close X

Search Results for: IRS

USAID Adopts CoA Institute’s Proposals in New FOIA Regulations

December 22, 2016 by

The U.S. Agency for International Development (“USAID”) finalized new Freedom of Information Act (“FOIA”) regulations today, accepting two revisions proposed by Cause of Action Institute (“CoA Institute”) in a comment submitted in October 2016.

CoA Institute had made two recommendations in response to USAID’s proposed rulemaking.  First, we urged the agency to remove outdated “organized and operated” language from its definition of a “representative of the news media.”  Such language was used in the past to deny fee waivers to organizations like CoA Institute that investigate potential agency wrongdoing.  For example, we had to take the Federal Trade Commission all the way to the D.C. Circuit to get the agency to acknowledge that the agency’s FOIA fee regulations were outdated and that it was improperly denying us a fee reduction.

In deciding the case, the D.C. Circuit issued a landmark decision clarifying proper fee category definitions and the application of fees in FOIA cases.  CoA Institute cited this case to USAID in its comment and the agency took heed of the current case law, removing the outdated language from its regulations.

CoA Institute also recommended revising the procedures for conducting consultations.  Consultation takes place whenever USAID locates records that might have originated with or implicate the equities of another government entity.  The process is supposed to ensure that exempt material is properly redacted from records prior to disclosure.  We were concerned that USAID had failed to set parameters for determining when consultation were appropriate.  We also asked USAID to adopt a requirement to notify requesters whenever their requests are subject to consultation and to tell requesters which agency is being consulted.

USAID responded favorably to these recommendations.  It adopted our proposed limitation of consultation to instances where another agency or component has a “substantial interest” in responsive records.  Further, the agency accepted our proposed notification requirement.  The agency failed, however, to adopt our definition of “substantial interest.”  This failure leaves room for future improvement in USAID’s FOIA regulations, as it is unclear how USAID will interpret this term.

CoA Institute’s successful comment is just another small step in our efforts to provide effective and transparent oversight of the administrative state.

Filed Under: FOIA, Blog

New Law Set to Clarify and Strengthen Authority of IGs to Access Agency Records

December 19, 2016 by

This month, the U.S. Senate voted by unanimous consent to pass the Inspector General Empowerment Act of 2016, which originated in the House of Representatives and was sponsored by Representative Jason Chaffetz (R-UT), Chairman of the Committee on Oversight and Government Reform, and Senator Chuck Grassley (R-IA).  The bill now heads to the President’s desk, where it should be signed into law.

The IG Empowerment Act is an important step in strengthening the power and independence of the official “watchdogs” of the administrative state.  The main thrust of the legislation is to reinforce the power of IGs to access any agency records necessary for their oversight efforts.  This is seen as necessary to bypass the roadblocks to accessing records set up by many agencies—including the Department of Justice, Peace Corps, Department of Commerce, Treasury, and EPA—over the past six years.  The Obama Administration’s efforts to prevent IGs from carrying out their statutory duty to combat waste and fraud found their apogee in a July 2015 memorandum circulated by DOJ’s Office of Legal Counsel, which was strongly condemned by the IG community.  That legal opinion is now superseded by statute.

The recently passed bill also modifies the operation and reporting obligations of the Council of the Inspectors General on Integrity and Efficiency—or CIGIE—the independent entity within the government composed of all the IGs.  Additionally, the IG Empowerment Act clarifies when agencies and whistleblowers are authorized to disclosure sensitive information to their IG.

According to a recent congressional report, the obstructions faced by IGs, and the more than 15,000 recommendations that have been unimplemented by their agencies, have cost taxpayers $87 billion in lost savings.  While the IG Empowerment Act will likely improve the effectiveness and integrity of the Executive Branch, and save taxpayers a great deal of money, there is still room for improvement.  For example, the new bill fails to address the lack of subpoena power needed to compel testimony from federal employees and contractors, especially in instances where an agency refuses to cooperate with an IG’s ongoing investigation.

Congress should also take further steps to resolve the perineal problem of IG vacancies.  While the new bill requires the Comptroller General, who leads the Government Accountability Office, to examine the effect of these long-vacant posts, additional pressure could be placed on the White House to nominate new IGs and the Senate to confirm them.  For example, the Department of Commerce just received a new IG, and President Obama also announced the nomination of the first-ever IG for the National Security Agency, but too many empty spots remain.  According to CIGIE, nine presidentially-appointed, Senate-confirmed IG positions are empty.  The Project on Government Oversight calculates that the Department of Interior IG position has been vacant for over 2,800 days.  This is unacceptable.

Organizations like Cause of Action Institute remain committed to public oversight, but their tools are limited.  IGs are in a unique position to work with non-governmental actors and Congress alike to hold the Executive Branch accountable.  Efforts to strengthen the position and authority of IGs should therefore be seen as bolstering open and transparent government.  The IG Empowerment Act is one such effort.  In the its new session under President Trump, Congress ought to consider additional ones.

Filed Under: Blog, Media Tagged With:

Is Sec. Perez Campaigning on the Taxpayer’s Dime?

December 15, 2016 by

Washington D.C. – Cause of Action Institute (“CoA Institute”) today sent a Freedom of Information Act (“FOIA”) request to the U.S. Department of Labor investigating whether recent outreach by Secretary Tom Perez to voting members of the Democratic National Committee (“DNC”) regarding his political future could be in violation of the Hatch Act. The Hatch Act explicitly prohibits federal employees from using their official authority for the purpose of affecting the results of an election.

Secretary Perez reportedly emailed DNC party chairs Wednesday morning and asked them to join him on a conference call this afternoon. During that call Sec. Perez announced his candidacy for DNC Chairman. Such outreach raises the possibility that Perez may be attempting to advance his political campaign while serving in his current government role.

Following the conference call, CoA Institute requested all communications surrounding this outreach to better understand whether Sec. Perez has used taxpayer resources, such as government issued computers, office space, mobile devices, staff, or email systems to promote his campaign.

CoA Institute Assistant Vice President Henry Kerner: “The law is clear: public officials paid by taxpayers cannot use their position to engage in political activities. The Obama administration’s unprecedented history of Hatch Act violations threatens to undermine this important protection. Americans have a right to know if Sec. Perez used taxpayer-funded resources to further his own political campaign.”

There have been three previous high-profile Hatch Act violations during the Obama administration. Just a few months ago in July of this year, Department of Housing and Urban Development Secretary Julian Castro was found to have violated the Hatch Act when he openly endorsed Hillary Clinton’s candidacy for president during a Yahoo News interview. Before that, in 2012, Secretary of Health and Human Services Kathleen Sebelius was also found to have violated the Hatch Act when she delivered the keynote speech at a gala calling on attendees to reelect President Obama. And prior to that, Secretary Perez’s predecessor at the Labor Department, Hilda Solis, resigned after word came out that she had solicited campaign contributions from a subordinate employee.

These were historic violations, as no Cabinet secretary in any prior administration had been found in violation of the Hatch Act since its enactment under Franklin Delano Roosevelt. Yet, neither Ms. Sebelius nor Mr. Castro suffered any consequences for these violations.

The full FOIA can be found here

 

Filed Under: Press Release, Media Tagged With: , ,

CoA Institute Challenges SEC’s Unlawful Expansion of Criminal Liability

December 12, 2016 by

Washington D.C. – Cause of Action Institute (CoA Institute) has filed an Amicus Curiae Brief in the First Circuit Court of Appeals challenging the District Court’s decision to defer to the U.S. Securities and Exchange Commission’s (SEC’s) interpretation of a law in a criminal case where that interpretation actually contradicts the text of the statute.

In May 2016, Richard Weed, a California-based attorney, was convicted on charges of conspiracy to commit securities fraud, which included a “pump-and-dump” scheme involving penny stocks. The government alleged that Mr. Weed performed legal work for two co-conspirators that enabled them to evade SEC stock registration requirements. Mr. Weed was sentenced to forty-eight months in prison.

The government’s case was premised on the fact that the co-conspirators were required to register the stock with the SEC. However, the stock at issue did not require registration under the Securities Act. The government conceded this point, but nevertheless argued that registration was required in accordance with the SEC’s interpretation of the law.

In its Amicus Brief, following a long line of judicial precedent, CoA Institute argued that Section 3(a)(9) of the Securities Act is unambiguous and should be construed as such, something the District Court of Massachusetts failed to do. More broadly, the Brief contends that federal agencies should not be able to administratively rewrite federal statutes to create new crimes that Congress never intended and then demand that the courts “defer” to the agency’s views on what the law prohibits or requires. Such a constitutionally dangerous practice violates the separation of powers and threatens individual liberty. The Amicus Brief argues that criminal statutes should be narrowly interpreted to protect citizens from arbitrary, overreaching prosecutions.

CoA Institute Counsel Patrick Massari: “The Constitution provides for the courts to have exclusive authority to interpret criminal laws passed by Congress. The SEC overstepped its authority by interpreting the law in a way that is directly contrary to the plain text of Section 3(a)(9). The unchecked power of the SEC and the administrative state harms individual liberty and threatens free market principles. CoA Institute is uniquely situated to assist the Court in reaching its decision because this case deals with the intersection of overcriminalization and administrative law.”

The full Amicus Brief can be found here.

Filed Under: Media, Press Release Tagged With:

If the Government Wants to Monitor Fishermen, the Government Should Pay

November 15, 2016 by

CoA Institute files opening brief in appeal of decision to force costs of at-sea monitors on struggling fishermen

Washington D.C. – Cause of Action Institute (CoA Institute) has filed its opening brief in an appeal of the district court’s decision that fishermen should be forced to pay for their own at-sea monitors. CoA Institute is representing New Hampshire fisherman David Goethel and a group of Northeast fishermen in the case against the U.S. Department of Commerce.

In July, the U.S. District Court for the District of New Hampshire dismissed the lawsuit, ruling that fishermen must pay out-of-pocket for the cost of those monitors. Cause of Action Institute is appealing the ruling. The opening brief, filed in the First Circuit Court of Appeals, states:

“The New England and Mid-Atlantic fishing industry is older than the Nation itself.  Today it creates thousands of jobs in countless fishing communities. The industry’s regulators, however, have embarked on a project that threatens its imminent destruction.  They have done so without statutory authority, defying the most elementary limits on federal agency power.  This Court should intervene to protect fishermen from agencies run amok.”

Current government regulations compel fishermen to carry “at-sea monitors” who live with the fishermen at sea, observe their activities, check their compliance with federal regulations, and file reports upon their return to dock.  Fishermen have accepted the presence of monitors for years, and the government has historically paid for them with money appropriated by Congress.

In early 2016, however, the Government claimed to have run out of money.  Its response was to enforce a new requirement — now, the fishermen must pay for the monitors themselves, at an estimated cost of more than $700 per trip.  Most fishermen cannot afford to do so, and will be forced to abandon their livelihoods.

If the Government wants third-party monitors to police fishing activity, the Government must also take responsibility for paying for them. The district court disagreed, holding that the Government’s power to regulate the fishing industry and place monitors includes the much broader power to extract money from regulated parties when congressional appropriations run short.

The brief states:

“Such reasoning represents an unprecedented expansion of agencies’ implied powers, with implications stretching far beyond the agencies involved in this case. Contrary to the district court’s reasoning, the bedrock of administrative law is that federal agencies are limited to congressionally-delegated powers and congressionally-appropriated funds.  If they lack statutory authority or appropriated funds, they have no power to act.  They may not coerce their regulated industries to provide the funding that Congress has declined to grant.  This Court should reaffirm that principle and reverse the district court.”

For more information about the case, visit our website.

Filed Under: Press Release, Media

The Government Should Not Use Americans’ Confidential Tax Information to Sell ObamaCare

November 7, 2016 by

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) and requested two separate Inspector General (IG) investigations after details emerged about the federal government using confidential taxpayer information to market ObamaCare to individuals who have opted out of the program.

CoA Institute Assistant Vice President Henry Kerner: “Information obtained from tax returns should not be used to sell health insurance. The federal government is obligated to protect the confidentiality of tax returns. Instead, the Obama administration appears to be mining Americans’ tax returns to advertise and sell ObamaCare to people who don’t want it.”

A fact sheet released by CMS titled “Strengthening the Marketplace by Covering Young Adults” highlights CMS’s plan to boost ObamaCare enrollment by using taxpayer information. According to the fact sheet, “[f]or the first time this fall, we will conduct outreach to individuals and families who paid the fee for being uninsured, or claimed an exemption from that fee, for 2015.”  The law allows for personal tax information to be used only for the limited purpose of determining ObamaCare subsidy eligibility. It does not, however, permit CMS to market subsidies to taxpayers who have already rejected ObamaCare.

The potential disclosure of protected taxpayer information by the IRS raises concerns about whether the information is being appropriately safeguarded. To that end, CoA Institute sent requests for investigation to the Inspectors General of the Department of Justice (DOJ) and the Department of Health & Human Services (HHS).

In its FOIA request, CoA Institute requested all records related to the use of taxpayer information by CMS to contact individuals who paid the penalty for being uninsured in 2015, as well as all records relating to the June 2016 CMS report on how to enroll more young adults.

The FOIA to CMS is available HERE

The HHS IG request for investigation is available HERE

The DOJ IG request for investigation is available HERE

Filed Under: Press Release, Media Tagged With:

CoA Institute Sues Treasury for “Sensitive” Records Concealed from Public Disclosure

November 1, 2016 by

Washington D.C. – Cause of Action Institute (CoA Institute) today filed a lawsuit to compel production of records from the U.S. Department of Treasury dealing with the agency’s “sensitive review” policy. These policies often delay open records requests through the Freedom of Information Act (FOIA), particularly when such productions contain politically sensitive or potentially embarrassing information, directly contrary to congressional policy.

To better understand the Treasury Department’s sensitive review procedures, who is involved, and how it is used, CoA Institute submitted a FOIA request to the agency in June 2013 seeking records relating to its FOIA process.

CoA Institute Vice President John Vecchione: “It’s ironic that our FOIA to learn more about sensitive review has itself been held up because of sensitive review. Even after the Department of Treasury agreed through mediation last year to start producing responsive records, it has failed to produce a single document. Agencies have utilized opaque sensitive review processes to delay records requests, adding months and even years to an agency’s response time. The public has a right to information about how agencies obstruct and delay open records requests that may reveal politically embarrassing information.”

According to information obtained from various agency inspectors general, similar sensitive review policies have been used at the Department of Homeland Security, Department of Interior, Department of Commerce, Department of Agriculture, Department of Health and Human Services, Department of Housing and Urban Development, and the Department of Veterans Affairs. At some agencies, sensitive review is applied not only to information the agency’s management considers sensitive, but also to any FOIA request from a representative of the news media, like CoA Institute, or where the request is likely to attract media or political attention.

Sensitive review often is conducted by political appointees—and sometimes by the Office of the White House Counsel—rather than by career FOIA professionals. These appointees sometimes required staff to find and provide information about requesters that FOIA does not require requestors to provide, such as where the requestors live, who they work for, and whether their employer is politically active or part of the news media.

The full complaint can be accessed HERE
All exhibits can be accessed HERE

 

 

Filed Under: Media, Press Release Tagged With: , , ,