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07/9/2013

Secret Pentagon policy may delay responses to Freedom of Information Act requests

Department of Defense FOIA offices are prohibited from responding to “significant” FOIA requests having “departmental level interest” without approval from the Pentagon, according to a policy document obtained by Cause of Action from the DoD’s Inspector General.   

 A “significant” request is defined by the policy document as one where, in the judgment of a FOIA office, “the subject matter of the released documents may generate media interest and/or may be of interest or potential interest to DoD senior leadership.”  This can include requests regarding “the current administration (including request for information on Senator Obama) previous administrations, and current or previous DoD leadership.”

The policy document further provides that if a “significant” request generates “departmental level interest,” the DoD FOIA office handling the request must forward its proposed FOIA response and all responsive records for departmental level clearance.  Departmental level clearance is done at the DoD Freedom of Information Policy Office (DFOIPO) which is responsible for the formulation and implementation of FOIA policy guidance for DoD.  The office was created in 2006 after President Bush signed an Executive Order aimed at improving the FOIA process, though the policy document in question was drafted only after President Obama took office.         

The Pentagon’s FOIA review policy was initially revealed by the IG to Congress in 2010 in response to an inquiry concerning the politicization of FOIA.  The IG did not comment on this policy or on DoD’s FOIA practices; it merely forwarded documents to Congress.  Notably, neither the IG nor the Pentagon has proactively disclosed any of this information to the public.

This secrecy is especially troubling with respect to DFOIPO in light of its mission. Not only is this policy document omitted from a long list of “FOIA Policy Guidance” on DFOIPO’s Web site, but none of DFOIPO’s other publicly available FOIA material even mention this Department-wide policy.  Those documents include DoD’s “Freedom of Information Act Handbook,” its annual FOIA reports to the Department of Justice, as well as a bi-annual newsletter “DoD FOIA News.”  This is hardly the stuff of which transparent administrations are made, let alone one that claims to be the most transparent in history.

DoDFOIA1

 

DoDFOIA2

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06/24/2013

White House and Treasury Department Politicize FOIA

In 2010, the Associated Press (AP) uncovered that the Department of Homeland Security (DHS) was blatantly politicizing the Freedom of Information Act (FOIA) process by having senior political appointees review requests.  Additionally, it was revealed that documents implicating “White House equities” had been sent by DHS to the White House Counsel’s Office for review, but what are White House equities? And who is defining the term?

In subsequent testimony before the House Committee on Oversight and Government Reform, Mary Ellen Callahan, Chief Privacy Officer for DHS, was asked about the meaning of White House equities by Rep. Jason Chaffetz:

Mr. Chaffetz. Let me read another paragraph. “Two exceptions required White House review, request to see  documents about spending under the $862 billion stimulus law, and the calendars for cabinet members, those required White House review,” is that correct?

Ms. Callahan. The calendars–anything that has White House equities would require White House review. That is—-

Mr. Chaffetz. What is a White House equity? What does that mean?

Ms. Callahan. In the circumstances with the Secretary’s calendar to the extent that she was in the White House, or that was a–disclosing some sort of element. This is a typical process of referring FOIA requests to different departments. It may be their underlying records. That is a standard process throughout the—-

Mr. Chaffetz. The other part of that is under the $862 billion stimulus; is that correct? Is that part of the White House equity? It says “Two exceptions required White House review. Request to see documents about spending under the $862 billion stimulus law,” is that correct?

Ms. Callahan. That is correct.

Mr. Chaffetz. Why? Why does that require a special White House review?

Ms. Callahan. Sir, I’m the chief FOIA officer; I’m not a policy person in this area.

Mr. Chaffetz. So is that a directive that you got from the White House?

Ms. Callahan. I believe I was instructed by the Office of the Secretary to do that, and we processed it—-

Three years after the above testimony, we have confirmed that Congressman Chaffetz was right about the source of authority that required “special White House review.” In January 2009, the President issued his Executive Order on FOIA and transparency, and then Attorney General Eric Holder issued a March 2009 FOIA memo encouraging disclosure. Both of these memos were made public and lauded as standards for federal agencies. But in April 2009, a previously undisclosed memo was sent from White House Counsel’s Office to Department and Agency General Counsels, reminding them to send to the White House all records involving “White House equities” collected in response to any document request.  According to FOIA attorneys at multiple federal agencies, this White House consultation policy is still in effect.

The practice of sending agency records to the White House for review is not altogether new. In 1993, for example, the Department of Justice (DOJ) instructed agencies to send “White-House-originated” records to the White House Counsel’s Office whenever located in response to FOIA requests. However, the current White House consultation policy is substantially broader in scope.   First, this memo expands the types of documents being sent to the White House to include Congressional committee requests, GAO requests, and judicial subpoenas. Additionally, the documents to be referred need not “originate” from the White House, as the DOJ advised in 1993, but need only involve “White House equities,” an undefined term that could be construed to include any records in which the White House might be interested.   Indeed, that is exactly the type of referral that appeared to have occurred at DHS, and which is likely still occurring throughout the Executive Branch. In sum, the White House Counsel’s office is potentially receiving and reviewing, and actually demanding access to information they previously would not have been able to review under FOIA. Cause of Action is now seeking to obtain documentary evidence of this practice via FOIA requests to multiple agencies.

 

The 2009 memo that Cause of Action obtained:

White House Equities

How the Treasury Department and the IRS Stall FOIA Requests

  • Treasury’s Departmental Offices (DO) and the IRS gives extra scrutiny to FOIA requests from all media requesters, delaying the release of records and usurping the regulatory authority of FOIA officials
  • 13 requests to DO were marked for sensitive review were sent to the White House for review in 2009

In the wake of the DHS FOIA scandal, Senator Grassley and Congressman Issa sent a joint August 25, 2010 letter to 29 Inspectors General, asking them to investigate: (a) whether FOIA requests were given more scrutiny based upon the identity of the requester, and (b) the extent to which political appointees were systematically made aware of the requests and participate in FOIA decision-making. Our research found that only 7 of the 29 Inspectors General released their findings publicly, and none of those reports revealed any wrongdoing.

However, according to the Treasury Inspector General, both the Treasury’s main office, called Treasury’s Departmental Offices, as well as the IRS established formalized “sensitive review” processes in late 2009 that singled out media requesters and slowed down the FOIA process. At Treasury DO, a committee of senior Treasury officials reviewed requests deemed to be “sensitive” before career FOIA personnel were permitted to release any records. Notably, multiple government sources have confirmed that all FOIA requests submitted by the media were required to be forwarded to the review committee regardless of the content of the requested records. This discriminatory policy, which delayed the release of records and usurped the regulatory authority of FOIA officials, is all the more nefarious because it was established at a time when Americans were seeking to obtain vital information about Treasury’s response to a severe financial crisis.

At the IRS, any FOIA request submitted by “major media” would be labeled as a “sensitive case,” and sent to the Chief Disclosure Officer and the Director of Communications, Liaison, and Disclosure, who would decide if documents were “appropriately disclosed.”

Interestingly, in response to a FOIA request that Cause of action sent to the IRS, the IRS admitted internally that it had forgotten to put us in a “Sensitive Case Report.”

IRS Sensitive Review

According to the IG report, none of the other offices within Treasury had established a “sensitive review” process or were cited as sending requests to the White House for review.

Broken Promises on Transparency Continue

The Obama Administration cannot credibly claim to be the most transparent in history when it publicly issues memos about the presumption of openness in the FOIA process, for example, but then instructs agencies in a non-public memo to refer all records with “White House equities” to the White House for review. The White House is by its nature political and it is not subject to FOIA. Thus, it should not be interfering with the FOIA process. Not only is the FOIA process significantly stalled by this White House review  — a fact that agencies zealously keep secret from requesters — but it permits the White House’s political interests to trump the correct application of the FOIA, a disclosure statute whose purpose is ensure an informed citizenry. In sum, this Administration is more concerned with appearing to be transparent than with actually being transparent.

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06/18/2013

CFPB advises employees to FOIA-proof their work calendars

Updated: May 22, 2014 with the full CFPB FOIA Brochure

“Transparency is at the core of our agenda, and it is a key part of how we operate.   You deserve to know what the new bureau is doing for the American public and how we are doing it.” 

 –CFPB Website

“Keep your calendar entries brief and general. If possible, avoid annotating entries with agendas, detail discussions, etc.

Minimize attachments to your calendar appointments. Consider using email to send related attachments.”

–CFPB FOIA Team to CFPB employees

 

CFPB employees have been advised by its FOIA staff to keep their work calendars “brief and general” and to remove meetings to which they “were invited but did not attend,” according to a list of calendar tips obtained by Cause of Action.

These “Recommended Calendar DOs and DON’Ts” further suggest that employees “avoid annotating entries with agendas, detailed discussions,” and “minimize attachments to your calendar appointments.”  Consistent with such advice, the leadership calendars posted (and touted) by CFPB are noticeably devoid of details.

These calendar tips undoubtedly make it easier for the bureau’s FOIA staff to process any requested calendars.  However, they also undermine the Administration’s asserted commitment to creating “an unprecedented level of openness in Government.”  Additionally, this behind-the-scenes advice indicates that transparency at CFPB is not actually a “key mission,” as claimed.  Rather than full disclosure, the name of the game at CFPB obviously is partial disclosure lite.

Related: FOIA requests have found that the IRS and the DOJ are more concerned with their public image than they are with completing FOIA requests in accordance with the law.

CFPB FOIA Calendar Brochure by CauseOfAction

CFPB FOIA Insiders Guide 2013 by CauseOfAction

CFPB FOIA Email Focus 2013 by CauseOfAction

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06/12/2013

Roll Call: Dan Epstein: Congress Is Not the Answer: How We Really Should Be Investigating the IRS

Congress Is Not the Answer: How We Really Should Be Investigating the IRS | Commentary

By Dan Epstein     June 11, 2013, 5 a.m.

Three congressional committees were authorized to (and seemingly did) begin investigations in 2010 of the IRS’ political targeting, yet none of them were able to reveal what the Treasury Inspector General for Tax Administration reported last month.

Even though TIGTA head J. Russell George has now appeared before multiple committees, no one has questioned why TIGTA chose to examine the IRS’ politicization through an audit instead of an investigation. The Inspector General Act authorizes TIGTA to obtain the production of documentary evidence by subpoenas, yet TIGTA issued none. Item 2 of Treasury Order 115-01 authorizes TIGTA to conduct investigations, issue subpoenas, bring criminal enforcement actions and make referrals to the attorney general for prosecution. Yet none of this happened.

The much-publicized House Oversight and Government Reform Committee hearing on the subject revealed that former IRS Exempt Organizations Director Lois Lerner may have improperly received immunity by taking the Fifth only after pleading her innocence in an opening statement. The White House has claimed executive privilege, refusing to provide information to congressional oversight committees — and without independent prosecutorial authority, Congress can do little other than issue contempt charges, which this administration views as little more than a slap on the wrist. When Attorney General Eric H. Holder Jr. denied Congress information concerning the “Fast and Furious” scandal, Congress issued a subpoena, held him in contempt, then filed a civil lawsuit, which, as of March, is in mediation; most recently, the DOJ has filed motions to dismiss the case entirely.

Chairmen of both the House Ways and Means Committee and the Senate Finance Committee have authority under the tax code to investigate the IRS issues. Under federal law, the Ways and Means Republicans in the House must keep their investigation secret from Finance Republicans in the Senate just like the Senate Finance Democrats must not share protected information with Ways and Means Democrats. That means that not only is there a self-imposed limit to what Congress can do, there is the added dimension of partisanship: both Sen. Max Baucus, D-Mont., and Rep. Dave Camp, R-Mich., are forced to keep Sen. Orrin G. Hatch, R-Utah, in the dark.

If partisanship were not an issue, Congress should have established a committee that under 6103(f)(3) could be empowered with virtually unlimited investigative authority. But that hasn’t happened. Additionally, Congress always has the ability to appoint its own special counsel to investigate the IRS, as well as hire an outside counsel to advise it in its investigations. That hasn’t happened either.

Congress, in 1999, took away DOJ’s power to demand the D.C. Circuit appoint an independent counsel with prosecutorial power equal to the attorney general when high-ranking officials in the federal government engaged in criminal wrongdoing. However, the attorney general (or acting attorney general, in cases in which the attorney general is recused) is still authorized to appoint a special counsel when a criminal investigation of a person or matter is warranted so long as two conditions are met: an investigation or prosecution by a U.S. Attorney’s Office or litigating division of the DOJ would present a conflict of interest, and the public interest requires appointment of counsel independent from the DOJ. We therefore can infer that Holder’s decision to not appoint a special counsel, and instead ask the FBI to investigate the IRS, suggests that Holder believes no “conflict of interest” exists and it’s not in “the public interest” to have any outside scrutiny of the IRS.

Having exhausted the legislative and executive branch options, only the courts are left. Rule 53 of the Federal Rules of Civil Procedure would allow the federal courts, especially those hearing any of the current challenges to the IRS by tea party groups, to appoint what is called a “special master” to perform investigative and enforcement duties consented to by the parties in the dispute. This also includes authority to conduct an evidentiary hearing and exercise the appointing court’s power to compel, take and record evidence. With a gridlocked Congress and a White House pleading ignorance, the judiciary may be the only government institution capable of providing the thorough and accurate government accountability the American people deserve.

Dan Epstein is the executive director for Cause of Action.

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06/4/2013

How HHS Secretary Sebelius Broke Federal Law and Avoided Punishment

We’ve written before about Secretary of Health and Human Services Kathleen Sebelius violating the Hatch Act.  By campaigning for Walter Dalton’s election as Governor of North Carolina and Barack Obama’s reelection as President at a Human Rights Campaign Gala, Sebelius used taxpayer funding for her own partisan priorities.  The precedent for presidentially-appointed and Senate-confirmed federal employees violating the Hatch Act is resignation.  Sebelius is the highest-level federal employee to break this law, but President Obama, the sole administration official with the authority to see that the penalty for this violation was paid, not only declined to ask Sebelius to resign, but opted to keep the Secretary on for his second term.  White House spokesman Eric Schultz contended that this administration holds itself “to the highest ethical standards[,]” but the facts of the Sebelius debacle would suggest otherwise.

Sebelius labeled her speech at the Human Rights Campaign Gala as an “official” event, meaning that not only would her travel and time be paid for by the taxpayer, but the time and travel of her aide, AJ Pearlman, would be covered as well.  The Hatch Act is a federal law which, according to OSC, “prohibits federal employees from using their official authority or influence to affect the outcome of an election.”  For instance, the Secretary of Health and Human Services, under the law, cannot campaign for a political candidate using her official title, because this would be an abuse of government authority; nor can she use taxpayer-funded travel or the work hours of taxpayer-funded employees and aides to support a political event, because this would be an abuse of taxpayer funding, furthering a personal and political end.  However, Secretary Sebelius committed each of these violations at the HRC Gala – then attempted to cover it up.

In the first half-hearted attempt to make up for this abuse, Sebelius quickly reclassified the event as “political” instead of “official.”  This retroactive attempt to erase the fact that she used her standing as a Cabinet member to influence two upcoming elections was insufficient, and OSC nevertheless concluded that Sebelius did in fact violate the Hatch Act.

The second part of the abuse was the taxpayer dollars spent on the event, and accordingly, Sebelius had an HHS assistant request that the Democratic National Committee reimburse the government for her own travel.  Even this first attempt was mishandled, however: in January 2013, we filed an FEC complaint explaining that the DNC failed to properly disclose this reimbursement.  In fact, the reimbursement was almost impossible to connect to Sebelius’ Hatch Act violation at all: the DNC sent a check marked only with the word “travel” – preventing accountability in determining whether Sebelius’ violation of the law was truly “repaired” by reimbursement for her travel.

But the missteps didn’t end there.  Cause of Action found, after sending Freedom of Information Act requests to four separate agencies, that the U.S. Treasury was not, in fact, reimbursed.  Cause of Action’s FOIA request to the U.S. Treasury’s Financial Management Service turned up no responsive records – even though our FOIA production from OSC proved that Sebelius was ordered multiple times to reimburse the U.S. Treasury.  In the production we received from our FOIA request to HHS, Cause of Action found the DNC’s check, sent to reimburse HHS, not the Treasury:

sebeliusblog1

While White House press secretary Jay Carney again assured reporters that “the U.S. Treasury has been reimbursed,” this has clearly not been the case.  OSC did, however, recognize that HHS was reimbursed instead of the U.S. Treasury, but failed to take action on it, as showed by Cause of Action’s FOIA production from OSC:

sebeliusblog4

The improper reimbursement raises the question of whether the cost of the trip was truly reimbursed, or whether HHS was simply free to use the funds as it wished.  Because OSC did not insist on the proper execution of its own requests for reimbursement, taxpayers dollars remain, in effect, unrecovered.

While the reimbursement for Sebelius’ costs was bungled many times over, Sebelius was not the only federal employee affected by her violation.  In her lengthy process of abdicating responsibility for campaigning on the taxpayer dime, Sebelius effectively threw her own aide under the bus.  AJ Pearlman provided background research in preparation for the HRC Gala where Sebelius promoted Democratic candidates, and attended the event to assist.  As Cause of Action showed in an OSC complaint, when Sebelius scrambled to save her own skin by retroactively reclassifying the event as political instead of official, she made Pearlman’s actions illegal as well.  OSC openly acknowledged that Pearlman’s efforts could not legally be funded by the federal government and ordered Sebelius to reimburse the Pearlman’s travel costs as well, as revealed in a letter from OSC to HHS:

sebeliusblog2 sebeliusblog3

As Cause of Action showed in its January 2013 OSC complaint, if Pearlman’s actions, after Sebelius’s campaigning on government time, could not be funded by taxpayer dollars, then Pearlman too would have committed a Hatch Act violation.  As the OSC wrote to HHS: “the Hatch Act would have prohibited” Pearlman’s work on the HRC event – and so the funding had to be reimbursed.  Cause of Action did its part, but OSC has thus far refused to uphold its own rules (read more about Cause of Action’s letter to Congressman Darrell Issa requesting for investigation into OSC’s failure to execute its duties here).

OSC made clear in the excerpts above that had Sebelius classified the event as political from the beginning, Pearlman’s work would have prohibited by the Hatch Act, but it still chose not to take action against Pearlman. Additionally, the President refused to take any action against Sebelius for her violation, claiming that Sebelius’ meeting with “ethics experts” solved the problem.  The White House won’t hold Sebelius accountable, the U.S. Treasury has not been reimbursed, and OSC’s selective enforcement of the Hatch Act hides Sebelius’s victim: the aide who did as requested.

Sebelius broke federal law but the White House chose not to do its job and ask for her resignation – it seems that its “ethical standards” could use some work.

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06/3/2013

GAO on CPPW: Nothing to See Here

Arriving in the context of a broader lobbying controversy, the Government Accountability Office (GAO) recently released a report on the Centers for Disease Control and Prevention’s (CDC) lobbying policies. Even by the standards of government investigators, the GAO did a pathetic job examining the degree of CDC oversight of the Communities Putting Prevention to Work (CPPW) program and its award recipients.  It makes more sense to describe GAO’s work as a survey of CDC employees, rather than as an independent evaluative report.

In responding to requests for information from Senators Lamar Alexander (R-TN), Tom Coburn (R-OK), Susan Collins (R-ME), and Orrin Hatch (R-UT), the GAO reviewed:

[D]ocuments provided by CDC, including the written policy on lobbying that pertained to CPPW award recipients; CPPW award notices, which were the written agreements between the CDC and recipients; documentation generated by CDC staff during the monitoring of CPPW recipients; and CDC site visit reports.

The GAO also interviewed CDC officials regarding the lobbying policy that applied to CPPW award recipients in two hundred eighty CPPW cooperative agreements, all of which were made in fiscal year 2010.

But just over six weeks ago, Cause of Action (CoA) released its own report, “CPPW: Putting Politics to Work,” examining twelve grant recipients based on responses to FOIA requests we sent to the CDC. Of those twelve, eight appeared to use federal funds to illegally lobby for things like tobacco taxes, clean air ordinances, and bans on sugary-sweetened drinks, rather than on sensible preventative health efforts.

CoA’s report also demonstrated that the CDC failed to take comprehensive action in one case of illegal lobbying it actually managed to identify.  While the GAO had access to information on all grant recipients and considered two potential lobbying violations identified by the CDC, CoA continues to await more information from the CDC on the other grant recipients. If we found that eight of the twelve we have been able to investigate up to this point are at risk of violating federal law, how many more instances are out there that the GAO and CDC have failed to uncover?

Unfortunately, the GAO’s report was not a substantive investigation. In fact, the most noteworthy aspect of the GAO report is how sparingly the GAO examined the CDC’s ability to follow-through on its own processes for correcting instances of illegal lobbying by grantees.  Instead, the GAO confirmed that the CDC engaged in no active audit function for the CPPW program, could not independently verify subrecipient expenses, and depended on self-reporting by grantees.

These findings are particularly troubling because, as the GAO fails to mention in its report, by 2015 the Department of Health and Human Services will be able to spend $2 billion per year in perpetuity on similar programs through the Affordable Care Act’s Prevention and Public Health Fund.

 

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05/30/2013

Jon Corzine: The rogue trader that is too big to jail

More than two years after MF Global blew up and vaporized customer money, the CFTC and CFTC Chair Gary Gensler are finally receiving scrutiny for their actions during MF Global’s bankruptcy.

The CFTC’s watchdog said Gensler was intimately involved with the events leading up to the collapse, but only decided to recuse himself from the case after the official bankruptcy. His recusal was “unnecessary and wasn’t required by ethics rules” according to CTFC’s Inspect General.

Gensler also used his personal email to communicate with staff, which raises questions about the ability to obtain the email records via a Freedom of Information Act Request. Gensler claimed he used personal email because “he did not know how to access his work e-mail from home.” The House Oversight Committee has requested access to his emails from his personal account.

How Jon Corzine went from this

Via Fox Business

To this

Via DailyBail

But still hasn’t been held accountable

The MF Global rogue trader that lost $141 million in an overnight trade in 2008 was sentenced to five years in prison and ordered to pay $141 million in restitution. Ex-CEO of MF Global Jon Corzine put a $6 billion bet on European debt, failed to implement adequate controls despite multiple warnings, and illegally used $1.6 billion in  customer funds (Report and lawsuit). His punishment? He might have to start a hedge fund.

Joe Biden called Corzine “the smartest guy I know in terms of the economy and on finance,”  but Corzine insists his stewardship of MF Global was like this:

Via Imgur

Instead of this:

Via Biosocket

Friends in the right places

Corzine served as CEO of Goldman Sachs for 5 years before heavily financing his campaigns for Senate and Governor of New Jersey. Corzine was a top bundler for President Obama’s reelection campaign and is credited with raising $500,000 or more. Gary Gensler, head of the Commodities Futures Trading Commission (a financial regulator with oversight of MF Global), was a Goldman Sachs alum with Corzine and others in executive positions at MF Global. CFTC’s Director of Public Affairs is a former Corzine aide from his time in the U.S. Senate.

MF Global representatives met with CFTC officials 10 times during 2010 and 2011 and MF Global paid firms a total of $130,000 to lobby the CFTC for favorable regulations in 2010 and 2011.

More than two and a half years after the collapse of MF Global, the CFTC has not issued any enforcement actions and the investigation is still ongoing.

The National Futures Association could not even vote to ban Corzine from trading with other people’s money.

A perfect storm of special treatment

The New York Fed fast tracked MF Global’s primary dealer application shortly after Corzine was announced as CEO. Despite 3 straight years of losses, weak internal controls, and a risky new business strategy, MF Global was designated a primary dealer. It announced a $4.7 million loss for the quarter the following day.

The Financial Industry Regulatory Authority (FINRA) granted a waiver for two required licensing exams which it gives mainly to those returning from public service or to management professionals. Unlike other CEOs, Corzine directly traded with company money and even had his trades separated in documents with his initials: JSC.

If you had blown up a company and illegally used $1.6 billion in customer funds:

Via Times Union

Meanwhile, Corzine is living it up because his political connections leave him unaccountable:

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