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08/10/2016

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.


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08/9/2016

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

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07/27/2016

Cause of Action Institute Seeks Supreme Court Review in Chicago Transit Authority False Claims Act Suit

Today, Cause of Action Institute filed a petition for writ of certiorari with the United States Supreme Court, the first in the organization’s history, asking the high court to reverse a Seventh Circuit ruling that barred CoA Institute from suing the Chicago Transit Authority (CTA) under the False Claims Act.

In March 2012, CoA Institute provided the U.S. Department of Justice with evidence that CTA for years had intentionally over-billed the Federal Transportation Authority, defrauding taxpayers out of tens of millions of dollars. The Department of Justice declined to intervene in the case.  The U.S. District Court for the Northern District of Illinois granted CTA’s motion to dismiss, which the Seventh Circuit incorrectly upheld.

The cert petition identifies several areas of judicial confusion over the proper application of the public disclosure bar, which prevents qui tam plaintiffs from assisting the federal government in recovering money defendants fraudulently obtained from the government.

Qui tam plaintiffs play an important role in policing federal programs.  In the last fiscal year, eighty percent of the funds recovered for the government in False Claims Act cases derived from lawsuits filed under the qui tam provisions.  The Seven Circuit’s decision to bar CoA Institute from pursuing a case against CTA will chill other qui tam plaintiffs and hurt the federal government’s ability to root out fraudsters.

Read the petition for writ of certiorari here.

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06/9/2016

Sec. Kerry bows to pressure, orders further investigation into video edit after Cause of Action Institute floats criminal referral

In Case You Missed It…

 

As reported by Washington Examiner:

Secretary of State John Kerry has ordered the State Department to re-examine how a video of a 2013 press briefing came to be edited to remove a sensitive discussion about the Iran nuclear agreement. Last week, spokesmen for the department said it hit a “dead end” in its investigation, which failed to determine who ordered the video to be edited. But on Wednesday, spokesman Mark Toner said Kerry insisted that officials try again.

“Given the secretary’s strong interest, given Congress’ strong interest and given the media’s strong interest, we’ve decided to continue to look at that,” he said. Kerry had called the entire episode “stupid” and “clumsy.” “Basically because the secretary said he wants to dive deeper into this, [State will] look more into what happened, and try to get to the bottom of what happened,” he said.

…Toner did indicate that it may not be too hard to figure out the mystery eventually. He said just a handful of people could have been involved in the scheme. “I don’t want to call them … suspects, but they might have been aware of what was happening or what happened, and it’s probably about four or five people,” he said.

 Last week:

Cause of Action Institute (CoA Institute) sent a letter to Secretary of State John Kerry and State Department Inspector General (IG) Steve Linick following confirmation that a yet-to-be named staffer deleted approximately eight minutes from the video record of the Department’s December 2, 2013 press briefing.

“Although the video has now been restored, this deletion raises numerous questions about the State Department commitment to transparency and honest dealing with the American public,” the letter states. “It also has possible criminal implications. It is a federal crime to unlawfully remove, destroy, or mutilate a federal record. The State Department has also revealed that this unnamed staffer did not act alone but that she received a phone call and was told to alter the record.”

To date, there is no evidence that federal authorities have begun any criminal investigation of State Department staff conduct under 18 U.S.C. § 2071 regarding this matter. Moreover, the State Department has stated it would no longer investigate this matter, even with considerable gaps in the information still outstanding.

The letter states: “As the head of the State Department and its Office of Inspector General, respectively, you each have an obligation to refer matters to the Attorney General whenever there is a reason to believe that a violation of federal criminal law has occurred.”

Cause of Action Institute is seeking more information to understand whether this incident could include criminal charges for aiding and abetting or conspiracy under 18 U.S.C. § 371.

The letter requests that Sec. Kerry and the IG immediately refer and report the relevant staff to the Attorney General for possible criminal violations of this statute arising from their alteration of the video record of the Department’s December 2, 2013 press briefing.

The full letter can be found HERE.

 

 

 

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06/6/2016

Cause of Action Institute Seeks Criminal Investigation Referral for State Department Censorship of Press Briefing Video

Washington, DC – Cause of Action Institute (CoA Institute) today sent a letter to Secretary of State John Kerry and State Department Inspector General (IG) Steve Linick following confirmation that a yet-to-be named staffer deleted approximately eight minutes from the video record of the Department’s December 2, 2013 press briefing.

“Although the video has now been restored, this deletion raises numerous questions about the State Department commitment to transparency and honest dealing with the American public,” the letter states. “It also has possible criminal implications. It is a federal crime to unlawfully remove, destroy, or mutilate a federal record. The State Department has also revealed that this unnamed staffer did not act alone but that she received a phone call and was told to alter the record.”

To date, there is no evidence that federal authorities have begun any criminal investigation of State Department staff conduct under 18 U.S.C. § 2071 regarding this matter. Moreover, the State Department has stated it would no longer investigate this matter, even with considerable gaps in the information still outstanding.

The letter states: “As the head of the State Department and its Office of Inspector General, respectively, you each have an obligation to refer matters to the Attorney General whenever there is a reason to believe that a violation of federal criminal law has occurred.”

Cause of Action Institute is seeking more information to understand whether this incident could include criminal charges for aiding and abetting or conspiracy under 18 U.S.C. § 371.

The letter requests that Sec. Kerry and the IG immediately refer and report the relevant staff to the Attorney General for possible criminal violations of this statute arising from their alteration of the video record of the Department’s December 2, 2013 press briefing.

The full letter can be found HERE.

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06/2/2016

#TBT – Prescient CoA Institute Report Anticipated Clinton Email Scandal

In July 2012, CoA Institute published “Gmail.gov: When Politics Gets Personal, Does the Public Have a Right to Know?” in the Federalist Society legal journal Engage.[1]  More than two years before Secretary Clinton’s decision to use a personal email address and private server to conduct official government business first came to light, CoA Institute warned:

“The practical reality is that … federal agency employees have and will continue to conduct agency business using personal e-mail accounts and personal communications devices.  Until Congress or the courts definitively clarify whether these work-related communications are subject to FOIA’s disclosure provisions, a dangerous loophole enabling unscrupulous agency employees to intentionally evade the light of public scrutiny may exist.”

CoA Institute noted the practical and technical problems associated with obtaining “agency-business-related communications that are never captured on government computers or servers,” which are nonetheless agency records subject to the Freedom of Information Act (FOIA)—a federal transparency statute.  But as CoA Institute said in 2012, “federal executive branch agency personnel should not be able to use personal communications devices, such as home computers and personal e-mail accounts, to intentionally circumvent the FOIA’s disclosure provisions and evade public scrutiny of their professional conduct.”

A May 2016 State Department Inspector General report examining Secretary Clinton’s use of a private email account and server to conduct government business has now confirmed CoA Institute’s suspicions, illustrating the need for action. The IG Report reveals email correspondence suggesting that the private Clinton server and Clintonemail.com were used, at least in part, to intentionally shield Clinton’s work-related communications from public disclosure under FOIA:

“In August 2011, … [t]he then-Executive Secretary informed staff of his intent to provide two devices for the Secretary to use: ‘one with an operating State Department email account (which would mask her identity, but which would also be subject to FOIA requests)….’ In another email exchange, the Director of S/ES-IRM noted that an email account and address had already been set up for the Secretary and also stated that ‘you should be aware that any email would go through the Department’s infrastructure and subject to FOIA searches.’ However, the Secretary’s Deputy Chief of Staff rejected the proposal to use two devices, stating that it ‘doesn’t make a whole lot of sense.’ OIG found no evidence that the Secretary obtained a Department address or device after this discussion.”

The IG report indicates that Clinton’s email practices were driven, at least in part, by a sophisticated understanding of FOIA and a deliberate effort to frustrate the public’s right to know what the government is up to, as CoA Institute warned in 2012.

[1] Cause of Action Institute, Gmail.gov: When Politics Gets Personal, Does the PublicHave a Right to Know?, Engage, Vol. 13, Issue 2 (July 2012), available at http://www.fed-soc.org/publications/detail/gmailgov-when-politics-gets-personal-does-the-public-have-a-right-to-know (last visited June 1, 2016).

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06/2/2016

Cause of Action Institute Petitions OMB to Update FOIA Fee Guide

Today, Cause of Action Institute filed a petition for rulemaking with the White House Office of Management and Budget (“OMB”), urging it to update its obsolete guidance document that federal agencies rely on when making FOIA fee determinations.  The petition seeks to implement Cause of Action Institute’s landmark legal win in Cause of Action v. Federal Trade Commission where the D.C. Circuit ruled OMB’s guidance conflicts with the FOIA statute.

Background

In 1986, Congress passed, and President Reagan signed into law, the Freedom of Information Reform Act of 1986.  Section 1803 of the Act directed OMB to provide a uniform schedule of fees for all federal agencies and guidelines for how to apply that schedule.  On March 28, 1987, OMB finalized those guidelines.  Although Congress has amended the FOIA several times since 1986, OMB has never updated the guidance.

The failure by OMB to update its guidelines has resulted in costly, time-consuming litigation between agencies and requestors.  For example, in 2011 and 2012, CoA Institute sent a series of FOIA requests to the Federal Trade Commission (“FTC”) requesting access to records, to be classified as a representative of the news media, and for a public interest fee waiver.  The FTC refused the CoA Institute requests for fee classification and waiver by relying on its outdated FOIA fee regulations, which in turn relied on the outdated OMB guidance.  After the district court refused to apply the statutory standard, CoA Institute appealed the case to the D.C. Circuit, which ruled that many of the regulatory and judicial standards that had built up over time were in conflict with the statute as amended by the Open Government Act of 2007.

Petition

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