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10/12/2016

Report Reveals How White House Evaded Checks, Likely Accessed Confidential Taxpayer Information

Washington, D.C. – Cause of Action Institute (CoA Institute) today released a comprehensive investigative report, Presidential Access to Taxpayer Information. The report covers in detail recent IRS misuse and unauthorized release of confidential taxpayer information and the possible role of a detailee program in the Office of the White House Counsel that may have provided access to the protected information.

The report states:

Following the misuse and unauthorized release of confidential taxpayer information during President Obama’s first term, including the largest breach of taxpayer confidentiality laws by the federal government in United States history, Cause of Action Institute investigated the legal and institutional checks designed to protect against such improper disclosure and the means by which the Obama administration may have evaded those checks.

That investigation revealed that President Obama has circumvented the congressionally created and authorized procedures for accessing confidential taxpayer information—procedures that were designed to be exclusive—by relying on individual consent forms that were never intended for use by the president. The practice has allowed the president to avoid the reporting requirements and limitations placed on presidential access to taxpayer information by the Tax Reform Act of 1976. In particular, the use of individual consents enables the administration to skirt statutory recordkeeping and reporting requirements to Congress, the limitations on the kind of information available for disclosure, and the extent to which such information can be shared within government agencies and offices.

The report reveals that throughout the Obama administration the Office of the White House Counsel employed at least one attorney detailed from the Department of Justice (DOJ) Tax Division.  At least two of those attorney-detailees had intimate knowledge of confidential taxpayer information gained while serving as counsel to the IRS in litigation with nonprofit groups opposed to President Obama’s policies. This information is otherwise restricted from disclosure to the President and other White House officials.

The report shows that neither the DOJ Tax Division nor the Office of the White House Counsel has implemented context-specific training, guidelines, or ethical screens to prevent the inadvertent or deliberate disclosure of confidential taxpayer information by attorney-detailees.

Inherent conflicts of interest in the detailing program make it imperative that Tax Division attorneys who work on detail to the Office of the White House Counsel, especially those who have served as counsel to the IRS in matters involving the political opponents of the president, receive enhanced training and supervision to ensure the safeguarding of confidential taxpayer information. There does not appear to be any such program, specialized training, or targeted guidelines in place.

The report makes several recommendations, including that Congress should amend the Internal Revenue Code to ensure that the exclusive mechanisms created by the Tax Reform Act of 1976 for presidential access to confidential taxpayer information are enforced.

The full report and executive summary can be found here.

 

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09/22/2016

Cause of Action Institute Investigates Taxpayer Bailout of ObamaCare Insurance Companies

Washington, D.C. – Cause of Action Institute (CoA Institute) today sent a Freedom of Information Act (FOIA) request to the Centers for Medicare and Medicaid Services (CMS) to investigate the Obama administration’s apparent attempt to bailout insurers through judicial settlements to compensate for shortfalls in the Affordable Care Act (ACA) risk corridors program.

CoA Institute President and CEO, and former federal judge, Alfred J. Lechner, Jr.: “The continuing failures of the ObamaCare Risk Corridors Program raise serious concerns about the long-term viability of the program.  It appears the administration is attempting to circumvent the law by bailing out insurance companies through judicial settlements. Americans deserve to understand how far the administration is willing to go to prop up a failing program with taxpayer money.”

Under the ACA, the Risk Corridors Program was supposed to collect payments from insurers with lower than expected losses and redirect the money to subsidize insurers with higher than expected losses. But because of the monetary shortfalls in the risk corridors program, payouts have been limited.

On September 9, 2016, CMS released a document entitled “Risk Corridors Payments for 2015,” stating that “no funds will be available at this time for 2015 benefit year risk corridors payments.” More concerning, the CMS document essentially invites judicial settlements with insurance companies:

We know that a number of issuers have sued in federal court seeking to obtain the risk corridors amounts that have not been paid to date. As in any lawsuit, the Department of Justice is vigorously defending those claims on behalf of the United States. However, as in all cases where there is litigation risk, we are open to discussing resolution of those claims. We are willing to begin such discussions at any time.

The CMS document raises serious questions about the intentions of the administration to fund the risk corridors program. Moreover, the U.S. Department of Justice Office of Legal Counsel has also determined that these “backdoor bailouts” are improper.

CoA Institute today requested all records referring to a lack of funds for risk corridors payments to insurance companies, as well as all records related to the September CMS document entitled “Risk Corridors Payments for 2015.”

The full FOIA can be found here.

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09/22/2016

Cause of Action Institute Secures Access to Secret IRS Memos with the White House

Washington, D.C. – Cause of Action Institute has secured access to a series of previously undisclosed memoranda of agreement between the IRS and the White House, which the IRS claims exempts it from prepublication review of its rules.  The release includes agreements between the IRS and White House from 1983 and 1993 that contain “exemptions from regulatory review.”

The IRS has resisted providing the memos to Congress, which have been sought by the Senate Finance Committee but to-date have not yet been provided.  The memos were also discussed in a recently released Government Accountability Office audit.  However, until today, the memos have not been made public.

Click here to access the memos.

Cause of Action Institute President and CEO, and former federal judge, Alfred J. Lechner, Jr.: “Agencies of the federal government should not operate by secret agreement with the White House.  Lawful prepublication reviews are critical to the regulatory process to ensure that rules are developed in a fair and transparent manner. The IRS has skirted these rules for far too long.”

Typically, agencies submit their rules to the White House Office of Management and Budget (OMB) for regulatory review before publication.  However, the IRS has long claimed an exemption from this rule.  As Cause of Action Institute argued to the Supreme Court in an amicus brief, “Over the past ten years, the IRS has submitted only eight rules to OIRA [the Office of Information and Regulatory Affairs] 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.”

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09/21/2016

Why Did U.S. Choose to Send $1.7 Billion in Untraceable Cash to Iran?

Washington, DC – Today, Cause of Action Institute (CoA Institute) sent a second Freedom of Information Act (FOIA) request to the U.S. Department of Treasury to obtain records that will shed light on the Obama administration’s decision to ship more than $1.7 billion in untraceable cash to Iran. In light of recent testimony before Congress, as well as reports of concerns expressed by the Department of Justice, questions remain surrounding the decision to send cash rather than make the payments using more transparent means.

CoA Institute President and CEO, and former federal judge, Alfred J. Lechner, Jr.: “Regardless of the merits of the settlement agreement, and regardless of whether the cash payments created ‘leverage’ for the release of American hostages, shipping more than $1.7 billion in untraceable cash to the world’s leading state sponsor of terrorism appears to be unjustifiable – particularly when alternative, more transparent means were available.”

Between January 14 and February 5, 2016, the U.S. Department of the Treasury transferred approximately $1.7 billion to Iran. The payments allegedly settled a long-standing claim before the Iran-U.S. Claims Tribunal, but Obama administration officials have also conceded that the payments served as “leverage” to ensure the release of several Americans held hostage by Iran. The Treasury Department wired each of the payments to a European bank, where it was then converted into foreign currency and the cash disbursed to an Iranian official.

Last month, President Obama said that “we had to give [the Iranians] cash . . . because we’re so strict in maintaining sanctions.” This month, the Treasury Department provided testimony to Congress directly contradicting the president’s statement and asserting that in fact the U.S. government has broad leeway to engage in transactions necessary to settle claims before the Iran-U.S. Claims Tribunal.  In fact, the Department of Treasury recently confirmed to Politico that two wire transfers occurred from the U.S. to Iran around the same time period.

This discrepancy raises questions about the nature of the payments and why – if they were made pursuant to a settlement agreement and therefore could have been wired – the Obama administration agreed to pay the Iranians in untraceable cash.

The FOIA requests all relevant Treasury authorization records for these payments as well as certain communications between the Treasury Department and the State Department concerning the settlement.

The full FOIA request can be found here.

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09/9/2016

CoA Institute Investigates Extravagant Taxpayer-Funded Foreign Travel, ‘Over the Top’ Office Renovations by Commerce Dept. Employee

Washington, DC – Today, Cause of Action Institute (CoA Institute) sent a Freedom of Information Act (FOIA) request to the Department of Commerce Office of Inspector General (OIG) to investigate misconduct by a high-ranking political appointee, including inappropriate travel reimbursements and excessive spending on office renovations.

CoA Institute President and CEO, and former federal judge, Alfred J. Lechner, Jr.: “A high-ranking political appointee at the Department of Commerce must be held accountable for his rampant wasteful spending and misconduct. Reports of taxpayer-funded lavish foreign travel, luxury car service, and ‘over the top’ office renovations raise serious concerns. Such misconduct is beyond inappropriate and could even be criminal.  American taxpayers have the right to know whether such wasteful spending could be a more widespread problem at the agency.”

On September 8, 2016, the Department of Commerce Office of Inspector General (OIG) released a report detailing numerous instances of misconduct and wasteful spending. A high-ranking political appointee appears to have regularly used the U.S. Treasury as a slush fund by staying in luxury hotels and using luxury car services at taxpayers’ expense.

In one case, the employee traveled to Geneva, Switzerland where he stayed at a luxury hotel that cost around $1,150 per night, despite the allowable per diem being $340 per night. He was subsequently reimbursed 150 percent of the standard per diem rate for his entire stay, even though a portion of the trip was for personal travel. During the same trip, one of his staff members stayed in a room at a different hotel that was below the per diem rate.

Taxpayers also footed the bill for the employee to travel in luxury vehicles, including nearly $1,800 for an SUV provided by a luxury hotel during his two-day trip to Boston, Massachusetts.

The employee also spent an excessive amount of taxpayer money on his office renovations, likely violating the Anti-Deficiency Act. Despite Congress limiting office renovations to $5,000, the Department spent more than $50,000 on this political appointee’s office.  Shortly after assuming his role with the Department, the employee instructed his subordinates to make the space “reflective of [his] position.” Some subordinate employees were apparently fearful of losing their position if the renovations were not acceptable. According to the OIG report, renovations included new carpeting “chosen after consultation with an interior maintenance specialist” for a luxury hotel. An administrative official described these renovations as “over the top.”

In order to understand the full extent of the abuses, CoA Institute requests all of the materials compiled by the OIG for its report. The full FOIA request can be found here.

 

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08/31/2016

CoA Institute Investigates Political Pressure in Decision to Withdraw Atlantic OCS from Oil and Gas Leasing Program

Washington, DC – Today, Cause of Action Institute (CoA Institute) sent a Freedom of Information Act (FOIA) request to the U.S. Department of the Interior (DOI) to find out whether there was political pressure surrounding DOI’s decision to withdraw the Atlantic Outer Continental Shelf (OCS) from its five-year Oil and Gas Leasing Program.

CoA Institute President and CEO, and former federal judge, Alfred J. Lechner, Jr.: “The changing positions of both the Department of the Interior and Senator Kaine raise questions about whether DOI withdrew the Atlantic OCS from the leasing program due to political pressure. Less than one month after Hillary Clinton selected him as her vice presidential running mate, Senator Kaine changed his position and now opposes offshore energy development in the Atlantic. Such an abrupt departure from his previous position, as well as DOI’s decision to disregard strong support for including the Atlantic, raise questions as to why this region was withdrawn from the program.”

Background:

When DOI released its Draft Proposed Program in January 2015, it included one lease sale in the Atlantic Region. The inclusion of the Atlantic in the DPP enjoyed broad support. Members of the congressional delegations from affected East Coast states, including Senator Tim Kaine of Virginia, supported the inclusion of the Atlantic Planning Areas.

On March 15, 2016, DOI announced its decision to withdraw the Atlantic Planning Areas from the program. Within months, Sen. Kaine also reversed course and said he opposed offshore energy development, citing objections from the Department of Defense (DoD). DOI, meanwhile, has insisted that the withdrawal of the Atlantic Planning Areas was not predominantly attributable to the DoD.

CoA Institute today requested access to all communications concerning the Atlantic OCS and the 2017-2022 OCS Oil and Gas Leasing Program between or among DOI and its bureaus, as well as communications about the program between the White House, DoD, and the office of Senator Kaine.

The full FOIA request can be found here.

 

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08/26/2016

CoA Institute Probes HHS’s Decision to Use Taxpayer Money to Pay Off Insurance Companies

Washington, D.C. – Cause of Action Institute (CoA Institute) today filed a Freedom of Information Act (FOIA) request to investigate the U.S. Department of Health and Human Services’ decision (HHS) to shift money away from taxpayers to pay off insurers.

CLICK HERE TO VIEW THE FOIA REQUEST

The Affordable Care Act (ACA) established the transitional reinsurance program that requires HHS to make payments to health insurers who enroll high-risk individuals and deposit a portion of the contributions from insurers into the U.S. Treasury. Unfortunately for taxpayers, it appears when HHS collected less funds than required by the ACA, the agency decided to allocate all transitional reinsurance program funding to health insurers, depriving taxpayers of billions of dollars.

CoA Institute President and CEO, and former federal judge, Alfred J. Lechner, Jr.:

“COA Institute seeks to understand why the Obama Administration bailed out insurance companies with money that should have been returned to the U.S. Treasury to benefit taxpayers. Providing insurers with the entire contribution from the transitional reinsurance program is not the intention of section 1341(b)(4) of the Affordable Care Act. American taxpayers have a right to know why the Obama Administration skirted the law and gave money intended for the U.S. Treasury to insurance companies.”

Background:

Section 1341 of the ACA created the transitional reinsurance program. This program requires that HHS collect reinsurance contributions from health insurance providers and third party administrators on behalf of group health plans. In order to comply with the law, HHS was supposed to use those contributions to make payments to health insurers who enroll high-risk individuals and deposit a portion of the contributions in the U.S. Treasury. In total for 2014, 2015, and 2016, taxpayers were scheduled to receive $5 billion. According to the Congressional Research Service, providing the entire contribution from the transitional reinsurance program to health insurance providers is “in conflict with a plain reading of 1341(b)(4).”

CoA Institute requests documents and communications to understand the Obama Administration’s decision to use taxpayer money to pay off health insurance companies. The full FOIA request is available HERE.

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