Archives for August 2016

CIA too busy for transparency

Central Intelligence Agency (“CIA”) records recently disclosed to Cause of Action Institute indicate that the agency’s watchdog refused to honor a congressional request for an inquiry into politicized Freedom of Information Act (“FOIA”) processes because its staff was “fully engaged in other matters.”  Just as alarming, the CIA Inspector General only responded to Congress nearly two years after the request for an inquiry was sent.  Cause of Action Institute obtained these documents after it filed a lawsuit to compel production of records responsive to a FOIA request that had been pending at CIA for three years.   

In August 2010, Senator Chuck Grassley and Representative Darrell Issa wrote to the Inspectors General of twenty-nine (29) different agencies—including the CIA—to request investigations into the role of political appointees in responding to FOIA requests.  Sen. Grassley and Rep. Issa were concerned that non-career officials were intentionally delaying responses and inappropriately influencing decisions to withhold information from the public.  The newly disclosed records confirm that the CIA waited two years to tell Congress that it was simply too busy to conduct an inquiry—despite the fact that the other twenty-eight agencies contacted by Congress carried out the requested audit and released their special reports proactively or under FOIA.

The Obama administration has a poor track record on transparency issues.  Agencies have unfairly politicized FOIA by adopting “sensitive review” procedures that permit political appointees, senior officials, and public affairs staff to participate in processing document requests.  As reported by the House Oversight Committee, such politicization led to retaliation by leadership against a disclosure officer at the Department of Homeland Security.  Cause of Action Institute uncovered politicized FOIA processes at the Department of Housing and Urban Development.  And other sources have detailed “sensitive review” at the Environmental Protection Agency, the State Department, and the Treasury.

But politicization goes beyond internal agency processes.  Under a previously non-public 2009 White House memorandum, agencies are instructed to consult with the Office of the White House Counsel—the president’s lawyer—before producing any documents that involve so-called “White House equities.”  The result of the memo is the unlawful expansion of White House control of agency FOIA processes and usurped agency responsibility for finalizing determinations.

In May, CoA Institute filed a lawsuit against eleven (11) agencies and the White House to end the administration’s practice of delaying responses to FOIA requests that are considered “politically sensitive” or embarrassing.”  Read more HERE.

Read the CIA’s letter to Sen. Grassley and Rep. Issa HERE.
Read CoA Institute’s FOIA Complaint against the CIA HERE.


Release to One, Release to All

The Department of Justice Office of Information Policy recently announced that it is asking Executive Branch agencies to begin implementing a new policy under the Freedom of Information Act known as “release to one, release to all.”  Under this policy, when an agency releases a FOIA production to the requester, it will also place the production on its website for the public to access.  The federal government processed more than 700,000 FOIA requests last year, which means this policy will bring a lot more government information to the public.

Today, Cause of Action Institute submitted the comment below to the White House Office of Management and Budget and the DOJ Office of Information Policy urging it to consider several issues as it finalizes this policy.

CoA Institute Investigates $400 Million Cash Payment to Iran, Hidden “Side Agreement” During Nuclear Negotiations

Washington, DC – Today, Cause of Action Institute (CoA Institute) sent Freedom of Information Act requests to the U.S. Department of State and U.S. Department of Treasury seeking information surrounding the widely reported $400 million cash payment the Obama administration sent to Iran in January.  Recent revelations about this previously undisclosed cash payment has called into question whether the State Department and other executive branch agencies engage in secret, potentially unlawful negotiations with foreign governments, designed to evade Congressional and public notice and oversight.

Cause of Action President and CEO, and former federal judge, Alfred J. Lechner, Jr.: “Since 1984, Iran has been listed as a state sponsor of terror; it has been subject to various financial sanctions.  Serious concerns about money laundering and terrorist financing in Iran persist. Details regarding this payment and the supposedly coincidental timing of the hostage release have been hidden from the public and Congress.”

Administration officials, including State spokesmen John Kirby, denied any connection between this payment and the release of American hostages, asserting that the payment was part of a separate settlement agreement, despite reports that the Iranians considered the cash payments “ransom.”

Because any transaction with Iran in U.S. dollars violates U.S. sanctions provisions, the $400 million payment was reportedly made entirely with foreign currency and flown into Iran on wooden pallets onboard an unmarked cargo plane. It has also come to light that Department of Justice officials apparently objected to the payment on legal and policy grounds, but were overruled by the State Department.

In a related but separate matter, CoA Institute is also investigating allegations of a secret “side agreement” the State Department apparently negotiated with Iran last year that would ease restrictions on its nuclear program. In July 2015, the United States, along with six other countries, finalized a controversial agreement involving Iran’s nuclear program.  Under the agreement, Iran was supposedly barred for a 15-year period from engaging in nuclear research and development. Despite widespread criticism from Congress, the agreement went into effect beginning in October 2015.

However, within the last few weeks, contents of a secretive “side agreement” have been revealed.  According to the Associated Press, this side agreement allows Iran to start replacing its stockpile of uranium centrifuges with thousands of more sophisticated models beginning in 2027 instead of 2031.  Such a process could cut the time needed to develop weapons-grade uranium to six months or less. If confirmed, this side agreement would significantly reduce the timeframe for Iran to re-build its nuclear capabilities. Despite such serious consequences, this agreement was hidden from the public and from members of Congress.

In order to further examine these issues, CoA Institute today requested records and internal agency communications surrounding these issues.

The letter to the Department of Treasury can be found here.
The letter to the Department of State can be found here.

More Broken Promises: Taxpayer-subsidized electric car company misses debt payment

According to recent reports, GreenTech Automotive—the electric car company that was once a joint venture between Virginia Governor Terry McAuliffe and Chinese investor Charles Wang—missed its first repayment on a $3,000,000 public loan from the Mississippi Development Authority (“MDA”).

The story of GreenTech is one of broken promises. In a series of investigations, which culminated in the publication of a comprehensive report in 2013, Cause of Action Institute explained how GreenTech used McAuliffe’s political connections to garner millions of taxpayer dollars in loans and tax incentives, yet failed to meet expectations, instead exaggerating projections of job creation and vehicle production.

According to the Memorandum of Understanding between GreenTech and the MDA, the company promised to invest at least $60 million in the state and create at least 350 full-time jobs within three years of starting commercial production.  In exchange, Mississippi officials promised to loan $2 million to local government to purchase the plot for the company’s production facility, and to provide a direct loan to GreenTech of $3 million.  GreenTech also received a host of tax breaks and incentives valued at $25 million.

As of May 2016, however, sources suggest that GreenTech employs merely 75 people and has failed to sell a single vehicle.  On top of its apparent inability to make good on its promises to taxpayers, the company’s added failure to meet the initial repayment deadline on the public-funded loan calls into question the economic viability of the entire project.

GreenTech and its former chairman, Governor McAuliffe, have been embroiled in other controversies. The company is under investigation by the SEC for its participation in the EB-5 Immigrant Investor Visa Program, through which it has received approximately $46 million in foreign capital, according to some reports.  The watchdog for the Department of Homeland Security also reported that McAuliffe and friends—including as Anthony Rodham, brother of former Secretary of State Hillary Clinton—benefited from political favoritism in the administration of the EB-5 program.

It is unknown whether Mississippi officials will take action against GreenTech for its failure to perform under the loan agreement. But taxpayers should be concerned that the company be given a mere slap on the wrist for its apparent misuse of public funds.

Read Cause of Action Institute’s report on GreenTech Automotive HERE

Related documents can be found HERE