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CoA Institute Criticizes the Presidio Trust on Flawed FOIA Rule

March 6, 2018 by

Cause of Action Institute (“CoA Institute”) submitted a comment today to the Presidio Trust concerning the agency’s publication of a flawed FOIA rule intended to revise the agency’s Freedom of Information Act (“FOIA”) regulations. Congress created the Presidio Trust in 1996 to oversee and manage interior lands of The Presido, a national park on the northern tip of the San Francisco Peninsula, which is part of the Golden Gate National Recreation Area. Specifically, CoA Institute explained that the Trust’s flawed FOIA rule fails to correct its definition of a “representative of the news media” in line with statutory and judicial authorities.

News Media Fee Category

The Presidio Trust’s proposed rule marks the agency’s first effort to update its fee provisions in roughly twenty years.  Yet despite ample time to review recent legal developments, and notwithstanding the Trust’s reliance on the Department of Justice template for agency FOIA regulations, which correctly advise agencies to eliminate the so-called “organized and operated” standard from their definition of a “representative of the news media,” the Trust still missed an important deficiency in its rulemaking.

The “organized and operated” standard, which the Presidio Trust has improperly retained, has been used in the past to deny news media requester status to nascent media groups and government watchdog organizations like CoA Institute.  Indeed, CoA Institute took another agency—the Federal Trade Commission—to court, and argued its case all to the way to the D.C. Circuit, just to get the agency to acknowledge that its similar retention of the “organized and operated” standard was unlawful and led to improperly denying CoA Institute a fee reduction.  The D.C. Circuit eventually issued a landmark decision in CoA Institute’s favor to clarify proper fee category definitions and their application in FOIA cases.

CoA Institute has succeeded in convincing a number of other agencies to adopt a proper definition of “representative of the news media” in line with the FOIA statute and controlling case law.  Those agencies include, among others, the Consumer Product Safety Commission, Office of the Special Counsel, Department of Defense, U.S. Agency for International Development, and Department of Homeland Security.  We hope that the Presidio Trust will likewise revisit its flawed FOIA rule and eliminate the “organized and operated” standard in lieu of a proper definition of a news media requester.

Ryan Mulvey is Counsel at Cause of Action Institute

Filed Under: Media, Blog Tagged With: , ,

VA Travel Fraud Shows Even Reformers Can Misuse Government Power

February 22, 2018 by

There is little doubt that recent reforms at the Department of Veterans Affairs represent remarkable progress.  Last year saw the appointment of a new head for the agency, David Shulkin, and the passage of legislation giving him the power to start implementing badly-needed changes.  It was a lesson in how persistence can eventually lead to progress, and we recently highlighted it in the Washington Examiner as an overlooked bipartisan success.  Unfortunately, Shulkin is now reminding us of a different lesson: even those who champion reform may misuse government power once they have it.

A new inspector general report documents how Shulkin and his direct subordinates improperly turned a simple business trip in July of last year into a lengthy vacation.  Gifts were inappropriately accepted, government employees were used to plan private excursions, and an e-mail was even faked to justify flying Shulkin’s wife to Europe with him.

The saddest part is this occurred just after Shulkin visited the White House to celebrate the signing of legislation which allowed him to more easily fire VA employees for wrongdoing.  Yet instead of ending VA misconduct, Shulkin was on his way to becoming an example of it as he flew to England to attend a sold-out tennis match at Wimbledon with his wife at no cost to either of them.  She had officially been flown out to watch her husband receive “special recognition” at a dinner, a fiction created by Shulkin’s chief of staff to have $4,000 in airfare covered by taxpayers.  The Wimbledon tickets were from an acquaintance whose employer holds several government contracts.

In the days before the report was issued, Shulkin and his attorney had mounted an aggressive defense of his actions.  That tone changed significantly once the report became public, with Shulkin acknowledging how bad the behavior looked and White House officials saying off the record that Shulkin had been deceptive about the seriousness of the charges.  Yet his willingness to accept responsibility was only partial, as he blamed political appointees for targeting him and suggested that e-mails proving expense fraud by his chief of staff were the result of hacking.

The improbable hacking charge may never amount to much, as the chief of staff retired rather than face punishment.  And while e-mails have shown that Shulkin is indeed being pursued by political appointees in his agency, that does not excuse the fraudulent behavior of his staff.  If anything, the knowledge that rivals are looking to undermine you should be another reason to ensure your office behaves ethically.

The VA is not an easy place to lead, and Shulkin has been a consistent advocate for reform.  But that reform will only stick if he can make sure his own subordinates maintain the standards of behavior that he champions for the VA as a whole.  The agency has long suffered from low morale, as years of unaccountability and understaffing have led to dissatisfied veterans and endless frustration for competent employees.  It will be that much harder to change this environment if the top official is excusing ethical lapses instead of preventing them.

The latest reports indicate that Shulkin will remain in his position despite what happened.  He must now focus on using the powers given him by last year’s reform bill to ensure the VA is a place where this kind of behavior is no longer tolerated.

John McGlothlin is counsel at Cause of Action Institute

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Regulation Czar Neomi Rao Discusses Deregulatory Agenda

February 13, 2018 by

In his State of the Union address last month, President Donald J. Trump patted himself on the back for the economic boom and the steady drop in unemployment over the past year. Many economists agree that he ought to take some credit, and suggest his deregulatory push has played a role. To discuss the Trump administration’s regulatory achievements, Neomi Rao, the president’s appointee for administrator of the Office of Information and Regulatory Affairs (“OIRA”) last week joined the Federalist Society’s Free Lunch Podcast.

Last year was “a banner year for regulatory reform,” Rao said in the beginning of the podcast.

When Trump took office, he signed Executive Order 13771, ordering agencies to eliminate two regulations for every new regulation added. It also capped the net cost of new regulations to zero dollars. This means that for every new dollar in regulatory costs, one offsetting dollar had to be cut from regulatory costs elsewhere.

Rao said that the administration lived up to Trump’s campaign promise – and then some. For every new regulation added, 22 regulatory actions were cut, which she said far exceeded his promise. Additionally, the net savings for Americans on regulations was $8 billion, also exceeding his promise. The administration also halted 1500 new rules proposed under the previous administration because, Rao said, it wants to analyze the scope and content of all regulations.

But more important than these small changes, according to Rao, the administration is striving to make structural and cultural reform, which would hopefully extend into future administrations. “We want to continue with the momentum from the past year and with the success that we had,” she said.

For example, Rao indicated that agencies must properly follow the Congressional Review Act (“CRA”), which Rao claims requires them to submit proposed regulations to OIRA, so it can determine whether it imposes a cost of $100 million or more. If it does, then OIRA sends the proposed regulation to Congress for approval. Agencies that don’t comply, she said, risk some of their rules losing legitimacy.

As Cause of Action Institute has pointed out over the past year, there are hundreds of rules that are currently vulnerable to be repealed under the CRA that have yet to be received by Congress. For example, last month Cause of Action Institute released an investigative report revealing the IRS has dodged compliance with the CRA and other oversight mechanisms by suggesting that its rules have no economic impact, a suggestion that we have argued is false and intended to shield the agency’s actions from oversight.

Apart from the economic effect of excess regulations, Rao said OIRA is working to make sure the government is more respectful of the separation of powers and more transparent. Because only Congress has the power to make laws, Rao said it can be dangerous to increase the power of the executive branch to the extent that it is making a lot of rule changes. To improve transparency, OIRA will ensure that agencies comply with a federal law that requires they give public notices of new rules and regulations so that the public and stakeholders have an opportunity to voice their support or opposition. Additionally, Rao said OIRA will be working to reduce paperwork for businesses to save them cost and time.

The Trump administration has made progress in the past year to cut regulatory red tape. Hopefully the administration can continue going in this direction with a series of structural changes to scale back the administrative state.

Tyler Arnold is a communications associate at Cause of Action Institute.

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An overlooked bipartisan success story in 2017: VA reform

February 6, 2018 by

An overlooked bipartisan success story in 2017: VA reform

by John McGlothin | 
From the Grammy Awards to the Pro Bowl, it is an American tradition to start the new year by celebrating last year’s successes. These celebrations may seem indulgent, but they serve a purpose: to remind us about achievements that might otherwise be forgotten. Just like sports or entertainment, the end of the year dominated headlines when it came to what Congress accomplished (or didn’t) in 2017.
The push to pass tax cuts was hectic and eventful, with even Republicans saying a major legislative victory was needed after several attempts to repeal Obamacare failed. Yet there was another legislative victory in 2017, one at least as impressive as tax cuts in almost every way: reform at the U.S. Department of Veterans Affairs. The bill may have passed in another era — last June — but it should not be forgotten.
Filed Under: News, Media Tagged With: , , ,

Records show Richard Cordray scrambled in final days to name successor, thwart Trump’s nominee

January 31, 2018 by

The last-ditch coup by Richard Cordray was orchestrated despite apparent pushback from CFPB’s top attorney

Cause of Action Institute (“CoA Institute”) has uncovered documents that reveal Richard Cordray and his lieutenants, in Cordray’s last days as director of the Consumer Financial Protection Bureau (“CFPB”), scrambled to plan a gambit to usurp the president’s appointment authority and allow Cordray to name his own successor.

Cordray announced on November 15, 2017 that he would be stepping down as director of the CFPB, presumably to run for governor of Ohio.  Later that same day, the president announced his intention to appoint an acting director until a new director could be nominated and approved by the Senate.  Here’s where things get interesting.  On November 24, 2017, Cordray named the agency’s chief of staff, Leandra English, as the deputy director of the CFPB.  Then, he announced his resignation and tapped English as the acting director.

President Trump ignored this attempted unlawful action and appointed his own acting director, Mick Mulvaney.  Then the next day, the general counsel of the CFPB issued an opinion supporting the president and holding Mulvaney as the acting director.

Accordingly, as General Counsel for the Bureau, it is my legal opinion that the President possesses the authority to designate an Acting Director for the Bureau under the FVRA, notwithstanding § 5491(b)(5).

English, however, refused to back down, creating the absurd situation where a government agency had two people claiming to be acting director.  She sued in federal court, asking Judge Timothy Keller to make her acting director.  The court, however, denied her request, holding that “[d]enying the president’s authority to appoint Mr. Mulvaney raises significant constitutional questions.”  The agency, relying both on the opinion of its general counsel and the court’s decision, has recognized Mulvaney as the leader.  The Court case continues.  What follows is the result of CoA Institute’s investigation into the final weeks of Cordray’s tenure as director.

Internal CFPB communications reveal that on November 15, the date Richard Cordray announced his intent to retire, English forwarded Cordray a Politico Pro email that contained a report of the president’s intention to appoint an acting director.  A number of top CFPB employees were CC’d on this email, including General Counsel Mary McLeod.

The next substantial action came on November 22, when “RC” (presumably Richard Cordray) circulated an article from creditslips.com that outlines a legal argument for Cordray to appoint his own successor. Just two minutes later, Cordray sent another article from theintercept.com which, relying on the creditslips.com article, posits that David Silberman, then acting deputy director, should succeed Cordray.  The article notes “[t]he legal argument that Silberman would become interim director would be greatly improved if Cordray officially named him deputy director[.]”  CC’d on both these emails is General Counsel McLeod.  The full subject of Cordray’s email includes the line: “Mary [McLeod], need you to have people consider it further please[.]”

On the day of the formal resignation, November 24, documents revealed a scramble inside CPFB to properly time the gambit.  In an email thread titled “Possible presser” sent between Zixta Martinez, associate director for external affairs, Jennifer Howard, assistant director for communications, Kate Fulton, deputy chief of staff,[1] Cordray, and English, the group appears to discuss a document that is distinct from Cordray’s formal resignation announcement.  The group is concerned about the resignation going out before this “presser” document which, presumably, was the announcement of Leandra English as deputy director.

Later that day, in Cordray’s final letter to the staff, he made public his intention to name Leandra English as deputy director and his self-proclaimed successor.  The email below reveals that the agency wanted to wait until virtually the last minute to put this all into process.

Cordray’s team grappled with when, and in what order, to update the website.

And, finally, discussion of the order of the email to staff and the resignation letter.

English confirms:

The general counsel, Mary McLeod, was obviously aware that this is all going on, given that she was CC’d on virtually all of these emails, including the one above.  Yet, in the biggest blow to Cordray’s gambit, General Counsel McLeod sends a letter memo to the CFPB Leadership Team the very next day, November 25, with a concrete conclusion:

I advise all Bureau personnel to act consistently with the understanding that Director Mulvaney is the Acting Director of the CFPB . . . . Accordingly, as General Counsel for the Bureau, it is my legal opinion that the President possesses the authority to designate an Acting Director for the Bureau under the FVRA, notwithstanding § 5491(b)(5).

Elsewhere in her letter, McLeod states, “[t]his confirms my oral advice to the Senior Leadership team[.]”  Oral advice that the team ignored when they tried to install English.

To make matters worse, English continued to send emails claiming to be the Acting Director.  The first came in an email to the Senior Leadership Team, which included the General Counsel.

She made the same claim in an email to the staff of Senator Elizabeth Warren:

And finally in a staff-wide email.

This brazen attempt to commandeer an entire agency threatens the Constitutional Order.  Were Richard Cordray and Leandra English successful, they would have essentially created an agency that fell outside of any of the three branches of government.  As D.C. Circuit Court of Appeals Judge Brett Kavanaugh stated, the Director of the CFPB holds “enormous power over American business, American consumers, and the overall U.S. economy. [ ] The Director alone decides what rules to issue; how to enforce, when to enforce, and against whom to enforce the law[.]”[3]  Judge Kavanaugh concluded, “the Director enjoys more unilateral authority than any other officer in any of the three branches of the U.S. Government, other than the President.”[4]  Deciding who wields such awesome power should not happen in a series of harried emails between bureaucrats.  It should be decided by the President[5] and, when a permanent successor is ultimately named, the Senate confirmation process.[6]

Eric Bolinder is counsel at Cause of Action Institute.

 

[1] According to LinkedIn.

[3] PHH Corp v. Consumer Fin. Prot. Bureau, 839 F.3d 1, 7 (D.C. Cir. 2016), vacated and granted en banc review, Feb. 16, 2017.  The D.C. Circuit granted en banc review for this case, which automatically vacates Judge Kavanaugh’s opinion.  A decision is still pending.

[4] Id.

[5] See U.S. Const. art. II, § 3, cl. 2. (the Appointments Clause).

[6] This author would like to note he agrees with Judge Kavanaugh that the overall structure of the CFPB is unconstitutional, regardless of who appoints the Director.

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Commercial Speech Doctrine Needs an Overhaul

January 30, 2018 by

Cause of Action Institute joined with the Cato Institute and Competitive Enterprise Institute in filing an amicus brief urging the U.S. Supreme Court to grant the petition for certiorari in CTIA v. City of Berkeley.  The commercial speech case involves an ordinance in Berkeley, California requiring cell phone retailers to make the following statement to their customers:

The City of Berkeley requires that you be provided the following notice:

To assure safety, the Federal Government requires that cell phones meet radio frequency (RF) exposure guidelines.  If you carry or use your phone in a pants or shirt pocket or tucked into a bra when the phone is ON and connected to a wireless network, you may exceed the federal guidelines for exposure to RF radiation.  Refer to the instructions in your phone or user manual for information about how to use your phone safely.[1]

The problem is that it is not entirely clear whether the harm described in this statement is actually true.  The current First Amendment commercial speech doctrine allows governments to compel commercial speech that is both “purely factual” and “uncontroversial.”[2]

The standard of review by which courts determine whether a particular compelled commercial statement meets this requirement can be the deciding factor in a case.  Take Berkeley, for example.  In this case, the record in the district court did “not offer[] any evidence that carrying a cell phone in a pocket is in fact unsafe.”[3]  That is, there is “no evidence in the record that the message conveyed by the ordinance is true.”[4]

Under any serious review of a governmental action impinging on a constitutional right—which compelled speech does—the absence of evidence to show that the government was indeed advancing a legitimate interest would be enough to strike down the ordinance.  But not in Berkeley.  The Ninth Circuit held that any “more than trivial” interest will suffice.[5]  No attention was paid to whether that interest, however trivial, is actually a legitimate one or if the compelled speech is advancing it.

The Supreme Court must step in

The commercial-speech doctrine is notoriously muddy.  Both Justice Thomas and Justice Ginsburg have recognized that the lower courts are in need of “guidance” on the “oft-recurring” and “important” subject of “state-mandated disclaimers.”[6]  And this guidance is necessary, the Justices wrote, because the Court has not “sufficiently clarified the nature and the quality of the evidence a State must present to show that the challenged legislation directly advances the governmental interest.”[7]

This lack of clarity has given rise to governments at various levels forcing commercial speakers to communicate disputed and politically charged statements, sometimes where the underlying factual issues are not resolved.  And lower courts are expanding government’s ability to commandeer commercial speaker’s message.  This contravenes the Constitution’s command that “Congress shall make no law” against free speech (incorporated against the states by the 14th Amendment).  This is precisely the type of behavior one would expect in a legal environment where the lines are not clear.

Commercial Speech Doctrine Must be Clear

The Supreme Court should grant the cert petition in Berkeley and ensure that moving forward when a government tries to compel commercial speech to carry the government’s message, the government must be able to, at a minimum, adduce evidence that (1) the purported harm actually exists, (2) mitigating that harm is a compelling government interest, (3) that the infringement on the speaker’s rights is narrowly tailored to advance that interest, and (4) that the compelled commercial speech actually does advance the interest.  We will continue to see doctrinal confusion and unnecessary compelled commercial speech absent that clarity, which should be avoided.

James Valvo is Counsel and Senior Policy Advisor at Cause of Action Institute.  You can follow him on Twitter @JamesValvo.

[1] Berkeley Municipal Code § 9.96.030(A).

[2] Zauderer v. Office of Disciplinary Counsel of Supreme Court of Ohio, 471 U.S. 626, 651 (1985).

[3] CTIA–The Wireless Ass’n v. City of Berkeley, California, 854 F.3d 1105, 1125 (9th Cir. 2017) (Friedland, J., dissenting in part).

[4] Id.

[5] Id. at 1117.

[6] Borgner v. Florida Bd. of Dentistry, 537 U.S. 1080 (2002) (Thomas, J., joined by Ginsburg, J., dissenting from denial of certiorari).

[7] Id.

Filed Under: Media, Blog, Filing Tagged With: , , ,

Politicizing FOIA review at the EPA and Interior

December 19, 2017 by

The Washington Post reported last week that “high-level officials” at the Environmental Protection Agency (“EPA”) and the Department of the Interior (“DOI”) have started to “keep closer tabs” on incoming Freedom of Information Act (“FOIA”) requests for records that may be embarrassing or politically damaging to the Trump Administration.  Whether by deliberately delaying responses or conducting pre-production review of responsive records, non-career officials have been accused of politicizing FOIA.

Politicizing FOIA is Not New

Although concern over the improper interference by political appointees in the administration of the FOIA is justified, the practice did not originate with President Trump.  For example, according to two DOI Inspector General reports—dated September 2015 and October 2010—political appointees at Interior have long been routinely made aware of “selected” FOIA requests, including those “currently in litigation” or concerning “high profile or sensitive matters.”  In some instances, requests (including those from news media requesters) were “considerably delayed . . . possibly due to political involvement.”  Moreover, the EPA Inspector General, in August 2015 and January 2011, reported that EPA regulations specifically permitted some political appointees—including the agency’s Chief FOIA Officer and the authorized disclosure official in the Administrator’s Office—to participate in approving requests and redacting records.

The Obama-era

The truth is that politicizing FOIA reached its zenith under the Obama Administration.  Despite a professed commitment to transparency, President Obama introduced the pernicious practice of “White House equities” and “sensitive review” procedures at various agencies, including the Department of Treasury, the Department of Housing and Urban Development, the EPA, the State Department, the Department of Veteran Affairs, the Department of Defense, and the Department of Homeland Security.  As part of “sensitive review,” non-career political appointees direct career FOIA staff to consult with them whenever a FOIA request could elicit media attention or potentially embarrass the White House.  It is more than a bit ironic that the Washington Post—which previously described the Obama Administration as “one of the most secretive” ever because of its historic “stonewalling or rejecting” of FOIA requests—would now forget, or least fail to mention, this long, bipartisan history of presidents abusing transparency laws to their advantage.

Of course, none of this means that the Trump Administration is adhering to best practices.  It stands to reason that FOIA politicization, and a lack of overall commitment to transparency, continues.  For example, “White House equities” review persists.  In July 2017, the General Services Administration released to CoA Institute a previously-secret White House memo detailing those procedures, thus suggesting they are still in place.  Although not directly related to the FOIA, the White House also appears to have interfered with how agencies respond to congressional oversight requests.  And, most recently, CoA Institute has investigated the National Oceanic and Atmospheric Administration’s practice of identifying “high visibility” FOIA requests, as well as its tracking of requests concerning the Trump “transition.”

The current Administration is not alone in politicizing FOIA.  Where political appointees are interfering with the disclosure of records, they are continuing a long tradition of obstructing the public’s right to access government information.  To turn the issue into a partisan one—of Trump versus the EPA #Resistance, of #DrainTheSwamp versus the “main stream” media—obscures the underlying problem and makes it more difficult to reach consensus on how to fix it.

Ryan P. Mulvey is Counsel at Cause of Action Institute.

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