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01/10/2013

When cronyism takes the place of merit at the DOE, everyone loses

With the new push towards green energy most recently from the 44th administration, Congress created Department of Energy loan guarantee programs designed to help the private sector develop new technology and products. Sadly, instead of the return Americans were expecting, they found much of their money upside down in poorly executed projects.

It should come as no surprise that these projects failed, given the level of cronyism that went into the decision making process for DOE loan guarantees. Still, shock or no shock, when cronyism takes the place of merit, everyone loses.

If we look at the electric car initiative alone, failures abound. Fisker is selling cars that catch fire. Tesla hit a huge snag when they started swallowing cash at an enormous rate without churning out product.

And the worst part? All of these failures could have been prevented if cronyism not been the modus operandi of the Department of Energy and White House.

When Cause of Action took on XP Vehicles and Limnia as our clients, we learned that the level of cronyism extended beyond just “picking winners and losers.”

  • DOE had two sets of rules with respect to these programs: one for its favored cronies, and one for everyone else. The DOE loan programs were designed by Congress to help the private sector develop new technology. Instead, there is overwhelming evidence that DOE repeatedly discriminated against companies that lacked a history of large campaign contributions and political patrons.
  • DOE admitted in writing that our client was qualified for an ATVM loan but still denied its loan application.  Although DOE had billions in available funds, it asserted that it could not fund all qualified applicants, and that our client failed to meet certain secret “merit review” criteria.  These secret criteria mysteriously resulted in DOE funding only government crony companies.
  • Despite having $16 billion of unused loan authority, DOE has refused to make a single ATVM loan to another electric vehicle company since funding Tesla and Fisker in 2009, thus protecting both Tesla and Fisker from competition.
  • There is strong evidence DOE slyly gave our client’s confidential intellectual property—IP that DOE itself believes is 3 times more effective than traditional hybrid batteries—to GM and possibly gave unique pressure membrane technology to Ford; actions that, if true, violate the agency’s confidentiality agreements, as well as the trust of the American people.

Not only did XP have all the merits of any of their competition, but they had better technology. A car that wouldn’t catch fire like Fisker, or one that didn’t rely on other crony corporations to provide energy storage technology.

We hope that XP Vehicles, Limnia, and the American people find their vindication, which is why we’ve filed two lawsuits detailing the ways that they have been wronged. To see the documents we filed in the US District Court for the District of Columbia and the US Court of Federal Claims click here.

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01/4/2013

A new year’s resolution for the federal government

In a recent Washington Examiner article, Executive Editor Mark Tapscott asked leading advocates for government transparency for their thoughts on what should be the government’s top transparency priorities for 2013. Cause of Action’s Executive Director Dan Epstein was featured as one of the “Nine people who know how to make government work better, more honestly.” Dan laid out five needed changes in the federal government that would yield greater accountability and transparency. One area he touched on is Freedom of Information Act (FOIA) requests.  In addition to Dan’s suggestion of a “Uniform database of FOIA requests and processing, following current online tracking used by the Department of Labor and the FBI,” we want to offer some practical ways agencies can and should be improving their FOIA approach.

For those of us who believe in an honest, transparent government, 2012 was a disappointing year. In January 2009, President Obama submitted a memorandum for heads of Executive Branch agencies stating, “The Freedom of Information Act should be administered with a clear presumption: In the face of doubt, openness prevails.”

Despite the administration’s self-proclaimed commitment to openness, the responses to FOIA requests and lack of available data highlight a lack of follow-through from numerous agencies.

The Cato Institute graded the federal government’s data publication practices and found that, “the administration and the Congress both receive fairly low marks under systematic examination of their data publication practices.” On budgeting, appropriating and spending, eight out of 11 subjects received a D or F.

A Bloomberg investigation submitted FOIA requests to 57 agencies asking for travel records for Cabinet Secretaries and top officials in fiscal year 2011. Only 8 of the 57 agencies provided the documents within the 20-day period required by law and 7 provided the documents within 21 to 30 days. Almost half of the agencies did not provide documents at all by September 14, 2012 (the requests were sent in June of 2012). In a follow-up report in December of 2012, Bloomberg noted that 19 agencies still had not provided documents, including nine of 15 cabinet offices.

A staff report by the House Committee on Oversight and Government Reform examined the FOIA tracking systems for 180 government entities and gave cabinet agencies a C- grade and all 180 entities a B-. The report notes, however, that this only tests an agency’s ability to track its own FOIA requests and does not necessarily reflect its ability to respond to requests.

A FOIA Project study found that FOIA lawsuits have increased 28 percent during 2007-2008 and 2011-2012 from 562 to 720.

Here at Cause of Action, many of the FOIA requests we filed in 2012 hit unnecessary roadblocks including superfluous redactions, needless fees, and failure to meet time mandates required by the law. At one bureau, a whopping 30 percent of our requests have gone unfulfilled for more than 180 days, and at another our investigations team was halted when a FOIA officer went on vacation for 3 weeks without anyone to even answer our questions.

But now, it’s 2013. A new year has come, both in time and politics. This year, we have three New Year’s resolutions to suggest for the government.

  1. Increase efficiency in providing responsive documents to FOIA requests. Some of our requests have been open for more than 6 months with no production. At the very least, agencies should attempt to provide a timetable for when the documents can be produced.
  2. FOIA officers should improve communications with requesters by responding to email and phone calls in a timely manner. One agency could not give any information on one of our outstanding requests because the FOIA officer in charge of our request was out of town for almost three weeks. We could not get a status update or even an acknowledgement that they had our request. If the agency has a question regarding the FOIA request, it should not hesitate to contact the requester to resolve the issue. This will cut down on response times while also reducing appeals and lawsuits.
  3. President Obama and Attorney General Holder need to enforce the vision set out in their 2009 memorandums. Holder stated that agencies “should not withhold information simply because it may do so legally” and “whenever an agency determines that it cannot make full disclosure of a requested record, it must consider whether it can make partial disclosure.” These promises have largely gone unfulfilled, and since there’s no better time than the present, 2013 would be a good time to start keeping them.
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12/21/2012

Why the FEC should investigate DISH

Cause of Action recently filed a complaint with the Federal Election Commission asking it to investigate allegations that Board Chairman of DISH Network Corporation, Charles Ergen, violated the Federal Election Campaign Act (FECA) by compelling C-level executives (CEO, CFO etc.) to contribute to various political funds, including the corporate PAC.

The objective of FECA is to regulate the influence of money on politics by requiring that contributions from executive employees to the corporate PAC be voluntary. As a result, it is illegal for a corporate PAC to solicit funds from executive employees by threatening them with physical force, job discrimination, or financial reprisals. Similarly, the corporation must inform the employees that their refusal to contribute will not carry a risk of reprisal.

In the case of Dish Network, Cause of Action is concerned that FECA laws may have been broken. By allegedly compelling executives to make political contributions by threatening their job security, DISH Network Corporation undermined the purpose of FECA, an act that, if true, shouldn’t be taken lightly.

Cause of Action has asked the Federal Election Commission to investigate these allegations. You can see our filing here.

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12/12/2012

Cause of Action files motion for temporary restraining order in Drakes Bay Oyster Co. case

The effort to fight Secretary of the Interior Ken Salazar’s decision to shut down Drakes Bay Oyster Company has been moving full steam ahead since the November 30 announcement.

Last week, the Lunnys, represented by Cause of Action along with Stoel Rives, LLP; SSL Law Firm, LLP, and Briscoe Ivester & Bazel LLP filed a lawsuit against the federal government and Secretary Salazar after the farm was denied the renewal of its special use permit and given 90 days to finish up all operations, shut down their business, and move off of National Park Service land.

Today, the Lunnys’ attorneys filed a motion for a temporary restraining order in hopes of providing relief for the Lunnys to operate their business while we fight this abuse of authority and bring justice for the families, the community and the company affected by this decision.

The goal of the temporary restraining order is to prevent irreparable harm, which cannot be compensated by money, from being done to the company and the oysters while the court decides whether or not the government’s decision was unlawful. Freezing time on the 90-day sentence will allow Drakes Bay to continue working until the court has reached a decision in the case.

You can find the motion here and read more on the case here.

For more updates on the case be sure to check out our newsroom.

 

As of May 24, 2013, Cause of Action no longer represents Drakes Bay Oyster Company, the Lunny family, or Dr. Corey Goodman and will be withdrawing as counsel from the litigation.

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12/5/2012

Drakes Bay Oyster Company and Cause of Action take on the Department of the Interior

We represent Drakes Bay Oyster Company; a small, family-run, sustainable oyster farm located in Point Reyes National Park. It’s been forty years since the National Park Service first issued a use permit for farming on the land, and now Ken Salazar has decided not to renew the permit to the Lunny family—but this family, this community and this nation isn’t going down that easily.

On Monday, Cause of Action, Soel Rives LLP, and SSL Law Firm LLP filed suit in the US District Court for the Northern District of California in San Francisco. The lawsuit was brought against the US Department of the Interior, the National Parks Service, NPS Director John Jarvis, and Secretary of the Interior Ken Salazar.

What does it mean for the Lunnys? As Kevin Lunny said recently, “We’re not going to walk away…We’re fighting for our community, our employees, and our family.”

For the community? It means a loss of sustainable, locally grown food source—one that supplies 40% of the oysters to bay-area restaurants. It also means the destruction of 30 jobs, the loss in potential profits from rising oyster costs as well as a widening gap in the local-food chain.

For the nation? If Salazar, like others in the president’s cabinet, can continue to break laws without repercussion, then you be the judge: what does that mean for our nation?

For more on the developments of the Lunnys story and Cause of Action’s part in the fight, check out our newsroom.

 

As of May 24, 2013, Cause of Action no longer represents Drakes Bay Oyster Company, the Lunny family, or Dr. Corey Goodman and will be withdrawing as counsel from the litigation.

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11/27/2012

Whistleblower Protection Enhancement Act signed into law

At Cause of Action, we are always interested in whistleblower protection. In fact, the fight for government accountability depends on whistleblowers from within the government who are willing to step forward to hold our government accountable.

Today, President Obama signed into law the Whistleblower Protection Enhancement Act (WPEA), furthering protection for those who report government waste, fraud and abuse.

After many years spent in development, the WPEA was presented to the Senate and unanimously passed on November 14, 2012. Soon after, on November 21, President Obama waived the rescission of $11.5 million in funds for several department and agency inspectors generals so they could continue their long-term investigations. The waiver applies to the departments of Commerce, Housing and Urban Development, and Transportation, National Science Foundation and Small Business Administration. The waiver also applies to the Department of Treasury’s inspector general for tax administration.

The new law puts into effect many positive changes:

(1)    It increases protections for whistleblowing to Congress.

(2)    It increases agency responsibility to inform prospective whistleblowers of their rights.

(3)    It requires Inspector Generals to directly appoint assistant IGs for whistleblower protection and investigation purposes.

(4)    It specifically outlines the need to protect against censorship of data and research at federal agencies.

 

Read more about the WPEA here and listen to Executive Director, Dan Epstein, discuss it here.

Blow the Whistle here.

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11/14/2012

Update: CoA to defend motion to dismiss in Fuel Cell Energy cronyism case

Over the past few months, Cause of Action has been working to expose the state of Delaware’s scheme to favor Bloom Energy, Inc. over its competitors. The cronyism that has been taking place reveals unconstitutional discrimination against other companies and because of this deal, the burden has been unfairly placed on Delaware taxpayers.

Today, Cause of Action’s Chief Counsel for Regulatory Affairs, Amber Abbasi, presented oral arguments in court arguing the need for a fair trial. We hope the judge will decide to allow us to defend the taxpayers of Delaware and fight the cronyism deal.

Read more about the case here. The complaint can be found here.

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