Archives for April 2015

Weekly Rundown 4-30-2015


National Review: It Appears the State Department Has Had a Policy of Retaining Senior Officials’ Emails Since 2009 – The State Department has provided Cause of Action with documents showing that the department has required emails to be preserved since 2009. According to the documents, the department should have had possession of Secretary Clinton’s email records when Mrs. Clinton left office. The fact that they did not have possession of her emails raises still pressing questions… Read More

Washington Examiner: State Department allowing Clinton Foundation to approve emails for release – “State Department officials began allowing the Clinton Foundation to review emails the government planned to release to Congress and Freedom of Information Act requesters in January 2014, prompting a process that has delayed the publication of agency records for months.”… Read More

Cause of Action: HHS Inspector General Finds Potential Misuse of Obamacare Federal Grant Dollars – The IG for HHS, Daniel R. Levinson, recently sent a letter to Centers for Medicare & Medicaid Services expressing concern that Obamacare state exchanges may be unlawfully spending federal grant dollars to fund operations… Read More

CNN: IRS watchdog finds 6,400 missing Lois Lerner emails – The Treasury Inspector General for Tax Administration has found emails from Lerner that were previously thought to be permanently deleted… Read More

Washington Times: Obama clean energy loans leave taxpayers in $2.2 billion hole – Even after Obama administration officials promised that these projects would pay for themselves, taxpayers have now been left holding the bag… Read More

HHS Inspector General Finds Potential Misuse of Obamacare Federal Grant Dollars

By: Aram Gavoor

The Inspector General for Health and Human Services, Daniel R. Levinson (HHS IG), sent a letter this week to Centers for Medicare & Medicaid Services (CMS) expressing concern that Obamacare state exchanges (State-based marketplaces or SBMs) may be unlawfully spending federal grant dollars to fund operations.  The HHS IG identified the issue in the midst of audits of establishment or startup grant monies disbursed to SBMs.

The violation of the law is under Section 1311(a) of the Affordable Care Act (ACA), which requires that since January 1, 2015, SBMs must be self-sustaining.  According to the HHS IG: “We have concerns that, without more detailed guidance from CMS, SBMs might have used, and might continue to use, establishment grant funds for operating expenses after January 1, 2015, contrary to law.”

This is not, however, the first time that ACA grant funds have potentially been misused.

In September 2014, Cause of Action exposed the fraudulent misuse of Navigator grant funds by Southern United Neighborhoods (SUN) in light of allegations that United Labor Unions Local 100 (ULU), a federal subgrantee of SUN, directed an ACA navigator, paid with federal grant funds, to recruit members for ULU in Texas.

In a letter to the HHS IG requesting an investigation and audit of SUN, Cause of Action explained that a former employee of SUN filed a class action lawsuit in which he sought damages for unpaid overtime for himself and other putative class members under federal labor law.  He alleged that SUN and ULU shared control of the terms and conditions of his Navigator duties, and that he was directed by the labor union to recruit new ULU members by engaging cafeteria workers at schools in the course of his ACA work.  OMB Circular A-133 and relevant HHS regulations mandate that federal grand funds may only be used for approved programmatic purposes, which does not include such behavior.

Cause of Action is cautiously optimistic that SUN and ULU will be held accountable for their potential misuse of ACA grant money.  The HHS IG recently sent a letter to Cause of Action, confirming that there is an “open and ongoing investigation concerning this matter.”  Both of these instances evince the need for the HHS IG to conduct a robust investigation/audit into the misuse of Obamacare funds.

National Review: It Appears the State Department Has Had a Policy of Retaining Senior Officials’ Emails Since 2009

Read the full story: National Review

When State Department spokeswoman Jen Psaki told reporters that the emails of senior officials at Foggy Bottom weren’t automatically archived until “February of this year,” it raised the question of why Hillary Clinton had claimed that her emails to colleagues were automatically saved.

“What was her foundation for even that? Did someone incorrectly tell her that that was happening, or did she incorrectly make such a self-serving assumption?” former Justice Department Office of Information and Privacy director Dan Metcalfe wondered to Politico.

Cause of Action (CoA), a government transparency group, thinks it has the answer. “[The State Department] just provided Cause of Action documents showing that the department has required emails to be preserved since 2009,” Dan Epstein, the group’s executive director, says in a written statement to National Review.

The documents Epstein references, which were released to Cause of Action by Undersecretary of State Patrick Kennedy, provide guidance on the State Department’s record-keeping policy.


CoA April 2015 Newsletter

Read our monthly newsletter here.

The Daily Ledger: Time For Hillary To Come Clean

Washington Examiner: New Voices for 2015

Read the full story: Washington Examiner

The Washington Examiner’s editors and reporters have identified the intellectuals, policymakers, think tank leaders, campaign operatives, candidates, pols, pundits, wonks and others who are pushing our thinking and testing the limits of political possibility.


Some names on this list are already familiar to many; others will be virtual unknowns. This is as it should be. We set out to find people who are not yet fully in plain view above the horizon, which is why you won’t find party leaders or presidential hopefuls on this list. Instead, we sought out talented iconoclasts whose ideas on politics and policy are likely to be heard and should be listened to — but who may not earn the attention of the national media on a regular basis…


Dan Epstein’s organization, Cause of Action, is a leader in the world of government transparency and accountability. It advocates for FOIA reform laws, files lawsuits and conducts its own research and investigations. Called the “most active nonprofit you’ve never heard of,” Cause of Action has investigated everything from Hillary Clinton’s violations of the Federal Records Act, to possible fraud in a visa-for-cash program administered by the DHS, to overbilling by the Chicago Transit Authority. Epstein is no newcomer to the accountability game: Before his work at Cause of Action, he served on the Counsel for Oversight and Investigations at the House Committee on Oversight and Government Reform. Expect Epstein and Cause of Action to stay in the headlines as they work to hold the powerful accountable.

Law360: LabMD Loses Bid To Exclude FTC Docs In Data Security Row

Read the full story: Law360

An administrative law judge on Thursday shot down LabMD Inc.’s bid to block the Federal Trade Commission from introducing into the parties’ data security fight new evidence related to the origin of an allegedly leaked patient file, rejecting the lab’s argument that the documents were clearly inadmissible.


In his order, Chief Administrative Law Judge D. Michael Chappell denied LabMD’s motion to prohibit the FTC from using or offering into evidence six documents that contain additional information about how data security firm Tiversa Holding Corp. came across a LabMD patient file that Tiversa allegedly found on servers outside the company and turned over to the regulator.


LabMD argued in its March 25 motion to exclude that the agency shouldn’t be allowed to introduce the proposed exhibits because it would cause unfair prejudice and confusion due to the agency’s undue delay in obtaining and producing the documents. According to the lab, the evidence should have been produced pursuant to a September 2013 subpoena that the FTC issued to Tiversa that sought all documents related to LabMD, but were withheld by the data security company.


But Judge Chappell declined to side with the lab in his order Thursday, instead ruling that the present record in the case “fails to support the conclusion that the subject documents are clearly inadmissible for all purposes” and that the possibility still existed that the FTC could use the documents to rebut the lab’s defense…


Reed Rubinstein, a Dinsmore & Shohl LLP partner and the senior vice president of litigation at Cause of Action, which is representing LabMD in the administrative proceeding, told Law360 on Friday that his side was encouraged by the judge’s decision to leave open the possibility that the evidence could still be excluded at a later time.


“It seemed as though the judge’s ‘wait and see’ attitude was a suggestion perhaps that our arguments had not fallen on deaf ears,” he said.