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09/28/2016

Court Rightly Denies Rep. Van Hollen Request to Rehear Free Speech Case

Supporters of free speech and the First Amendment won a significant victory this week when a federal court denied a last ditch effort by Congressmen (and Senatorial candidate) Chris Van Hollen (D-Md.) to salvage his campaign finance case.

On January 21, 2016, a DC Circuit panel reversed the District Court for the District of Columbia and upheld a Federal Election Commission (“FEC”) regulation requiring unions and corporations (including nonprofit organizations) to disclose only those contributors who donate for the purpose of funding an election campaign.

Van Hollen had sued the FEC, arguing that such organizations should be required to reveal all donors, not just those that donate for an election. On appeal to the DC Circuit, CoA Institute filed an amicus brief in support of free speech principles. The DC Circuit agreed with the CoA Institute position that the FEC had struck an acceptable balance between disclosure requirements and First Amendment protections.  In so doing, the Court emphasized a number of points made in the CoA Institute brief, particularly the importance of protecting the constitutional rights of contributors to privacy and anonymous speech.

Following the DC Circuit decision, Van Hollen moved the entire DC Circuit to rehear the case (a rehearing en banc).  On September 27, 2016, the full court denied the petition.  Pending a Supreme Court appeal, the DC Circuit decision is now final.

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09/15/2016

TIGTA Reviews IRS FOIA Compliance

The Treasury Inspector General for Tax Administration (“TIGTA”)—the Internal Revenue Service (“IRS”) watchdog—released its annual audit report today on IRS compliance with the requirements of the Freedom of Information Act (“FOIA”). The results of the review suggest that IRS disclosure officials may have improperly withheld information from the public in 12% of FOIA cases. Additionally, the review reveals that while increased training has reduced the number of inadvertent disclosures of confidential tax information, these unauthorized disclosures have not been entirely eliminated. Overall, the IRS FOIA backlog continues to grow and the agency has room for improvement.

These findings should be unsurprising to everyone who follows FOIA issues. The IRS has a long history of evading its obligations under that statute. Cause of Action Institute remains committed to fighting for transparency and openness at the IRS. We continue to litigate access to records about potentially unauthorized requests for taxpayer information from the White House. We recently filed another lawsuit to challenge the refusal of the IRS even to recognize, let alone process, two FOIA requests for records of communications between IRS officials and White House advisors.

Ryan Mulvey is Counsel at Cause of Action Institute.

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09/7/2016

Growing Concern over Controversial Mortgage Settlements

Congress to Consider a Bill to Halt Government Slush Funds

 

On July 13, 2016, Cause of Action (CoA) Institute filed a complaint in the U.S District Court for the District of Columbia against the United States Housing and Urban Development (HUD). The lawsuit seeks records that HUD has failed to produce in response to a Freedom of Information Act (FOIA) request regarding HUD’s role in the federal government multi-million dollar settlements with three banks over their allegedly faulty mortgage practices.  As CoA Institute continues to investigate and litigate, others are paying attention to these troubling settlements as well.

Last week, prominent Washington Post columnist George Will penned a column calling out the government for using the bank settlements as a slush fund.  Will notes that the government:

allows banks to meet some of their settlement obligations by directing “donations” to various nongovernmental advocacy organizations that serve Democratic constituencies and objectives — organizations that were neither parties to the case nor victims of the banks’ behaviors. These donations are from money owed to the government, money that otherwise would go to the Treasury, money the disposition of which is properly Congress’s responsibility.

And in the Wall Street Journal, Andy Koenig, senior policy adviser at Freedom Partners Chamber of Commerce, similarly focuses on one of the key facets of these settlements: financial incentives for the banks to fund third party groups:

Most of the deals give double credit or more against the settlement amount for every dollar in “donations.” Bank of America’s donation list—the only bank to disclose exactly where it sends its money—shows how this benefits liberal groups. The bank has so far given at least $1.15 million to the National Urban League, which counts as if it were $2.6 million against the bank’s settlement. Similarly, $1.5 million to La Raza takes $3.5 million off the total amount of “consumer relief” owed by the bank. There are scores of other examples.

To address the growing chorus of concerns over these controversial settlements, the House of Representatives today will consider the “Stop Settlement Slush Funds Act of 2016,” a bill introduced by Rep. Bob Goodlatte (R-Va.)  to prevent any such future settlements. In other words, the bill would prohibit the government from creating a slush fund to direct settlement payments to favored (or any other) outside recipients.  The U.S. House of Representatives has scheduled a vote on this bill for September 7, 2016.

**UPDATE** The House passed the “Stop Settlement Slush Funds Act of 2016” on September 7 by a vote of 241-174.

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08/23/2016

No Accountability at the State Department

The U.S. Department of State has been embroiled in a string of humiliating public relations and accountability scandals.  From former Secretary Clinton’s emails to the Iran ransom payment, the agency has been unable to get past uncomfortable questions about the way it relates to the public.  But it’s the deleting of an embarrassing question-and-answer exchange from the State Department’s public video record of a daily press briefing that was back in the news recently.  This blunder is perhaps the easiest to remedy because all the behavior took place within the agency.  Now nearly three months after the story came to light, the agency is no closer to holding anyone accountable than when it started.

A brief recap.  The State Department initially claimed the Q&A exposing the State Department misleading the country about its negotiations with Iran disappeared from the briefing because of a “glitch.”  This was quickly debunked, yet State Department Spokesman John Kirby repeated the claim during his briefing last week, saying “a glitch is possible here is because of the choppy nature of the cut,” and because there is “no evidence that anybody did this with a deliberate intent to conceal.”

However, Fox News is reporting that a recently completed investigation by the State Department Office of Legal Adviser reveals that “the official who ordered the censorship of a 2013 press briefing — deleting an exchange between a department spokeswoman and a Fox News reporter — specifically mentioned that exchange when ordering the doctoring of the video.”  The Legal Adviser’s report stated “The technician did not recall a reason being given for the edit request, but did believe that the requester had mentioned in the course of the call a Fox network reporter and Iran.  The technician indicated that the requester may also have provided the start and end times for an edit.”  This calls into serious doubt Kirby’s claims that no one acted with intent to conceal information.

When the story first surfaced in June, Cause of Action Institute sent a letter to the Secretary of State and the State Department Inspector General notifying them of their duty to refer this matter to the Attorney General for a potential criminal investigation.  There is no evidence that they have done so.  The State Department’s botched investigation and continued obfuscation is exactly why these matters need to be referred to the Department of Justice.  There’s no accountability at the State Department.

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08/18/2016

Cause of Action Institute Calls on CFPB to Withdraw Arbitration Rule Based on Junk Science

This week, Cause of Action Institute (CoA Institute) filed a regulatory comment with the Consumer Financial Protection Bureau (CFPB), highlighting key problems with CFPB’s proposed Arbitration Rule.  This rule would outlaw mandatory arbitration clauses in certain financial services contracts, leading to more lawsuits and raising costs for consumers.

When an agency proposes a new rule, it is typically required to host a public “notice and comment” period before the rule can be implemented.  This gives the public an opportunity to submit their thoughts on the rule to the agency.  Anyone is eligible to submit a comment.

Agencies are then required to consider the public comments, respond to them if necessary, and implement appropriate changes to the rule itself.  As administrative rules are made outside of the legislative process – meaning the people who pass them are not elected – this is an essential way to gauge public opinion.  This is especially important here, as the Arbitration Rule will affect many Americans’ relationships with their banks, credit card companies, and other financial institutions.

In its regulatory comment, CoA Institute raises legitimate concerns that CFPB based its Arbitration Rule on findings from a study that used bad data and methodology.  All government rules, especially those with drastic effects on the economy, should be founded on sound science and solid reasoning.  Congress and the White House agree. In 2000 Congress passed a law called the Information Quality Act to ensure that agencies use the best methodology available.  The White House issued its own guidance that calls for agencies to have other experts and scientists review their work through a rigorous “peer-review process.”

CoA Institute President and CEO, and former federal judge, Alfred J. Lechner, Jr.: “The study CFPB used to justify its anti-arbitration rule failed to follow appropriate scientific standards, as outlined by both the White House and the Information Quality Act.  Had the agency followed the law and rigorously vetted its study, this ill-advised rule would not have made it this far. Banning arbitration will harm the economy and millions of Americans while enriching a lucky few at law firms. CFPB should halt consideration of this rule until a proper peer-reviewed study has been completed.”

Read Judge Lechner’s op-ed HERE

Read the full regulatory filing HERE

Eric Bolinder is Counsel at Cause of Action Institute.

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08/17/2016

There is No Tenth Exemption

The Freedom of Information Act (“FOIA”) provides access to records, not information.  This may seem like a minor distinction but in the FOIA world it can mean the difference between uncovering government wrongdoing and having your request rejected because it was poorly thought out.  The distinction also means that when agencies are conducting a search for responsive records they should not be able to withhold portions of information contained within responsive records, unless that information falls within one of the nine statutory exemptions.  There is no “tenth exemption” that allows agencies to withhold information within responsive records just because that information is non-responsive to the request.

An examination of the statute’s terms confirms this analysis.  The statutory section that empowers requesters to get documents from the government speaks in terms of “records”  not “information.”  FOIA requires “each agency, upon any request for records which (i) reasonably describes such records and (ii) is made in accordance with published rules . . . shall make the records promptly available to any person.”[1]  The agency must search, “manually or by automated means, agency records for the purpose of locating those records which are responsive to a request.”[2]

The statutory language that allows requesters to access “records” is limited by agencies’ ability to withhold portions of those records if one of the nine statutory exemptions applies.[3]  However, the agency may only redact exempt information and any “reasonably segregable portion of a record shall be provided to any person requesting such record after deletion of the portions which are exempt under this subsection.”[4]  FOIA “does not authorize withholding of information or limit the availability of records to the public, except as specifically stated in this section.”[5]

Taken together, these provisions mean that requesters can access agency records and agencies may only withhold portions of those records if they fall within one of the nine statutory exemptions.  They are not authorized to withhold any other information.

Agencies Attempt to Invoke a Tenth Exemption

It is common practice for agencies to only produce the portions of records that contain responsive information and assert that the remaining portions of the record in which that information is contained is “non-responsive.”  For example, Cause of Action Institute sent a FOIA request to the William J. Clinton Presidential Library seeking records related to efforts by Hillary Clinton store her records at the Library.  In response, the Library sent Cause of Action Institute a quarterly report that the Library filed with the National Archives and Records Administration.  However, the Library withheld almost the entire 18-page report and released only small portions it deemed responsive to the request.  As seen below, the Library used “non-responsive” as a “tenth exemption” to deny access to the full record:

Unfortunately, this practice is all too common.

Recent D.C. Circuit Decision Holds Agency Use of Tenth Exemption Improper

In July 2016, the D.C. Circuit decided American Immigration Lawyers Association v. Executive Office for Immigration Review and held there is “no statutory basis for redacting ostensibly non-responsive information from a record deemed responsive. . . .  [O]nce the government concludes that a particular record is responsive to a disclosure request, the sole basis on which it may withhold particular information within that record is if the information falls within one of the statutory exemptions[.]”[6]  This was an issue of first impression for the Circuit, which provides the leading judicial opinions on FOIA.  Many district courts have permitted this agency behavior.[7]

In this case, the Executive Office for Immigration Review argued that “it was under no obligation . . . to release information that concerned matters unrelated to [the] FOIA request because the information was outside the scope of the request.”[8]  The D.C. Circuit rejected this argument, reasoning that the “sole FOIA provision enabling the government to withhold responsive records is section 552(b), which sets forth the nine statutory exemptions.”[9]  “The statute does not provide for withholding responsive but non-exempt records or for redacting nonexempt information within responsive records.”[10]  “[O]nce an agency identifies a record it deems responsive to a FOIA request, the statute compels disclosure of the responsive record—i.e., as a unit—except insofar as the agency may redact information falling within a statutory exemption.”[11]

D.C. Circuit Sets up Next Fight over Definition of “Record”

In deciding American Immigration Lawyers Association, the D.C. Circuit realized that if the statute requires the disclosure of a record as a unit, the amount of disclosure is going to “depend[] on how one conceives of a ‘record.’”[12]  The court did not directly reach that question because it used the agency’s determination that the documents containing the non-responsive redactions were the relevant “records.”  However, in so ruling, the court afforded a troubling amount of deference to agencies.

The Court summarized that unlike the Privacy Act, the Presidential Records Act, and the Federal Records Act, FOIA provides no statutory definition for the term “records.”  The court then looked to the agencies to provide the definition, writing: “Under FOIA, agencies instead in effect define a ‘record’ when they undertake the process of identifying records that are responsive to a request.”[13]  It also afforded some authoritative deference to the Department of Justice Office of Information Policy guidance, which “sets forth a number of considerations for agencies to take into account when determining whether it is appropriate to divide [a responsive] document into discrete ‘records.’”[14]  The court found “the dispositive point is that, once an agency itself identifies a particular document or collection of material—such as a chain of emails—as a responsive ‘record,’ the only information the agency may redact from that record is that falling within one of the statutory exemptions.”[15]

There is no legal basis for a court to afford deference to an agency interpretation of a term in a statute that is not organic to that agency.  Arguably, it is inappropriate for a court to ever provide deference to agency interpretations.[16]  However, the D.C. Circuit has held that because FOIA is not administered by one agency but instead applies across the Executive Branch, “[o]ne agency’s interpretation of FOIA is . . . no more deserving of judicial respect than the interpretation of any other agency.”[17]  Further, because statute provides that judicial review in FOIA is under a de novo standard of review, courts should not be permitting agencies to decide what counts as a “record” when requiring them to release a record as a single unit.[18]

As courts, agencies, and requesters begin to internalize the implications of American Immigration Lawyers Association, the definition of a “record” is increasingly going to determine how much information is released to the public.  Courts should refrain from deferring to agency attempts, should they arise, to segment records into increasingly smaller sizes.

September 21, 2016 Update:  Our prediction that the D.C. Circuit decision in American Immigration Lawyers Association would set up a new fight with federal agencies over the definition of a “record” has come to pass.  CoA Institute sent a FOIA request to the Department of Justice – Tax Division (“DOJ-Tax”) seeking access to a record the agency had previously produced with a series of redactions marked as non-responsive.  Here is the first page of that record as originally produced.

nr81

Instead of removing the improper redactions of information and providing the record in full, as per the holding in American Immigration Lawyers Association, DOJ-Tax broke the larger record into a series of smaller records, even so far as to claim that an email header was a different record than the body of that same email.  The agency then withheld all but one of those “records” as non-responsive.

prod1

Compare the full original here and the full re-produced record here.

No justification was given as to why an email chain, previously provided as a single record, had now been broken up and categorized into distinct records, why an email header containing the sender, recipient, date, and subject of the email, was now considered a record separate from the body of that same email, or why these “multiple” records, all but one of which were redacted in full because they were deemed non-responsive, were provided in response to our FOIA request.

As suggested in the original blog post, the next fight over government transparency will be the increasingly smaller segmentation of records as agencies seek to circumvent the FOIA’s presumption of openness.  Requesters must be vigilant and courts should not defer to agency interpretations of the statutory term “record.”

November 8, 2016 Update:  Cause of Action Institute has filed suit against the Department of Justice on this issue.  The complaint is available here and the exhibits here.

February 8, 2017 Update:  Cause of Action Institute has filed its Cross-Motion for Summary Judgment in this case.  That filing is discussed in Defining a Record Under FOIA.

James Valvo is Counsel & Senior Policy Advisor at Cause of Action Institute. You can follow him on Twitter @JamesValvo.

 

[1] 5 U.S.C. § 552(a)(3)(A) (emphasis added).

[2] Id. § 552(a)(3)(D) (emphasis added).

[3] Id. § 552(b)(1)–(9).

[4] Id. § 552(b) (text following (b)(9)).

[5] Id. § 552(d).

[6] Am. Immigration Lawyers Ass’n v. Exec. Office for Immigration Review, No. 15-5201, 2016 WL 4056405, at *1 (D.C. Cir. July 29, 2016), slip op. available at http://coainst.org/2aZCRgT.

[7] See, e.g., Freedom Watch, Inc. v. Nat’l Sec. Agency, 49 F. Supp. 3d 1, 7 (D.D.C. 2014) (“The practice of redacting non-responsive materials from documents produced in response to FOIA requests has been approved by courts in this Circuit.”) (collecting cases).

[8] Am. Immigration Lawyers Ass’n, 2016 WL 4056405, at *7.

[9] Id.

[10] Id. at 8.

[11] Id.

[12] Id.

[13] Id. at 9.

[14] Id.

[15] Id.

[16] See Jack M. Beermann, End the Failed Chevron Experiment Now: How Chevron Has Failed and Why It and Should be Overruled, 42 Conn. L. Rev. 779 (2010).

[17] Tax Analysts v. IRS, 117 F.3d 607, 613 (D.C. Cir. 1997) (collecting cases).

[18] 5 U.S.C. § 552(a)(4)(B); Richard J. Pierce, What do the Studies of Judicial Review of Agency Actions Mean?, 63 Admin. L. Rev. 77, 83 (2011) (“[D]e novo review refers to an approach to judicial review in which the court does not confer any deference on the agency[.]”); Paul R. Verkuil, An Outcomes Analysis of Scope of Review Standards, 44 Wm. & Mary L. Rev. 679, 688 (2002) (“[U]nder de novo review, there should be no deference at all.”).

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08/11/2016

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.

 

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