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03/12/2018

Bankrupt: Terry McAuliffe’s Crony Green Energy Venture Folds

There has been yet another development in the saga of GreenTech Automotive—the “green energy” car company that sought to profit from its ties to former Virginia Governor Terry McAullife, Chinese businessman Charles Wang, and Secretary Hillary Clinton’s brother, Anthony Rodham.  According to papers filed in federal court last month, GreenTech and its sister corporations, including Gulf Coast Funds Management—GreenTech’s “cash-for-visas” outlet—are declaring bankruptcy.

GreenTech cites various reasons for its financial woes but emphasizes negative publicity stemming from critical reportage by the Franklin Center’s Watchdog.org, as well as investigations into possible fraud and wrongdoing by the Securities and Exchange Commission and the Department of Homeland Security Office of Inspector General.  GreenTech’s bankruptcy petition recounts that the company “received investments aggregating $141.5 million from a total of approximately 283 investors,” nearly all of whom were Chinese nationals lured by the promise of permanent residency through the EB-5 Immigrant Investor Regional Center Program.  (The future of the EB-5 visa program remains undecided by Congress.)

But nobody seems to know where all that money has gone, and former Governor McAuliffe and his former partners have never adequately explained its disappearance.  Although GreenTech refers to “personnel issues” and “other difficulties experienced in pursing” an “ambitious business plan,” there is little evidence that much capital was ever spent on employee salaries or manufacturing, let alone research and development.  As recently as May 2016, GreenTech employed only seventy-five people, never finished building a fully-operational manufacturing plant, and never sold a single vehicle.

In addition to the newly-initiated bankruptcy proceedings, GreenTech is still embroiled in several ongoing lawsuits.  The State of Mississippi sued the venture last November to recover $6 million in taxpayer-funded loans and to seek forfeiture of the land provided for the never-realized car factory.  GreenTech originally promised to create upwards of 25,000 jobs in the state, but later signed a pledge to invest $60 million and create 350 full-time jobs.  Even those promises came to naught.

GreenTech—and Governor McAuliffe in his personal capacity— is also defending itself in a lawsuit filed by thirty-two Chinese nationals, who describe the crony venture as being part of a “$120 million scam.”  Because GreenTech never created a sufficient number of qualifying jobs under the EB-5 visa program’s rules, these foreign investors face revocation of their green cards and deportation.  They seek damages of at least $17.92 million.  The court is now considering GreenTech’s motion to dismiss, as well as a request that proceedings be stayed pending resolution of the bankruptcy petition.

As I have previously discussed, GreenTech has been a suspicious operation from the start.  It thrived only as long as it could rely on its politically-connected principals.  When Cause of Action Institute released its investigative report on GreenTech in September 2013, we warned how the company’s exaggerated job-creation estimates, questionable advertising, and readiness to take advantage of favorable political connections, could violate federal law and be part of a larger scheme to defraud investors.  It appears those warnings are now proving prescient.

Unfortunately, a crony venture such as GreenTech Automotive is not an outlier.  For years, taxpayers have subsidized failed businesses that rely on political connections to transfer wealth to their principals, who then walk away without consequences while leaving others to pick up the pieces.  It is time to get the government and the American taxpayer out of the business of picking economic winners and losers.

Ryan Mulvey is Counsel at Cause of Action Institute

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03/12/2018

NOAA Records Demonstrate Expansion of Sensitive Review FOIA Procedures

The Freedom of Information Act (“FOIA”) ensures all citizens equal and open access to records of the administrative state.  It should come as no surprise, however, that the Executive Branch has never been thrilled about disclosing its records to the general public.  At various times, the White House has orchestrated efforts to frustrate prompt disclosure of records under the FOIA, and President Trump is no exception.  In its first year, the Trump Administration has expanded the so-called sensitive review process.  In doing so, agencies have denied FOIA requesters their statutory right of prompt access to government records.

Sensitive review refers to the practice of giving certain FOIA requests extra scrutiny, usually because the records they seek could solicit media attention once disclosed.  The sensitive review process may involve an agency’s public affairs team or other communications specialists, and often includes political appointees at the agencies involved.  The process delays and sometimes prevents disclosure of records that the public has a right to see.

Recently, Cause of Action Institute (“CoA Institute”) learned that at least one agency—the National Oceanic and Atmospheric Administration (“NOAA”)—has expanded the sensitive review process by putting FOIA requests from attorneys into a special class.  In some cases, the agency has done this out of fear it would release records that could be used against it in litigation.  These evasive tactics violate the spirit and purpose of the FOIA.  They cannot and should not be tolerated.  Sensitive review of requests based on the identity of a requester can only reflect the Administration’s efforts to limit the disclosure of records, or at least the segment of requester to whom such information is provided, rather than representing any legitimate concern.

Investigating NOAA’s “High Visibility” FOIA Process

For some time now, CoA Institute has been concerned that NOAA may be abusing the sensitive review process to avoid disclosing information it would rather keep hidden.  In one FOIA production from the agency, for example, NOAA used dubious grounds to redact an email and one of its attachments almost in their entirety, as shown below.

One of the two tracking tables attached to this email included a list of incoming requests at NOAA.  NOAA withheld the substantive information concerning those requests—such as the identities of the requesters, the tracking numbers of their requests, and their respective fee category (e.g., representative of the news media)—under attorney-client privilege.  But it is difficult to credit that such benign tracking information would be privileged, particularly when many agencies regularly release FOIA logs containing just this sort of information.

The second tracking table attached to the email reflected NOAA’s contributions to a Department of Commerce-wide effort to track requests pertaining to the Trump Administration’s transition period.  For example, in response to a request from ProPublica, NOAA was unable to locate any records of correspondence with former Trump nominee Todd Ricketts.  Unlike the NOAA-specific tacking table, however, the information about departmental requests was left unredacted in most instances.

Newly Released Records Provide Details about NOAA’s Enhanced Sensitive Review

In an attempt to understand NOAA’s sensitive review practice, on December 11, 2017, we submitted a FOIA request to NOAA seeking access to all records about the agency’s practice of identifying “high visibility” FOIA requests, as well as its tracking of requests concerning the Trump transition.  This week the agency provided an interim production of responsive records, and the records produced are helping us piece together just what the agency considers to be a high visibility request.

As noted, sensitive review refers to the practice of giving certain FOIA requests extra scrutiny, including by bringing political appointees into the review process.  At the Department of Treasury during the Obama Administration, for example, a whole committee of political appointees—along with representatives from the agency’s public affairs, legislative affairs, and general counsel offices—availed themselves of the opportunity to review responsive records and delay disclosures.  In the past, sensitive review has been used to target media requesters and frustrate the release of potentially embarrassing or politically-damaging agency records.  It even prompted an investigation by the House of Representatives Committee on Oversight and Government Reform.

NOAA’s current sensitive review policy, according to one of the recently-produced records, appears to have been formulated in May 2017.  FOIA staff are expected to “[p]rovide the Office of Public Affairs each Thursday afternoon” with “weekly reports listing incoming FOIA requests of interest.”  Weekly meetings are also anticipated to discuss these requests.  The types of requests that elicit agency “interest” include those from the media and those that seek records in the public interest.  But they also include any request “submitted by an attorney.”  Moreover, NOAA’s Office of Public Affairs has the authority to “identify requests of interest warranting OPA review of response determinations.”  Although NOAA’s policy doesn’t require political appointees to insert themselves into the FOIA process, it does appear to represent a worrisome subordination of career FOIA staff to the agency’s communications shop.  That flies in the face of good government.

In our estimation, one of the more troubling aspects of NOAA’s new policy is the agency’s decision to treat FOIA requests from “lawyers” as deserving special scrutiny.  What is the basis for such treatment?  According to one of NOAA’s weekly FOIA reports, CoA Institute—a non-profit organization that is routinely recognized as a news media requester under the FOIA—was subjected to this heightened sensitive review when we requested processing notes for several earlier requests concerning the Antiquities Act.

In the “Comments” column, NOAA FOIA staff noted some alarming details about what it considered important for the Office of Public Affairs to consider:

Regardless of the motivation behind CoA Institute’s, or anyone’s, request, it is illegitimate for an agency to treat a requester differently simply because the agency fears the requester may enforce his rights in a court of law.  FOIA litigation is unique in that there is a tremendous asymmetry in knowledge between the parties about the processing of a request.  That can make it difficult for a requester to challenge agency affidavits defending the adequacy of a search or the use of an exemption.  Courts already routinely defer to such affidavits.  It now seems NOAA wants to fight against anything that could result in the public learning more about the way a request is processed.  Subjecting requests for processing notes to sensitive review could also suggest that NOAA is strategically laying the groundwork for the future application of the attorney-client or attorney work product privileges, namely, by memorializing the agency’s expectation of future litigation—no matter how distant, unreasonable, or disconnected that “expectation” may be from reality.

NOAA’s fear of a “litigation risk” from CoA Institute even prompted the flagging of other requests from unrelated parties about similar topics.

The fear of possible litigation also underlies the agency’s reticence to produce FOIA logs—basically, a type of processing note—when those records implicate subject-matters that could receive media attention.

NOAA continues to process CoA Institute’s December 11, 2017 request, and we have yet to review all the records that have been disclosed thus far.  Many of these records are in Word or Excel format and contain detailed metrics on the performance of NOAA’s FOIA office, including efforts to eliminate the backlog of pending requests.  As we review the available data and begin to receive correspondence reflecting sensitive review deliberations, we will provide additional updates on our website.

Sensitive Review as a Form of FOIA Politicization

The enhanced sensitive review at NOAA is concerning.  But it also confirms a growing suspicion in the news media and the FOIA requester community that the Trump Administration is intentionally increasing the involvement of agency leadership and political appointees in the processing of FOIA requests.  Last December, the Washington Post reported that officials at the Environmental Protection Agency (“EPA”) and the Department of the Interior (“Interior”) had started to “keep closer tabs” on incoming requests for records that could be embarrassing or politically damaging to the Administration.  More recently, a senior career official at the Department of Housing and Urban Development (“HUD”) claimed to have been “barred from handling” requests submitted by the Democratic National Committee because she was perceived to be a “Democrat,” and therefore opposed to the Administration’s interests in limiting the disclosure of embarrassing of politically-damaging information.

As I have explained, the improper interference by political appointees in the administration of the FOIA is hardly new.  It has been ongoing for years regardless of which party controlled the White House and in a variety of federal agencies, including the Department of Treasury, the Department of Housing and Urban Development, the EPA, Interior, the State Department, the Department of Veteran Affairs, the Department of Defense, and the Department of Homeland Security (“DHS”).  (Admittedly, it does seem that DHS has made efforts to limit political appointees’ involvement in FOIA administration.)

To the extent President Trump has sought to avoid transparency and open government—to chip away at the “colossus” of FOIA, as Nate Jones has described—he is following in the unfortunate and inexcusable footsteps of his predecessors.  That action should not go uncontested.  CoA Institute remains committed to holding the White House and every federal agency accountable when they violate the spirit and letter of the FOIA.

Ryan Mulvey is Counsel at Cause of Action Institute

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03/9/2018

Appellate Court Unfreezes Small Business Owner’s Assets After Being Wrongly Targeted by FTC

Washington, D.C. – The 11th Circuit Court of Appeals has ruled to unfreeze in part the assets of our client, Robert Cupo, who owns a small family-run tech support company, Vylah Tec, LLC (“V-Tec”), after the Federal Trade Commission (“FTC”) used misleading evidence to convince the lower court to grant a damaging injunctive order against his company. The ruling rejects the government’s clear overreach in not only freezing assets of the company, but also the joint marital assets of Mr. Cupo and his wife, and the assets of his brother who had no business connection to V-Tec.  Cause of Action Institute (“CoA Institute”) filed an appeal of the district court’s order in September 2017.

CoA Institute Senior Counsel Cynthia Crawford: “The Government attempted to bulldoze Mr. Cupo and his family with punitive financial penalties before they had an opportunity to defend themselves. The preliminary injunction was granted based on faulty and mischaracterized evidence. That’s not due process, and it certainly is not justice. After nine long months of financial hardship, a large portion of the burden has finally been lifted, allowing our client to continue to fight to clear his name.”

The 11th Circuit found that the district court “did not make sufficient factual findings to support freezing these assets.”

Case Background:

V-Tec provides tech support to customers and also sells third-party antivirus and other data security software. In May 2017, the company’s headquarters was raided by FTC regulators, in conjunction with the Florida Attorney General’s office, on suspicion of “deceptive” sales practices.

To obtain the injunctive order that froze the Cupos’ assets, the FTC in court cited two examples of recorded calls that were both mischaracterized. The Government conceded that it submitted false evidence. Nonetheless, a Florida district court judge granted the injunctive order turning V-Tec’s operation over to a third-party receiver and freezing the assets of Mr. Cupo and several of his family members.

The 11th Circuit ruling vacates the asset freeze imposed against the assets held jointly by Mr. Cupo and his wife, as well as the asset held by his brother.

The full opinion can be found here.

For information regarding this press release, please contact Zachary Kurz, Director of Communications at CoA Institute: zachary.kurz@causeofaction.org.

 

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03/8/2018

DHS Fails to Locate Records Concerning Compliance with Federal Records Act over Private Web-based Email Accounts

Cause of Action Institute (“CoA Institute”) filed a Freedom of Information Act (“FOIA”) appeal with the Department of Homeland Security (“DHS”) yesterday, challenging the adequacy of the agency’s search for records concerning the use of private web-based email accounts by former DHS officials, as well as efforts to recover federal records from those officials’ accounts, as required by the Federal Records Act (“FRA”).  Although DHS disclosed two records in response to our request—namely, a letter from the National Archives and Records Administration (“NARA”), which expressed concern over the possible alienation of federal records, and DHS’s response to NARA—DHS’s repeated representations in federal court demonstrate the existence of countless other responsive records.

High-Ranking DHS Officials Received “Waivers” to Use Private Web-based Email Accounts

In July 2015, Bloomberg reported that then-Secretary Jeh Johnson and at least twenty-eight other senior officials at DHS were granted special permission to used private web-based email accounts—such as Google and Yahoo—to conduct official business.  These “waivers” were exceptions to an agency-wide ban on the use of private email that was imposed in April 2014.  Agency insiders admitted that the practice of issuing such waivers was a “national security risk.”  As reported by Politico, DHS ended its use of waivers, but the agency still faced numerous FOIA requests—and a lawsuit brought by Judicial Watch—from those seeking access to the work-related records created or received on the private web-based email accounts.

CoA Institute’s Initial Investigation into the DHS Webmail Waivers

On September 11, 2015, CoA Institute submitted a FOIA request to DHS for all agency records maintained on Secretary Johnson’s—or any other official’s—private web-based email account.  We also sought records concerning the DHS webmail waiver regime, including policies on how waivers were granted or guidance on record retention that may have been provided to waiver recipients.  In response to the request, DHS provided a substantial number of records concerning the actual processing of waivers, but it failed to produce any official correspondence from the private accounts.  Although we appealed that determination, DHS upheld the adequacy of its search, even though it had openly admitted in court to having control over actual responsive records.  A federal district court judge even issued a preservation order to ensure that former officials would continue to cooperate with recovery efforts under the Trump Administration.

Exploring DHS’s Compliance with the Federal Records Act

Armed with the knowledge that DHS was working to recover potential federal records from Secretary Johnson’s private web-based email account, as well as the accounts of three other former officials, CoA Institute filed two additional FOIA requests on June 1, 2017.  We asked both DHS and NARA to disclose records concerning NARA approval for the practice of issuing webmail waivers, as well as records reflecting the agencies’ compliance with their FRA obligations.  For example, we wanted to know whether DHS had involved the Attorney General in recovery efforts, or whether anything had been done to recover records from the other twenty-five webmail recipients that were not the subject of Judicial Watch’s ongoing FOIA litigation.

DHS could only locate two responsive records.  The first was a February 22, 2017 letter from NARA, which was prompted by the Judicial Watch lawsuit and raised concerns about the possible alienation of federal records.  NARA asked DHS to prepare a report on its recover efforts, along with a description of the “safeguards” that had been implemented to prevent the future alienation of records from private web-based email accounts.  The second responsive record was DHS’s Mary 19, 2017 response to NARA, in which the agency described its ongoing communications with Secretary Johnson and others to facilitate the return of potential federal records.  DHS claimed it was unable to locate any other responsive material.

This is an absurd determination.  DHS has repeatedly described its ongoing efforts to comply with the FRA and to ensure that work-related emails from the private web-based email accounts are returned to the agency, at least with respect to the four officials identified by Judicial Watch.  Whither the records of such communications?  CoA Institute’s request to DHS was intentionally broad and sought to capture, among other things, “any correspondence from a webmail recipient indicating that he or she no longer ha[s] possession of DHS records in a personal email account, or that he or she ha[s] forwarded them to a DHS-hosted email account, and any records evidencing agency efforts to confirm the truth of such representations.”

As for our request to NARA, that agency has failed to provide any sort of interim response, let alone a final determination, despite the fact it had granted CoA Institute’s FOIA request expedited processing.

The Lack of Transparency in Agency Compliance with the Federal Records Act is Troubling

The Obama Administration established a pattern of high-ranking officials using personal email accounts to conduct agency affairs, thereby potentially ignoring federal laws that require the preservation of records for future disclosure to Congress and the American public.  The lack of transparency with respect to the use of private email is concerning enough; the lack of transparency over efforts to remedy abusive and unauthorized use of personal email, and to return records to agency custody, is even more worrisome.  Government-oversight organizations such as CoA Institute have increasingly been forced to seek judicial relief to ensure agency compliance with the FRA, and this tendency is only likely to increase given the pace of technological development.

DHS seems to be working extra hard to keep secret whether it has fully met its FRA obligations.  It was certainly embarrassing for the agency when its practice of issuing waivers that allowed agency leadership to use private web-based email accounts came to light.  It will be even more embarrassing if evidence surfaces to show that DHS is still dragging its feet to recover those records, as required by law.

Ryan Mulvey is Counsel at Cause of Action Institute

 

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03/6/2018

CoA Institute Criticizes the Presidio Trust on Flawed FOIA Rule

Cause of Action Institute (“CoA Institute”) submitted a comment today to the Presidio Trust concerning the agency’s publication of a flawed FOIA rule intended to revise the agency’s Freedom of Information Act (“FOIA”) regulations. Congress created the Presidio Trust in 1996 to oversee and manage interior lands of The Presido, a national park on the northern tip of the San Francisco Peninsula, which is part of the Golden Gate National Recreation Area. Specifically, CoA Institute explained that the Trust’s flawed FOIA rule fails to correct its definition of a “representative of the news media” in line with statutory and judicial authorities.

News Media Fee Category

The Presidio Trust’s proposed rule marks the agency’s first effort to update its fee provisions in roughly twenty years.  Yet despite ample time to review recent legal developments, and notwithstanding the Trust’s reliance on the Department of Justice template for agency FOIA regulations, which correctly advise agencies to eliminate the so-called “organized and operated” standard from their definition of a “representative of the news media,” the Trust still missed an important deficiency in its rulemaking.

The “organized and operated” standard, which the Presidio Trust has improperly retained, has been used in the past to deny news media requester status to nascent media groups and government watchdog organizations like CoA Institute.  Indeed, CoA Institute took another agency—the Federal Trade Commission—to court, and argued its case all to the way to the D.C. Circuit, just to get the agency to acknowledge that its similar retention of the “organized and operated” standard was unlawful and led to improperly denying CoA Institute a fee reduction.  The D.C. Circuit eventually issued a landmark decision in CoA Institute’s favor to clarify proper fee category definitions and their application in FOIA cases.

CoA Institute has succeeded in convincing a number of other agencies to adopt a proper definition of “representative of the news media” in line with the FOIA statute and controlling case law.  Those agencies include, among others, the Consumer Product Safety Commission, Office of the Special Counsel, Department of Defense, U.S. Agency for International Development, and Department of Homeland Security.  We hope that the Presidio Trust will likewise revisit its flawed FOIA rule and eliminate the “organized and operated” standard in lieu of a proper definition of a news media requester.

Ryan Mulvey is Counsel at Cause of Action Institute

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02/28/2018

NOAA FOIA Response Suggests Refusal to Search Council Member Email Accounts for Records on At-Sea Monitoring Amendment

Earlier this month, Cause of Action Institute (“CoA Institute”) filed an administrative appeal of a final response by the National Oceanic and Atmospheric Administration (“NOAA”) to CoA Institute’s Freedom of Information Act (“FOIA”) request concerning NOAA’s efforts to expand industry funded at-sea monitoring—specifically, to the herring and mackerel fisheries—and to lay the foundation for industry funding across all of New England and the Mid-Atlantic.  NOAA’s processing of the request suggests that the agency failed to search email accounts belonging to members of the fishery management councils even though they are subject to public disclosure.  Based on the limited records that were disclosed, NOAA’s search appears improperly limited to its own employees.

The Industry-Funded Monitoring Omnibus Amendment

Over the past five years, the New England and Mid-Atlantic Fishery Management Councils (“NEFMC” and “MAFMC,” respectively) have worked on a controversial omnibus amendment that would require more fisherman to pay for at-sea monitoring.  Industry-funded monitoring has already been imposed on the groundfish fleet, despite a long-fought legal challenge, devastating economic consequences, and historically-depressed fishery performance.  Industry funding in the herring and mackerel fisheries will cost fishermen between $710–$818 per day at sea.  That is more than the average daily revenue of many fishermen and will render fishing unprofitable for countless small-scale family businesses.

CoA Institute submitted a written comment in response to the poorly-designed and ill-timed omnibus amendment.  Although the MAFMC decided to table the project for at least a year, the New England Council elected to forge ahead with the herring fishery.  According to a recent presentation by NOAA staff, the agency is now reviewing a draft proposed rule.  The NEFMC’s official “timeline” indicates the rule will be published this month.  A final rule is expected to follow in June 2018.

The December 7, 2017 FOIA Request and Appeal

In an effort to investigate how the Councils and NOAA responded to our comment, we filed a FOIA request for “[a]ll records concerning” the comment, “including any correspondence between or amongst members of the New England and Mid-Atlantic Councils; officials, employees, or representatives of NOAA; or any other third party.”  When we received a response, we were surprised that the agency only found seven responsive records—five of which were part of a single e-mail chain with most substantive content redacted to protect NOAA’s “deliberative” processes.

The other two records were an email that we sent to then-Regional Administrator John Bullard with a courtesy copy of our comment, and an email from Dr. Christopher Moore, Executive Director of the MAFMC, forwarding our comment to members of the Council.

NOAA failed to disclose any records from the members of the regional councils.  Even the record from Dr. Moore was the version received by John Bullard, as highlighted here:

NOAA’s failure to locate, process, and disclose relevant records from Council members is a serious deficiency in its response.  Council records—including members’ email correspondence—are subject to the FOIA, even if those records are stored in private email accounts.  The regional councils conduct important business that has a serious impact on the livelihoods of Americans involved with the fishing industry.  The process by which fishery rules are designed and implemented can already be less-than-transparent; any attempt to hide records from public scrutiny cannot be allowed to stand.

Follow-Up Public Records Requests to Massachusetts and Maryland

CoA Institute also filed state-level FOIA requests with Massachusetts and Maryland this week in order to access some of the records that NOAA has refused to disclose.  These requests seek the same records sought from the federal government, but only to the extent they were created or received by John Quinn and Michael Luisi, the chairmen of the NEFMC and MAFMC, who used their state government email addresses to conduct council business.

Interestingly, sometime after CoA Institute submitted its comment, Dr. Quinn removed his University of Massachusetts email address from the NEFMC website, perhaps in order to dissuade the interested public from even attempting to file a state public records request.

CoA Institute is committed to fighting for the economic rights and liberties of everyday Americans, including those who face increasingly onerous regulation of their livelihoods.  We also will fight against agencies that flout federal records management laws in an attempt to keep their regulatory efforts secret.

Ryan Mulvey is Counsel at Cause of Action Institute

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02/27/2018

17 Groups Urge Trump Administration to End Unlawful IRS Practice of Dodging Oversight

Washington, D.C. – Cause of Action Institute (“CoA Institute”) today led a coalition of 17 organizations in sending a letter to President Trump and senior administration officials urging them to hold the IRS accountable by working to end the agency’s practice of dodging oversight of its rules.

CoA Institute recently issued an investigative report titled Evading Oversight: The Origins and Implications of the IRS Claim That Its Rules Do Not Have an Economic Impact, detailing how the IRS created and expanded a series of self-bestowed exemptions from three important regulatory oversight mechanisms.  The IRS created these exemptions by claiming that the economic effects of its rules flow from the underlying statute and not its regulatory choices.

The letter states:

This IRS practice denies Congress information about IRS major rules that should be reported to the Government Accountability Office under the Congressional Review Act.  It also hinders the White House’s ability to fulfill its constitutional obligation to supervise the Executive Branch by conducting oversight of IRS regulations pursuant to Executive Order 12,866.  And it impacts the public’s right to learn about and comment on the economic impact of the IRS rules that are subject to the Regulatory Flexibility Act… The IRS should live by the same rules of administrative law and agency oversight as the rest of the Executive Branch.

The letter was sent to President Trump, Secretary of the Treasury Steven Mnuchin, Office of Management and Budget (“OMB”) Director Mick Mulvaney, and Office of Information and Regulatory Affairs (“OIRA”) Administrator Neomi Rao.

The letter urges the Department of the Treasury and OMB to withdraw from a decades-old agreement allowing the IRS to avoid White House review of its rulemakings. Last week, two former heads of OIRA, Susan E. Dudley who served under President George W. Bush and Sally Katzen who served in the Clinton administration, wrote in The Wall Street Journal that this longstanding agreement has been abused and agreed it should be reconsidered.

Further, the coalition letter firmly holds that the IRS should not be permitted to claim that the economic impact of its rules is due to the underlying statute and not its regulatory choices.

The full letter can be found here.

The following groups signed:

American Business Defense Council
Dick Patten, President

American Commitment
Phil Kerpen, President

Americans for Prosperity
Brent Wm. Gardner, Chief Government Affairs Officer

Americans for Tax Reform
Grover Norquist, President

Association of Mature American Citizens
Dan Weber, President & CEO

Campaign for Liberty
Norm Singleton, President

The Carlstrom Group
Bob Carlstrom, President

Cause of Action Institute
John Vecchione, President & CEO

Center for Freedom and Prosperity
Andrew F. Quinlan, President

Council for Citizens Against Government Waste
Tom Schatz, President

Family Business Coalition
Palmer Schoening, Chairman

Freedom Partners Chamber of Commerce
Nathan Nascimento, Executive Vice President

FreedomWorks
Jason Pye, Vice President of Legislative Affairs

Hispanic Leadership Fund
Mario H. Lopez, President

National Taxpayers Union
Pete Sepp, President

Taxpayers Protection Alliance
David Williams, President

Tea Party Patriots
Jenny Beth Martin, President

 

For information regarding this press release, please contact Zachary Kurz, Director of Communications at CoA Institute: zachary.kurz@causeofaction.org.

 

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