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Washington, DC – Cause of Action Institute (CoA Institute) today filed a complaint in the U.S. District Court for the District of Columbia against the Central Intelligence Agency (CIA) seeking access to records concerning the undue influence of political appointees in processing Freedom of Information Act (FOIA) requests.  The requested records were created by the CIA Office of Inspector General (OIG) but are accessible under FOIA through the CIA. The CIA is one of the few agencies that has refused to release the relevant records without sufficient explanation.

CoA Institute President & CEO, and former federal judge, Alfred J. Lechner, Jr.: “All federal agencies have the obligation to efficiently and effectively respond to FOIA requests. After three years, the CIA has demonstrated it has no intention of providing the requested documents in a timely manner. The current administration has neglected its duties under FOIA and allowed federal agencies to undermine transparency requirements. Despite numerous media reports that have criticized the Obama administration for its poor efforts to ensure transparency and openness, agencies continued to abuse the law and permit political appointees to insert themselves into the FOIA process.”

Congress requested the OIGs of several agencies to conduct audits of their FOIA programs looking into inappropriate influence of political appointees in the processing of records requests.  In two seperate FOIA requests, CoA Institute requested the CIA OIG’s final reports, but the agency has yet to produce the documents.  In one case, the CIA has stonewalled CoA Institute for three years and has twice indicated that it “will not acknowledge or respond to any additional queries regarding the status” of the CoA Institute FOIA request.

FOIA requires an agency to respond to a request within twenty business days or, in “unusual circumstances,” within thirty business days. Although President Obama came into office with promises of transparency, his administration’s actions have not matched such rhetoric.  Under a non-public 2009 White House memorandum, federal agencies were instructed to consult with Office of White House Counsel before producing any documents that involve so-called “White House equities.” The result of this memo is the unlawful expansion of White House control of agency FOIA processes and usurped agency responsibility for finalizing determinations.  Additionally, agencies have politicized FOIA processes by creating “sensitive review” procedures that permit political appointees and agency press officials to intervene in and obstruct the processing of FOIA requests.

In May, Cause of Action Institute filed a lawsuit against 11 federal agencies and the White House to end the Obama administration’s practice of delaying government responses to FOIA requests that the administration considers politically sensitive or embarrassing. Read more HERE.

To access the complaint filed today against the CIA click HERE.

Washington, DC – The Cause of Action Institute (CoA Institute) today filed a legal complaint against the Internal Revenue Service (IRS) and its commissioner, John Koskinen, for refusing to capture and preserve electronic communications of employees that deal with official business, as required by the law.

CoA Institute President & CEO Alfred J. Lechner, Jr.: “The IRS and Commissioner Koskinen have a legal obligation to preserve official work communications between employees. It appears that federal records are being deleted because the IRS, in a deal with its employee union, refuses to preserve certain types of electronic communications. This lawsuit seeks to ensure that IRS follows the law. No agreement with a union or any other party can supersede Americans right to know how the IRS makes decisions.”

Documents obtained by CoA Institute show that the IRS has a private agreement with its employee union stipulating that the agency will not save the instant message records of its employees. But the IRS cannot allow such an agreement to supersede its statutory obligations to preserve records.  In addition, the IRS is violating the law by regularly deleting all employee text messages as a matter of convenience.

CoA Institute filed its lawsuit with the U.S. District Court for the District of Columbia to force the IRS to comply with its obligations under the Federal Records Act (FRA) to capture and preserve all relevant records.  The complaint seeks an order from the court to require the IRS to establish appropriate guidelines for the preservation of federal employees’ instant message and text message records and to preserve all such records permanently until the establishment of those guidelines.

Background:

Failure to preserve instant messages:

On June 30, 2015, the Treasury Inspector General for Tax Administration issued a report on the hard drive failures within the IRS that resulted in the loss of numerous agency records, including the email communications of Lois Lerner, former head of the IRS tax-exempt organizations unit.  That report revealed that the IRS maintained an instant messaging system for employee communications. But as a result of a memorandum of understanding between the IRS and the National Treasury Employees Union, the IRS did not capture, preserve, or retain such instant message records.  When CoA Institute submitted a FOIA request seeking information regarding this policy, the IRS confirmed that it “does not capture or maintain” the instant message records of its employees.

Failure to preserve text messages:

As part of an investigation into how federal agencies process their text message records, CoA Institute submitted a FOIA request to the IRS in November, 2014, asking it to produce the text message records of five high-ranking agency officials.  In response to that request and in follow-up communications, the IRS revealed that, due to “routine system housekeeping” and “spacing constraints,” text messages are retained for only 14 days and are thereafter deleted.

To access Cause of Action Institute’s complaint, click here. The accompanying exhibits may be found here.

 

Cause of Action Institute Asks Lawmakers To Investigate Ex-State Department Employees’ Use Of Clinton Campaign Email Accounts

FOR IMMEDIATE RELEASE:

FEBRUARY 17, 2016

WASHINGTON – Cause of Action Institute is calling on Senate Judiciary Chairman Chuck Grassley and House Oversight Chairman Jason Chaffetz to investigate whether federal employees used email accounts from Hillary Clinton’s 2008 presidential campaign to conduct official government business. Cause of Action Institute is also demanding that these committee chairmen determine whether additional communications exist that, in violation of the law, were not preserved.

Our letter to the chairmen follows the recent discovery of documents showing the use of official Clinton campaign email addresses by State Department employees.

CLICK HERE TO READ THE LETTER

“The use of campaign-funded email accounts for government business raises a host of potential compliance issues,” said Cause of Action Institute Executive Director Daniel Epstein. “The American taxpayers deserve to know how Washington uses their money – vigilant oversight is necessary to determine why federal officials had access to and control over campaign email accounts and whether these records should be recovered.”

BACKGROUND

As part of a Freedom of Information Act lawsuit against the State Department filed on behalf of The Daily Caller, Cause of Action Institute (“CA Institute”) recently obtained documents showing that former Hillary Clinton campaign aide and State Department employee Cheryl Mills emailed Clinton’s former IT staffer, Bryan Pagliano, at his 2008 campaign address, bpagliano@hillaryclinton.com, to inform him that she had lost her personal Blackberry.

A search of the State Department’s FOIA public reading room shows that the agency has produced ten records revealing both Cheryl Mills and another Clinton aide, Huma Abedin, maintained hillaryclinton.com email accounts during their official tenure. The hillaryclinton.com domain belongs to Friends of Hillary, the principal candidate campaign committee of Hillary Clinton during the 2008 presidential campaign.

Because the public has a right to know whether campaign-funded email accounts were used to evade FOIA and federal records laws, CA Institute is calling on Sen. Grassley and Rep. Chaffetz to investigate these and other questions, such as:

• What other ex-campaign staffers employed at the State Department or elsewhere in the government continued to use their Hillary Clinton campaign email accounts?

• Does an email exchange between Sec. Clinton and Ms. Mills with the subject line “My candidacy” (found in the State Dep’t FOIA public reading room) implicate a violation of the Hatch Act, which prohibits government employees from using government time and resources to engage in political and campaign activities?

• Did Sec. Clinton’s 2008 campaign violate the Federal Campaign Election Act by transferring Ms. Mills’s Blackberry or any other communication devices purchased by the campaign to ex-campaign staffers free of charge?

For historical context, in January 2011, the U.S. Office of Special Counsel, which investigates political activities by federal agency officials and employees, found that when George W. Bush White House employees used campaign email accounts to coordinate official government policy and travel, they violated the Hatch Act.

These findings were prompted by a 2007 investigation by Rep. Henry Waxman, then-Chairman of the House Oversight Committee, who found the White House’s use of Republican National Committee and Bush/Cheney ’04 presidential campaign email accounts constituted violations of the Presidential Records Act – the federal recordkeeping requirements for the President that mirrors the Federal Records Act, which binds agencies like the State Department.

Cause of Action Institute is a government oversight group committed to ensuring that federal regulatory decisions are open, honest, and fair.

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Here’s What They’re Saying About LabMD’s Victory Against the Federal Trade Commission

A “Stunning Defeat” For The FTC

Reuters: “The First Defeat For An Agency That Has Successfully Brought Such Cases Against Dozens Of Companies.”(Joel Schectman, “U.S. Regulatory Agency Loses First Data Security,” Reuters, 11/16/15)

The Wall Street Journal: “The Federal Trade Commission’s Data-Security Enforcement Efforts Have Received A Setback—At The Hands Of The Commission’s Own In-House Judge.”(Brent Kendall, “Federal Trade Commission Loses Data Security Ruling,” The Wall Street Journal’s Law Blog, 11/16/15)

• “A Long-Running And Sometimes Bitter Case.”(Brent Kendall, “Federal Trade Commission Loses Data Security Ruling,” The Wall Street Journal’s Law Blog, 11/16/15)

“In A Data Security Enforcement Action That Some Have Characterized As A Modern Version Of David Vs. Goliath, David Won Today, And The FTC Lost.”(Dissent, “FTC V. LabMD Ruling Issued: FTC Loses Data Security Enforcement Case,” Databreaches.Net, 11/13/15)

The Privacy Advisor: “The Case Currently Represents The First Time A Company Has Challenged An FTC Complaint Brought On The Grounds Of Unreasonable Information Security And Won.” (San Pfeifle, “FTC Complaint Against LabMD Dismissed,” The Privacy Advisor Blog, 11/16/15)

“FTC Blasted In LabMD Data Security Case.” (Patterson Belknap, “FTC Blasted In LabMD Data Security Case,” Lexology Blog, 11/16/15)

“The Federal Trade Commission Was Handed A Stunning Defeat Late Friday.” (Patterson Belknap, “FTC Blasted In LabMD Data Security Case,” Lexology Blog, 11/16/15)

• Data Security Blog: “The Federal Trade Commission Was Handed A Stunning Defeat Late Friday.” “In a long-running and highly contentious data security enforcement action against LabMD, a small medical testing laboratory, the Federal Trade Commission was handed a stunning defeat late Friday.” (Craig Newman, “FTC Blasted In LabMD Data Security Case,” Data Security Law Blog, 11/16/15)

 

A Bittersweet Moment For LabMD

The Ruling, While Correct, Can’t Reverse The Damage That’s Already Been Done To LabMD: “This is like getting a guilty verdict after a murder,” he said, noting that his once-thriving business, LabMD, is dead and its former employees have scattered.”(Kirk Victor, “After LabMD scores big victory, will the FTC appeal?,” FTC Watch, 11/17/15)

LabMD CEO Michael Daugherty: “It’s Like After A Murder And The Criminal Is Found Guilty…But The Person Is Still Dead. LabMD Is Still Dead.” (Joel Schectman, “U.S. Regulatory Agency Loses First Data Security,” Reuters, 11/16/15)

• Daugherty: “I Had No Choice But To Fight:” “I spoke with LabMD CEO Michael Daugherty over the weekend about the ruling and its implications.  He told me that he fought the FTC because he was faced with “death by a consent decree or death by damage” and that the headline risk of a data security breach in the health care industry would have ‘terrified’ his clients and meant an end to his business.  ‘I had no choice but to fight.  LabMD is dead.  I had nothing to lose.’”(Craig Newman, “FTC Blasted In LabMD Data Security Case,” Data Security Law Blog, 11/16/15)

• And That Fight Will Continue: “No matter what they do, I will not be going away,” Daugherty vowed in an interview with FTC:WATCH following the decision.”(Kirk Victor, “After LabMD scores big victory, will the FTC appeal?,” FTC Watch, 11/17/15)

 

Cause Of Action’s Dogged Pursuit Of The Truth Played No Small Role In The Judge’s Decision

Pittsburgh Tribune-Review: “Cause Of Action, A Washington Nonprofit, Represented LabMD Before The Administrative Law Judge. Executive Director Daniel Epstein Hailed The Decision For Setting A Higher Standard For The FTC To Show Actual Harm In Cases Of Lost Data.” (Andrew Conte, “Judge Tosses Leak Complaint In Breach Of Patient Information,” Tribune-Review, 11/16/15)

Cause Of Action Enabled LabMD To Become The First Company To “Fight Back Against FTC:” “Attorney Daniel Epstein, executive director of non-profit advocacy, Cause of Action Institute, which represented LabMD in its dispute with the FTC, noted that LabMD was the first company to refuse a ‘consent order’ and fight back against FTC. “After hearing the evidence and reviewing the legal arguments, Chief Judge Chappell decisively rejected FTC’s claims, issuing a decision that will protect small businesses from future government abuses,” Epstein said in a statement.” (Marianne Kolbasuk McGee, “Judge Dismisses FTC Case Against LabMD,” Gov Info Security, 11/17/15)

“The Ruling Culminated A Series Of Victories For Cause Of Action Against The FTC’s Overreach.” (Cause Of Action, Press Release, 11/16/15)

• Cause Of Action Helped LabMD Force An FTC Commissioner To Recuse Herself From The Case: “In December 2013, LabMD sought to disqualify Commissioner Brill on the basis of two speeches the Commissioner had made concerning enforcement activity in the data security area. While denying that these speeches created any such issue, the Commissioner quickly recused herself to avoid creating “an undue distraction” in the adjudication.” (John Graubert, “Administrative Law Judge Dismisses FTC’s LabMD Complaint, Finding Insufficient Evidence of “Substantial Injury” to Consumers,” National Law Review, 11/18/15)

• Cause Of Action Also Helped LabMD Get Faulty Evidence Used By The FTC Dismissed: “After this testimony and similar allegations made elsewhere, FTC staff indicated it would not rely on certain Tiversa-related testimony and evidence in its proposed findings of fact.”(John Graubert, “Administrative Law Judge Dismisses FTC’s LabMD Complaint, Finding Insufficient Evidence of “Substantial Injury” to Consumers,” National Law Review, 11/18/15)

“Cause Of Action Institute Executive Director Daniel Epstein, In A Statement, Called The FTC’s Case “Meritless.”(Dan Bowman, “Judge Dismisses FTC Security Enforcement Case Against LabMD,” FederalHealthIT, 11/16/15)

• Cause Of Action Institute Executive Director Dan Epstein: “Although FTC’s Ostensible Justification For This Boondoggle Was ‘Data Security,’ It Produced No Evidence That Even A Single Patient Was Harmed By LabMD’s Alleged Inadequacies.” (Dan Bowman, “Judge Dismisses FTC Security Enforcement Case Against LabMD,” FederalHealthIT, 11/16/15)

Cause Of Action Noted That The FTC Wasted “Millions Of Taxpayer Dollars:” Cause of Action bashed the FTC for spending “millions of taxpayer dollars” to pursue its claims against the lab, which was forced to wind down operations during the course of the costly matter, and accused the commission of using the case to “intimidate” other businesses into quickly settling similar matters. “This ruling puts a return address on bureaucratic abuses of power, and proves that sometimes the good guys win,” Epstein said.” (Allison Grande, “FTC Loses LabMD Data Security Suit,” Law360, 11/16/15)

 

The FTC Never Should’ve Gone After LabMD

“It Was An Enforcement Action That The FTC Never Should Have Commenced.” “It was an enforcement action that the FTC never should have commenced, as I’ve argued repeatedly, and today’s loss may actually make future enforcement actions more difficult for them as the standard for demonstrating likelihood of substantial injury has now been addressed in this ruling.” (Dissent, “FTC V. LabMD Ruling Issued: FTC Loses Data Security Enforcement Case,” Databreaches.Net, 11/13/15)

“LabMD Pushed Back And Refused To Settle With The FTC.” “But LabMD pushed back and refused to settle with the FTC.  The ensuing three years were filled with numerous discovery and sanctions motions and multiple motions to dismiss, all of which were denied.” (Craig Newman, “FTC Blasted In LabMD Data Security Case,” Data Security Law Blog, 11/16/15)

National Law Review: “The FTC’s allegations were too speculative to support a conclusion of “likely” injury to consumers.” (John Graubert, “Administrative Law Judge Dismisses FTC’s LabMD Complaint, Finding Insufficient Evidence of “Substantial Injury” to Consumers,” National Law Review, 11/18/15)

FierceHealthIT: The FTC “Failed To Prove The Breach Harmed, Or Could Potentially Harm, Consumers.” “The Federal Trade Commission’s data security enforcement case against Atlanta-based cancer screening laboratory LabMD following an alleged 2008 data breach was dismissed Friday by an administrative law judge who said that the agency failed to prove the breach harmed, or could potentially harm, consumers.” (Dan Bowman, “Judge Dismisses FTC Security Enforcement Case Against LabMD,” FierceHealthIT, 11/16/15)

Chief Administrative Law Judge Michael Chappell On Tiversa: “Unreliable, Not Credible. No Weight.” “Judge Chappell scolded the FTC for relying on the work of Tiversa which he found “unreliable, not credible” accorded it ‘no weight.’” (Craig Newman, “FTC Blasted In LabMD Data Security Case,” Data Security Law Blog, 11/16/15)

FTC Watch: The FTC Relied On Highly Questionable Evidence: “The FTC never produced any consumers who actually suffered harm.” (Kirk Victor, “After LabMD scores big victory, will the FTC appeal?,” FTC Watch, 11/17/15)

Chief Administrative Law Judge Michael Chappell: The FTC Investigation Had Not “Identified Even One Consumer That Suffered Any Harm As A Result Of [LabMD’s] Alleged Unreasonable Data Security.” (Brent Kendall, “Federal Trade Commission Loses Data Security Ruling,” The Wall Street Journal’s Law Blog, 11/16/15)

Law360: Judge Rules FTC Failed To Show LabMD Caused Harm To Consumers “Dealing A Blow To The Regulator’s Active Privacy Enforcement Agenda.” “An administrative law judge on Friday tossed the Federal Trade Commission’s closely watched data security suit against LabMD, ruling the commission had failed to show that the laboratory’s alleged conduct had caused harm to consumers and dealing a blow to the regulator’s active privacy enforcement agenda.” (Allison Grande, “FTC Loses LabMD Data Security Suit,” Law360, 11/16/15)

Big Data Tech Law: “The Government’s Case Was Made Uniquely Vulnerable By Its Partial Reliance On The Fruit Of The Uniquely Poisoned Tree.” “Of course, the government’s case was made uniquely vulnerable by its partial reliance on the fruit of the uniquely poisoned tree of which all of you following the case should be well aware, and about which those of you who have not might want to read.” (Jon Neiditz, “No Harm, Big Foul: Why Yesterday’s LabMD Decision Is Stunning And Important,” Big Data Tech Law Blog, 11/14/15)

Big Data Tech Law: “Yesterday’s Decision Is Also Important In … Its Examination In Detail Of The Remarkably Weak Evidence Of Harm Put Forth By The Government And All Of Its Experts.” “Yesterday’s decision is also important to future FTC actions and to data breach litigation more generally in its examination in detail of the remarkably weak evidence of harm put forth by the government and all of its experts.” (Jon Neiditz, “No Harm, Big Foul: Why Yesterday’s LabMD Decision Is Stunning And Important,” Big Data Tech Law Blog, 11/14/15)

Big Data Tech Law: “The Words ‘Speculation’ And ‘Speculative’ Appear Seventeen Times In The Decision, Usually In Judgments About The Quality Of The FTC’s Case And Of The Testimony Of Its Experts.” “The words “speculation” and “speculative” appear seventeen times in the decision, usually in judgments about the quality of the FTC’s case and of the testimony of its experts, and we might expect it to echo through many responses to FTC accusations and data breach disputes in the coming years.”(Jon Neiditz, “No Harm, Big Foul: Why Yesterday’s LabMD Decision Is Stunning And Important,” Big Data Tech Law Blog, 11/14/15)

 

The Ruling Could Help Protect Other Small Businesses From Future FTC Abuses

“The Decision Sends A Message That Data Security Cases Against The FTC Can Be Won.” “The decision sends a message that data security cases against the FTC can be won, said James Harvey, who co-chairs the cyber security practice at Alston & Bird LLP.” (Joel Schectman, “U.S. Regulatory Agency Loses First Data Security,” Reuters, 11/16/15)

Big Data Tech Law: “[T]he ALJ’s ruling … Has To Be Celebrated As An Act Of Judicial Independence In Our Still-Wonderful Rule Of Law.” “Thus the FTC ALJ’s ruling to the FTC against the FTC on the basis that the FTC’s Complaint Counsel failed to prove its case on the merits — without even reaching LabMD’s affirmative defenses — has to be celebrated as an act of judicial independence in our still-wonderful rule of law, even though or perhaps because it came on the same day as the news from Paris made us wonder about what Life has in store.” (Jon Neiditz, “No Harm, Big Foul: Why Yesterday’s LabMD Decision Is Stunning And Important,” Big Data Tech Law Blog, 11/14/15)

James Harvey Co-Chair Of The Cyber Security Firm Alston & Bird LLP: “Defendants Are Going To Be Very Aware That The FTC Is Not Invincible.” (Joel Schectman, “U.S. Regulatory Agency Loses First Data Security,” Reuters, 11/16/15)

SC Magazine: “A Ruling That Could Reshape Future Federal Trade Commission (FTC) Enforcement Authority.” (Teri Robinson, “Administrative Judge Dismisses FTC Case Against LabMD,” SC Magazine, 11/16/15)