close X
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

Media, Blog Learn More
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

Blog, Media Learn More
02/26/2018

CoA Institute Calls on HUD Watchdog to Pull Flawed FOIA Rule

Cause of Action Institute (“CoA Institute”) has sent a public letter to the Department of Housing and Urban Development (“HUD”) Office of Inspector General (“OIG”) to request that the agency watchdog recall and revise its recent direct final rule implementing changes to its Freedom of Information Act (“FOIA”) regulations.  Specifically, CoA Institute explained that the OIG’s flawed FOIA rule cross-references deficient fee provisions in HUD’s current department-wide regulations.

As an independent component of HUD, the OIG maintains its own rules regulating public access to its records.  In and of itself, this is not an unwelcome fact.  These component-specific FOIA regulations are important for maintaining the OIG’s independence and limiting the potential politicization of disclosure processes by HUD political staff.  Yet the OIG still relies on department-wide FOIA policy in certain important respects.  For example, the OIG cross-references many of HUD’s general regulatory provisions for charging fees to requesters.  The OIG’s new rule only slightly modified its existing cross-reference to reflect the changes introduced last year by HUD in response to the FOIA Improvement Act of 2016.

News Media Fee Category

Unfortunately, when revising its agency-wide regulations last year, HUD failed to eliminate the so-called “organized and operated” standard from its definition of a “representative of the news media.”  Such language has been used in the past to deny news media requester status to government watchdog organizations like CoA Institute.  Indeed, CoA Institute took 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 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.

Like the OIG earlier this week, HUD forwent a comment period and issued a direct final rule without any public feedback.  After CoA Institute nevertheless sent the agency a letter to explain the deficiency in HUD’s rulemaking, our comment went unanswered.  And, to date, HUD has not indicated any intention of again revising its own flawed FOIA rule to conform with statutory and judicial authorities.

CoA Institute has convinced a number of other agencies that solicited public comment 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 OIG will similarly acknowledge the need to revisit its flawed FOIA rule by eliminating the cross-reference to HUD’s improper fee provisions and adopting a proper definition of a news media requester.

Ryan Mulvey is Counsel at Cause of Action Institute

Media, Blog Learn More
02/22/2018

VA Travel Fraud Shows Even Reformers Can Misuse Government Power

There is little doubt that recent reforms at the Department of Veterans Affairs represent remarkable progress.  Last year saw the appointment of a new head for the agency, David Shulkin, and the passage of legislation giving him the power to start implementing badly-needed changes.  It was a lesson in how persistence can eventually lead to progress, and we recently highlighted it in the Washington Examiner as an overlooked bipartisan success.  Unfortunately, Shulkin is now reminding us of a different lesson: even those who champion reform may misuse government power once they have it.

A new inspector general report documents how Shulkin and his direct subordinates improperly turned a simple business trip in July of last year into a lengthy vacation.  Gifts were inappropriately accepted, government employees were used to plan private excursions, and an e-mail was even faked to justify flying Shulkin’s wife to Europe with him.

The saddest part is this occurred just after Shulkin visited the White House to celebrate the signing of legislation which allowed him to more easily fire VA employees for wrongdoing.  Yet instead of ending VA misconduct, Shulkin was on his way to becoming an example of it as he flew to England to attend a sold-out tennis match at Wimbledon with his wife at no cost to either of them.  She had officially been flown out to watch her husband receive “special recognition” at a dinner, a fiction created by Shulkin’s chief of staff to have $4,000 in airfare covered by taxpayers.  The Wimbledon tickets were from an acquaintance whose employer holds several government contracts.

In the days before the report was issued, Shulkin and his attorney had mounted an aggressive defense of his actions.  That tone changed significantly once the report became public, with Shulkin acknowledging how bad the behavior looked and White House officials saying off the record that Shulkin had been deceptive about the seriousness of the charges.  Yet his willingness to accept responsibility was only partial, as he blamed political appointees for targeting him and suggested that e-mails proving expense fraud by his chief of staff were the result of hacking.

The improbable hacking charge may never amount to much, as the chief of staff retired rather than face punishment.  And while e-mails have shown that Shulkin is indeed being pursued by political appointees in his agency, that does not excuse the fraudulent behavior of his staff.  If anything, the knowledge that rivals are looking to undermine you should be another reason to ensure your office behaves ethically.

The VA is not an easy place to lead, and Shulkin has been a consistent advocate for reform.  But that reform will only stick if he can make sure his own subordinates maintain the standards of behavior that he champions for the VA as a whole.  The agency has long suffered from low morale, as years of unaccountability and understaffing have led to dissatisfied veterans and endless frustration for competent employees.  It will be that much harder to change this environment if the top official is excusing ethical lapses instead of preventing them.

The latest reports indicate that Shulkin will remain in his position despite what happened.  He must now focus on using the powers given him by last year’s reform bill to ensure the VA is a place where this kind of behavior is no longer tolerated.

John McGlothlin is counsel at Cause of Action Institute

Blog, Media Learn More
02/22/2018

Investigation Update: OPM Provides Deficient FOIA Response on Congressional Oversight Policy

For the past year, Cause of Action Institute (“CoA Institute”) has been investigating rumors that the Trump Administration is directing federal agencies to ignore congressional oversight requests from Democratic legislators.  Various reports (here and here), which detail contentious interactions between congressional staffs and employees at the General Services Administration (“GSA”) and the Office of Personnel Management (“OPM”), allege that the directive “not to cooperate” with individual Members’ records requests was originally delivered by Uttam Dhillon, Special Assistant to the President.  The earlier issuance of an opinion letter by the Department of Justice’s Office of Legal Counsel seemed to corroborate these press reports.

As I discussed in a September 2017 op-ed in The Hill, the Administration’s actual congressional oversight policy remains ambiguous.  On July 20, 2017, the White House disavowed the OLC opinion letter as a statement of government-wide policy following severe criticism by Senator Chuck Grassley.  Yet records received by CoA Institute under the FOIA suggest that either the OLC opinion is still in force or the White House has yet to uniformly apply its actual policy.  For example, following our successful appeal of a GSA FOIA response, the agency disclosed GSA Order ADM 1040.3, dated July 24, 2017, which expressly states that the OLC opinion remains the agency’s—and, presumably, the Administration’s—official policy.  Our request for public clarification has gone unanswered.

Now, a recent FOIA response from OPM only confuses the matter further.  As part of our investigation, CoA Institute sent a FOIA request to OPM seeking access to various records concerning the agency’s policies or procedures for handling congressional oversight and records requests.  We also requested copies of records evidencing White House directives on pre-production consultation or review of requests from Congress or under the FOIA.  OPM was only able to locate a single email linking to the OLC memo, but without any further details concerning its implementation at the agency, let alone its continued relevance.

Like the GSA’s initial failure to locate responsive records, OPM’s response is curious because multiple media reports have established that Jason Simmons, OPM’s then-Chief of Staff, directed the agency’s congressional liaisons to process only those oversight requests co-signed by Republican committee chairmen.  Yet no such directive was located and disclosed.  Moreover, with respect to the records that were released, OPM withheld the names and email addresses of its employees.  It is therefore unclear who at the agency was reviewing the OLC opinion letter or for what purposes.  We have filed an appeal challenging the adequacy of OPM’s search efforts, as well as its withholdings under FOIA Exemption 6.  If the agency were to undertake a supplemental search, some much needed clarification could be forthcoming.

Ryan Mulvey is Counsel at Cause of Action Institute

Media, Blog Learn More
02/20/2018

Treasury and OMB are Reconsidering IRS Oversight Exemption

I’ve been writing about the series of self-created exemptions the Internal Revenue Service (“IRS”) has been using to evade oversight of its rulemakings.  One of those exemptions is tied to White House review pursuant to Executive Order 12,866 at the Office of Information and Regulatory Affairs.  Today, for the first time, the agency publicly revealed that it is in talks with the Office of Management and Budget (“OMB”) to review that exemption.

The Trump Administration’s Departments of Health and Human Services (“HHS”), Labor, and the Treasury just released a proposed rule that would allow Americans to buy short-term health insurance plans that would not be affected by the Patient Protection and Affordable Care Act’s mandates that are driving up premiums and limiting choice.  Housed within that proposed rule is a microcosm of the problem I’ve been highlighting.

On pages 17–28, HHS and Labor conduct a series of regulatory assessments, including an explanation of what the costs, benefits, advantages, and disadvantages of the proposed rule are.  They even include an analysis of the number of enrollees likely to take advantage of the proposal and the impact on the individual market exchanges.  IRS?  Not so much.  As has been its practice, the IRS simply claims that “[c]ertain IRS regulations, including this one, are exempt from the requirements of Executive Order 12866 . . .  Therefore, a regulatory impact assessment is not required.”

However, the IRS also reveals that CoA Institute’s efforts to urge the Trump Administration to review the exemption is starting to bear fruit.  The IRS states that “[p]ursuant to Executive Order 13789, the Treasury Department and OMB are currently reviewing the scope and implementation of the existing exemption.”

IRS Section from Proposed Rule on Short-Term Insurance

Here’s hoping they go further than simply review the scope and implementation, and resolve to end the practice that allows the IRS to give short shrift to the impacts of its rules, while other agencies, like HHS and Labor here, do their homework.

James Valvo is Counsel and Senior Policy Advisor at Cause of Action Institute.  He is the principal author of Evading Oversight.  You can follow him on Twitter @JamesValvo.

Media, Blog Learn More
02/14/2018

Congress Investigates IRS for Trying to Evade Oversight

Over the past two weeks, Senate Committee on Homeland Security and Governmental Affairs (“HSGAC”) Chairman Ron Johnson and HSGAC Subcommittee on Regulatory Affairs Chairman James Lankford have sent two letters to investigate the Internal Revenue Service (“IRS”) claim that any economic impact from the agency’s rules is due to the underlying statute and not its regulatory choices.  Cause of Action Institute (“CoA Institute”) profiled the IRS claim, its implications, and the role of the White House Office of Information and Regulatory Affairs (“OIRA”) in a recent investigative report and op-ed.

HSGAC Letter to OIRA

On February 1, 2018, Chairmen Johnson and Lankford sent a letter to OIRA urging the White House regulatory office to reconsider a “longstanding agreement between [OIRA] and the Department of the Treasury to exempt regulations issued by the [IRS] from the requirements contained in Executive Order 12866.”

In 1983, OIRA, under President Reagan, agreed to create a three-tiered system to review IRS rules, which has resulted in very few IRS rules being sent to the White House regulatory office for pre-publication review.[1]  The IRS finally released the long-secret agreement in response to a Freedom of Information Act request from CoA Institute.  The Government Accountability Office (“GAO”) has also called for the agreement to be revisited.

In their letter, Chairmen Johnson and Lankford:

strongly urge[d] [OIRA] to revisit the regulatory agreement between OIRA and Treasury, as directed by President Trump’s EO 13789, with a critical eye as to why this agreement is necessary.  [They] also encourage[d] OIRA to implement all the recommendations in GAO’s September 2016 report and provide a full explanation to the Committee and Subcommittee in the event that OIRA declines to implement any of GAO’s recommendations.

The Chairmen also announced that they “intend[] to hold an oversight hearing in the very near future regarding OIRA activities.  The issues outlined in this letter will likely constitute a major part of this hearing.”

This effort is important because OIRA plays a key role in coordinating and legitimizing Executive Branch regulatory actions.  If an agency is able to make federal regulatory policy without oversight from the President, that policy not only lacks independent review but also political legitimacy.  OIRA is well-positioned to rein in the IRS and demand that the agency begin to do the same pre-publication regulatory cost-benefit analysis and economic-impact analysis as other federal agencies.

It will be interesting to hear OIRA Administrator Neomi Rao’s thoughts on the long-standing, long-secret memo at a congressional oversight hearing, as I do not believe OIRA as an institution has spoken on the issue since 1993.  Hopefully, Administrator Rao will take this opportunity to review and end the agreement between OIRA and Treasury and bring the IRS into line with other agencies.

HSGAC Letter to IRS

In addition, on February 13, 2018, Chairmen Johnson and Lankford sent a letter to Acting IRS Commissioner David Kautter presenting many of the findings from CoA Institute’s report.[2]  In their letter, the Chairmen summarized the report’s central finding:

[CoA Institute’s] report found that the IRS “takes the position that its rules have no economic effect because any impact is attributable to the underlying law that authorized the rule, not the agency’s decision to issue or alter the rule.”  The IRS’s position apparently dates back nearly 20 years, when the IRS Office of Chief Counsel issued a notice taking this position.  The report notes that while the IRS initially limited its economic analysis exemption to only “interpretative regulations and revenue impacts, both limitations fell away over time.”

The Chairmen asked the IRS a number of oversight questions, to learn more about the agency’s behavior and any justification it may have.  First, they asked whether “the IRS has conducted any retrospective economic impact analyses of regulations that did not receive an initial economic impact analysis.”  I am dubious that the IRS has done so.  If it believes its rules are exempt from initial economic impact analysis, I doubt its going back to see if it was right or wrong.  Any retroactive analysis likely would just shift blame back to the underlying statute again.

Second, the Chairmen noted that in 2016 “the Small Business Administration’s [(“SBA”)] Office of Advocacy wrote to the IRS disputing the agency’s assertion that the IRS’s regulations are not subject to the requirement to conduct economic impact analyses.”  The Chairmen want to know if the IRS ever responded to SBA or if any other agencies have pushed back on the IRS claim.

Finally, and perhaps most importantly, the Chairmen asked the IRS to “explain the process by which a determination is made as to whether the agency will or will not conduct an economic impact analysis on a proposed regulation.”  This final question is critical because, up to now, the IRS has provided very little explanation of how it goes about making the determination in an individualized case that a certain rule’s impact flows from the statute.  CoA Institute’s work in this area shows that the agency developed these self-bestowed exemptions over time, found them a convenient tool to avoid additional pre-publication work, and rarely gives more than a boilerplate claim that the exemption applies to certain cases.

It is heartening to see that Chairmen Johnson and Lankford are beginning the oversight process on this issue.  I look forward to seeing the responses from OIRA and the IRS.

James Valvo is Counsel and Senior Policy Advisor at Cause of Action Institute.  He is the principal author of Evading Oversight.  You can follow him on Twitter @JamesValvo.

[1] In 2016, CoA Institute found that “over the past ten years, the IRS has submitted only eight rules to OIRA for regulatory review and deemed only one of those rules significant.  Those eight rules are less than one percent of the final rules the IRS published in the Federal Register over the same period.”

[2] President Trump recently nominated Chuck Rettig to be the new IRS Commissioner, and CoA Institute has urged the Senate Finance Committee to press Mr. Rettig on whether he will end this IRS practice of evading oversight of its regulatory actions.

Blog, Media Learn More