse of Federal Funds by Failing to Comply with Navigator requirements

WASHINGTON – Cause of Action (CoA), a government oversight organization, requested today that the Inspector General of Health and Human Services investigate and audit Southern United Neighborhoods (SUN) for potential fraud in light of legal allegations that United Labor Unions Local 100 (ULU), a federal subgrantee of SUN, directed an Affordable Care Act (ACA) navigator, paid with federal grant funds, to recruit members for ULU in Texas.

In a letter to Inspector General Daniel Levinson, Cause of Action states:

“Under the Internal Revenue Code, SUN’s primary purpose cannot be to support a non-charitable purpose. Moreover, OMB Circular A-133 and appropriate HHS regulations require that federal grant money be used for an approved programmatic purpose, which is belied by ULU’s alleged direction of a federally-funded navigator to conduct recruiting activities for the benefit of the labor union.  Given the amount of federal dollars at issue – over $1.3 million — the Inspector General should investigate SUN and conduct an audit into the potential misuse of ACA navigator funds.”

You can read the full letter here.

About Cause of Action:

Cause of Action is a non-profit, nonpartisan government accountability organization that fights to protect economic opportunity when federal regulations, spending and cronyism threaten it. For more information, visit

To schedule an interview with Cause of Action’s Executive Director Dan Epstein, contact Mary Beth Hutchins,



Powerline: Is another Obama Administration Scandal About to Explode?

Read the full story: Powerline

So, for more than three years Obama has managed to keep the lid on this scandal by hiding the Inspector General’s report. Along with Koch Industries, the Washington Free Beacon and a government watchdog group called Cause of Action made Freedom of Information Act requests for documents relating to the Inspector General’s investigation. When the Obama administration refused to produce any responsive information, Cause of Action sued.


On September 29, a federal district judge in Washington ruled in Cause of Action’s favor. Cause of Action had asked for all documents related to any investigation by TIGTA into the unauthorized disclosure of tax return information to anyone in the Executive Office of the President. The Obama administration made a “Glomar response,” which means that it would neither confirm nor deny the existence of any responsive records, on the theory that doing so would itself reveal information protected under FOIA.

Washington Post: Judge: IRS watchdog not exempt from disclosure law in White House case

Read the full story: Washington Post

The judge’s order came as part of a lawsuit by Cause of Action, a conservative organization that has accused the Obama administration of targeting taxpayers for harassment.


Dan Epstein, the group’s executive director, called the court’s decision a “decisive win” for government transparency and accountability. “The court has ruled that the federal government cannot hide behind confidentiality laws to prevent Americans from knowing if our president has gained unauthorized access to their tax information,” he said.

Courthouse News Service: IRS Auditor Must Process Tax Disclosure Request

Read the full story: Courthouse News Service

Plaintiff Cause of Action, a nonprofit formerly known as the Freedom through Justice Foundation, filed a wide-ranging Freedom of Information Act request with the Internal Revenue Service in October 2012.

Among the items it sought were any documents related to investigations of IRS employees disclosing tax return information to the Executive Office of the President.

That portion of the request was passed on to the Treasury Inspector General for Tax Administration. TIGTA is organized under the Department of the Treasury, but is independent of the department, according to its website. It audits and investigates IRS operations.

Daily Caller: After Holder: Four Things The Next Attorney General Must Address

Read Dan Epstein’s op-ed in the Daily Caller here.

Attorney General Eric Holder may be heading for the exit door at the Department of Justice (DOJ), but numerous gaps in the agency’s enforcement remain. Will the next attorney general address fraud, transparency, and oversight concerns? We recommend four issues the next attorney general can and should resolve.

Transparency: Eric Holder’s Department of Justice declared its dedication to transparency and openness, going so far as to issue a memo to all agency heads on the Freedom of Information Act, declaring, “In the face of doubt, openness prevails.” In practice, however, this is perhaps the most secretive DOJ on record. The Associated Press Washington Bureau Chief Sally Buzbeesays the transparency of the Obama administration “is significantly worse than previous administrations.”

Cause of Action, a government oversight organization of which I am executive director, found that improper White House review of FOIA requests violated both the letter and spirit of FOIA. We are now suing the Department of Justice for allowing the White House to obstruct the processing of FOIA requests — an integral part of open and transparent government. The next attorney general should enforce Eric Holder’s promise of a bias toward disclosure, by taking decision-making about FOIA productions away from the White House and placing it back in agencies where it belongs.

IRS Political Targeting: Americans have known for over a year about the Internal Revenue Service’s political targeting of non-profit groups. Cause of Action first petitioned DOJ to look into this scandal in May 2013. While an investigation has begun, the DOJ assigned an attorney from the Civil Rights Division (CRD), which mostly prosecutes hate crimes cases and conspiracies to violate civil rights, to investigate the IRS. If criminal violations are uncovered in the investigation, the CRD may not have the authority to handle them, given its jurisdiction. That is why the next attorney general should appoint a special counsel to direct the investigation.

Lois Lerner’s Emails: Perhaps the most confounding part of the IRS scandal is the somehow “lost” emails of Lois Lerner, the IRS official at the heart of the scandal. Cause of Action’s investigation indicates that in losing this valuable information, multiple government officials violated the Federal Records Act, which instructs agencies to create their own regulations regarding document retention. IRS regulations, for instance, required Ms. Lerner to print and file her emails and her attachments. By failing to preserve Lerner’s records, the IRS may have violated its own regulations — and therefore the Federal Records Act.

To this day, the Department of Justice refuses to investigate this potential violation of law, so we urge the next attorney general to conduct an investigation to determine if there has been a violation of the Federal Records Act.

The Chicago Transit Authority: In 2012, Cause of Action provided the Department of Justice with evidence of up to $150 million in rampant fraud at the Chicago Transit Authority, a government entity with close ties to the current administration. As we noted at the time, DOJ has a duty to deal with this issue — the agency has the power to intervene on behalf of other federal agencies to recover misspent taxpayer dollars using the False Claims Act. DOJ declined to take up the case. Cause of Action is continuing to pursue this fraud lawsuit against the CTA because American taxpayers deserve accountability. The next attorney general should intervene in False Claims Act litigation even if they may be politically unfavorable.

We hope the next Attorney General resolves these four issues.  Attorneys in the Department of Justice have a saying: “Do Justice.” Four simple steps would allow the next AG to ensure justice is done.

Dan Epstein is the Executive Director of Cause of Action.