Archives for 2015

Daily Signal – Top Export-Import Bank Official Deletes Text Messages Sent During 2014 Midterm Elections

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A government watchdog has learned a top-ranking official at the Export-Import Bank deleted text messages sent during the 2014 midterm elections, sparking a lawsuit calling for the recovery of the records.  Cause of Action, a nonpartisan government accountability organization, submitted a Freedom of Information Act request to Ex-Im on Nov. 14, 2014, asking for text messages sent between top bank officials the week of the 2014 midterm elections, Nov. 2, 2014 to Nov. 8, 2014.  As a result of the FOIA request, the group learned that Scott Schloegel, Ex-Im’s chief of staff and senior vice president, deleted critical text messages during this time period.  When Ex-Im replied to Cause for Action’s FOIA request on May 12, 2015, six months later, they informed the group the messages were “accidentally deleted on approximately Jan. 1, 2015.” Additionally, Schloegel said in a signed declaration on March 27, 2015, that he “deleted, by mistake, the messages … on [his] phone for the period in question.”  “The fact that a top official at the Export-Import Bank deleted his text messages several weeks after our organization asked to see them raises serious questions,” Dan Epstein, Cause of Action’s executive director, said in a statement. “Furthermore, it’s puzzling that it took the bank another four months to let us know that this happened.”

Top Export-Import Bank Official Deleted His Text Messages After We Asked For Them

WASHINGTON — As the Export-Import Bank fights to renew its charter this week, it will also have to contend with a new lawsuit we filed today after learning that a senior bank official destroyed federal records.

Through the Freedom of Information Act, our organization discovered that Ex-Im’s Chief of Staff, Scott Schloegel, deleted text messages he sent and received during the week of last year’s election.

CLICK HERE TO READ OUR COMPLAINT

On November 14, 2014, Cause of Action submitted a Freedom of Information Act request to Ex-Im. The request sought text messages, Blackberry messenger chats and SMS messages sent or received by top officials during the period of days between November 2, 2014 and November 8, 2014.

Ex-Im received our FOIA request on November 20, 2014, yet it did not respond to us until May 12, 2015, nearly six months later.

In its response, Ex-Im said, “the messages for Scott P. Schloegel were accidentally deleted on approximately January 1, 2015.” In one of the documents produced to us, Schloegel states in a signed declaration that he “deleted, by mistake, the messages on . . . [his] phone for the period in question.”

The date of Schloegel’s signed statement was March 27, 2015 — over four months after the Bank received our request for his records.

Due to Schloegel’s destruction of records, we have filed a legal complaint against the Bank. The complaint calls on Ex-Im, and the National Archives and Records Administration, to ask the Justice Department and/or Congress to initiate action to recover the deleted messages.

Cause of Action Executive Director Dan Epstein issued the following statement:

“The fact that a top official at the Export-Import Bank deleted his text messages several weeks after our organization asked to see them raises serious questions. Furthermore, it’s puzzling that it took the Bank another four months to let us know that this happened. The public deserves to know what their government is up to, and we will work tirelessly to continue to hold these federal agencies accountable.”

The full list of officials whose records we sought includes:

  • President and Chairman Fred Hochberg
  • Senior Vice President and Chief of Staff Scott Schloegel
  • Deputy Chief of Staff Gaurab Bansal
  • Senior Vice President of Communications Bradley Carroll
  • Senior Vice President of Congressional Affairs Erin Gulick

Washington Free Beacon: Ex-Im Official Deleted Text Messages After FOIA Request

Read the full story: Washington Free Beacon

A top official at a controversial U.S. export finance agency deleted text messages sent within days of the 2014 midterm elections after a watchdog group filed an open records request for the messages, the agency admitted recently.  The watchdog group, Cause of Action, said the deletion amounts to “unlawful destruction of federal records” in a legal complaint filed on Wednesday.  The group filed a Freedom of Information Act request on Nov. 14 asking for text messages sent or received by top officials at the U.S. Export-Import Bank from Nov. 2 to Nov. 8.  Ex-Im responded months later, saying in a May reply that messages from Scott Schloegel, the chief of staff and senior vice president, “were accidentally deleted on approximately January 1, 2015,” more than a month after Cause of Action filed its FOIA request….

Cause of Action is now filing a legal complaint “to ask the Justice Department and/or Congress to initiate action to recover the deleted messages,” it announced on Wednesday.  The complaint alleges that Ex-Im violated the Federal Records Act—by its own admission—by failing to preserve official intra-office communications.  “The fact that a top official at the Export-Import Bank deleted his text messages several weeks after our organization asked to see them raises serious questions,” Dan Epstein, Cause of Action’s executive director, said in a statement. “Furthermore, it’s puzzling that it took the Bank another four months to let us know that this happened.”  Cause of Action’s Ex-Im FOIA request was the latest in what the group’s complaint describes as “an investigation into whether federal agencies comply with their obligation to preserve text messages for a period of time.”

Cause of Action Launches Investigation Into The Justice Department’s Settlements With Large Financial Firms

WASHINGTON – Cause of Action (CoA), a nonpartisan strategic oversight group committed to ensuring that discretionary decision-making is accountable, transparent and fair, has filed a Freedom of Information Act request seeking clarity from the Justice Department on its legal authority to enter into financial settlements and arbitrarily allocate settlement funds.

Additionally, CoA is petitioning the Treasury and Justice Departments to show how the bank settlements comply with the Miscellaneous Receipts Act and the Government Corporation Control Act.

Click here to view the FOIA and the petition for rule making

Last August, the Department of Justice entered into a record $16.65 billion settlement with Bank of America, marking the agency’s largest victory against major banks that sold residential mortgage-backed securities (RMBS) prior to the 2008 financial crisis. Related settlements reached with Citigroup and JP Morgan brought the total DOJ victory against these three banks to a whopping $36.65 billion.

Typically, settlement funds are directed to the Treasury for appropriation by Congress. Of that nearly $37 billion dollars in settlement funds, the Justice Department has directed $13.5 billion to consumer relief efforts and third-party consumer groups – that’s more than the entire IRS budget in FY2014.

For example, provisions of the BofA settlement require the bank to pay at least $20 million to housing counseling agencies approved by the Department of Housing and Urban Development and at least $50 million to Community Development Financial Institutions certified by the Treasury Department.

The payouts raise the question of whether the Justice Department has the legal authority to enter into these colossal settlements, and distribute funds to unrelated third parties instead of victims aggrieved by the Banks’ actions.

Cause of Action Executive Director Dan Epstein issued the following statement:

“Lacking accountability and proven effectiveness, when the government forces economic redistributions through discretionary grants, it not only hinders long-term social change, it encourages waste fraud and abuse by grant recipients who are not held accountable for protecting the poor versus protecting themselves.”

Policy experts have written and testified before Congress expressing their concern that the settlements impermissibly settle claims of DOJ and other agencies, improperly distribute funds to unrelated third parties, and do not ensure that the funds DOJ and third parties receive are used to redress the harms identified in the settlements.

To date, the Justice Department has failed to identify any legal authority allowing itself to arbitrarily mandate these measures. Absent regulatory guidance, federal agencies are required to go through the rulemaking process, which the Justice Department has not done.

During a recent House Judiciary Subcommittee on Regulatory Reform, Commercial and Antitrust Law hearing, Epstein testified that the “Bank of America settlements were not subject to notice and comment. These were unelected officials engaging in decision-making that the public had no stake in.”

Responding to inquiry from Rep. Hank Johnson (D-GA), Epstein noted, “in the case of Bank of America, that settlement agreement was never approved by a court. As you pointed out in your arguments about arbitration, you actually believe in a very robust court system. Yet that robust court system has nothing to do with the programs and policies that have been discussed here today.”

To ensure that government decision-making is transparent and fair in order to protect against the misuse of tax dollars and arbitrary abuses of discretion by the unelected, Cause of Action has requested access to the following documents pursuant to the Freedom of Information Act:

  • All records referring or relating to DOJ’s authority to agree to the Consumer Relief Donation Provisions of the RMBS Settlements.
  • All records referring or relating to DOJ’s authority to assume the contractual claims/settlement terms of the FDIC and SEC.
  • All records referring or relating to DOJ’s authority to enter into and/or reasons to execute the RMBS Settlements without notice and comment rulemaking.
  • All communications within DOJ, and/or between DOJ and any of the following: a) Bank of America; b) Citigroup; c) JP Morgan; d) FDIC; e) SEC; f) HUD; g) Treasury; h) the White House; i) the RMBS Working Group; and j) the states of California, Delaware, Illinois, Kentucky, Maryland, Massachusetts, and New York, regarding the RMBS Settlements.  You may limit the scope of this search to communications referring or relating to “Operation ChokePoint”, “CDFI”, HUD-approved housing counsel*”, “Neighborworks”, “Home Affordable Mortgage Program” and “HAMP”.
  • All records referring or relating to DOJ’s authority to bind private parties to comply with HAMP by entering into the RMBS Settlements.
  • All records referring or relating to (a) Huduser.org; (b) OMB Circular A-25; (c) the Chief Financial Officers Act; (d) the Anti-Deficiency Act; (e) “publicity or propaganda”; (f) the Colorado Division of Housing; (g) Empire Justice Center; (h) Center for New York City Neighborhoods.  You may limit the scope of this search to records concerning the Consumer Relief Donation Provisions.

Daily Caller: IRS Finds 6,400 New Lois Lerner Emails…Gives DUMBEST EXCUSE YET For Not Releasing Them

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The Internal Revenue Service found 6,400 more Lois Lerner emails — but they’re not handing them over in court.

The IRS’ latest excuses are nothing short of infuriating.  Department of Justice lawyers Geoffrey J. Klimas and Stephanie Sasarak, acting as counsel for the IRS, submitted a U.S. District Court filing June 12 in the case Judicial Watch v. Internal Revenue Service. The court filing, provided to The Daily Caller, claims the IRS received new Lerner emails from the Treasury Department’s inspector general (TIGTA) but can’t fork over the emails to Judicial Watch, a nonprofit group suing to get the emails. Why? Because the IRS is busy making sure that none of the emails are duplicates  – you know, so as not to waste anyone’s time.  However, the inspector general already made sure that none of the emails were duplicates, so the IRS’ latest excuse falls flat. Here are takeaways from the court filing….

TIGTA gave the IRS 6,400 Lerner emails that they recovered from backup tapes:…. TIGTA already checked for duplicate emails:… But the IRS is going to go ahead and do some “deduplication” anyway, just to make sure TIGTA de-duplicated correctly:…

The deduplication might take a long time:…

The IRS isn’t going to start de-duplicating the emails it has until AFTER it reviews “Lerner communications which were not forensically recovered.” In other words, they’re going to review Lerner emails that they DON’T HAVE before they look at the ones that they DO have:…

The legal advocacy group Cause of Action is also encountering ridiculous excuses in its own lawsuit to get Lerner’s emails. Secretary of the Treasury Jacob Lew, Obama’s former White House chief of staff, seized all of the emails that went back and forth between the IRS and the White House and won’t hand them over, arguing that since confidential taxpayer information was illegally disclosed in the emails, then it would be illegal to make the emails public – since they have confidential taxpayer information in them. Get it?

National Review: The Obama Administration’s Newly Political Approach to FOIAs

Read the full story: National Review

At the Treasury Department, the memo came down from the deputy executive secretary, Wally Adeyemo, in December of 2009. Going forward, the memo stated, “sensitive information” requested under the Freedom of Information Act was to be reviewed not only by career FOIA officials but also by a committee of political appointees, including Adeyemo and representatives from the public-affairs, legislative-affairs, and general counsel’s office, before release. What followed was an unusual review of Treasury FOIA requests by high-ranking political officials. And it didn’t just happen at Treasury, but at the IRS and the Department of Homeland Security, too. Current and former FOIA attorneys at these agencies say documents requested by the media have come in for special scrutiny, called “sensitive review,” often holding up release for weeks or months. At times, these officials say, political officials delayed the production of documents for political convenience. The policy runs counter not just to the spirit and the letter of the Obama administration’s pledge to unprecedented transparency, but also to the spirit of the Freedom of Information Act itself….

The Treasury Department is not alone in its use of the sensitive-review process. Internal documents suggest that the IRS (part of Treasury, but with its own policies), the Department of Homeland Security, and a number of other agencies have, to varying degrees, implemented similar procedures. At the IRS, for instance, when the legal watchdog group Cause of Action sued in 2012 to secure the release of documents under FOIA, it set off a spate of e-mails within the agency about whether the request had been subject to sensitive review. On October 12, John Davis, the agency’s chief of disclosure, wrote to Valerie Barta, a tax-law specialist, of Cause of Action’s original FOIA request: “This case we closed out in May of this year is coming back to haunt us. Gary wants to know why this was not on a sensitive case report. Can you pull this case and if you can tell why Susan didn’t put this on a sensitive case report?”

Washington Examiner: State Department preparing to probe Clinton email scandal

Read the full story: Washington Examiner

Records from the State Department’s office of inspector general reveal the agency watchdog has taken early steps toward investigating Hillary Clinton’s use of a private email address and server during her time as secretary of state.  Steven Linick, State’s inspector general since June 2013, signaled his office is making “preliminary” preparations for a larger probe of the policies that allowed Clinton to determine which of her official communications she wanted to withhold from the public, according to documents obtained by the nonpartisan watchdog group Cause of Action.  “In the past, when faced with employees who were using non-governmental email accounts for government business, the OIG questioned such activities,” Linick wrote in response to a letter from Sen. Charles Grassley, chairman of the Senate Judiciary Committee.  The Iowa Republican had written to Linick in March seeking answers about the communications and business activities of Clinton and her top aides that were then emerging in the media.  Cause of Action filed a Freedom of Information Act request to State’s inspector general and to the National Archives and Records Administration seeking records related to the Clinton email controversy.  A letter from the State Department inspector general dated May 15 claimed there were just 18 documents that ever mentioned Clinton’s emails, the national archives or the Clinton Foundation.  Just six of those were given to Cause of Action in their entirety, with the others being redacted or punted to the State Department for further review.  But the few records that the agency did release had nothing to do with the information requested, and were not even produced during Clinton’s time in office.