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HARDI Announces Settlement with DOE in Regional Efficiency Standards Lawsuit

March 11, 2014 by

For Immediate Release

Contact:                                                                                                          

Whitney Neal, Digital Communications & PR Coordinator

wneal@hardinet.org

Jon Melchi, Director of Government Affairs

jmelchi@hardinet.org

 

HARDI Announces Settlement with DOE in Regional Efficiency Standards Lawsuit

Columbus, Ohio– Heating, Air-Conditioning and Refrigeration Distributors International (HARDI) announced today that it reached a settlement in the long-running lawsuit regarding Regional Efficiency Standards for residential gas furnaces and central air-conditioners which were finalized by the Department of Energy (DOE) in October 2011. Represented by government accountability group Cause of Action, HARDI agreed to a settlement, which would remand the efficiency standards for gas furnaces, forcing the DOE to restart the process for assessing efficiency standards and to do so in a more transparent manner.

The settlement, which will take effect upon judicial approval, signifies a victory for heating, ventilation, air-conditioning, and refrigeration distributors, who intervened in the lawsuit challenging the standards, citing DOE’s abuse of process in utilizing a regulatory procedure which ignored the input of distributors and other stakeholders.

Executive Director Dan Epstein of Cause of Action said:

“Due process in agency rulemaking exists to give all Americans a voice instead of merely relying upon the unelected elite.  The DOE effectively overruled the voices of American consumers and small businesses concerning energy efficiency standards, removing all accountability, which is why Cause of Action took up this case.  This settlement is a victory for thousands of businesses, consumers, and manufacturers as the DOE has agreed to a standard of transparency and accountability when creating new rules going forward.”

HARDI President Royce Henderson (Charles D. Jones Company) stated:

“Our goal from the start has been twofold. The first was to provide relief to our members who faced damages as a result of DOE’s actions. The second has been to fix the process, so this will never happen again. We believe this settlement accomplishes both goals to the greatest extent possible.”

Other terms of the settlement:

  • The increase and regionalization in the standards for central air-conditioners will remain, but the DOE has allowed for a “sell-through” period of 18-months and agreed to not-penalize HVACR distributors as part of the enforcement of the Regional Standard.
  • Additionally, the DOE has agreed to engage in a process to review the regulatory processes which established the regional efficiency standards.

The court document can be found here.

 

About HARDI:

Heating, Air-Conditioning and Refrigeration Distributors International (HARDI) represents more than 460 wholesale companies and 300 manufacturing associates as well as nearly 140 manufacturer representatives. HARDI members represent an estimated 85 percent of the dollar value of the HVACR products sold through distribution.

About Cause of Action:

Cause of Action a nonprofit, nonpartisan government accountability organization that investigates, exposes, and fights job-killing federal government regulations, waste, fraud, and cronyism.  Cause of Action, uses investigative, legal, and communications tools to educate the public on how transparency and accountability protects taxpayer interests and economic opportunity. For more information, visit www.causeofaction.org.

Filed Under: Press Release Tagged With:

The Fight for Truth, Transparency, and Accountability at the National Archives

February 19, 2014 by

For more than two years, Cause of Action has been fighting to gain public access to the Financial Crisis Inquiry Commission (FCIC) documents transferred without restriction in March 2011 by the National Archives and Records Administration (NARA) to the House Committee on Oversight and Government Reform (OGR). The FCIC was a temporary commission created in the legislative branch to investigate the causes of the financial crisis.  Today, Cause of Action advanced oral arguments in the United States Court of Appeals for the District of Columbia Circuit explaining NARA’s wrongful withholding of FCIC records.  NARA’s unsupported position is that these records are not subject to the Freedom of Information Act (FOIA), a position belied by both the facts and law of the case.

We submitted a FOIA to NARA in October 2011 for “all documents, including email communications, memoranda, draft reports and other relevant information and/or data contained in the records transfer of Financial Crisis Inquiry Commission documents stored at NARA to the Committee on Oversight and Government Reform at the U.S. House of Representatives.” A month later, NARA denied our request claiming that the records are not “agency records” and that the FCIC established a five-year restriction on public access to the records.

After our appeal of the FOIA response was denied, Cause of Action filed a lawsuit in August 2012 against NARA for wrongfully withholding records pertaining to the FCIC and claiming these records are not subject to FOIA. NARA filed a request for a dismissal of the case in the District Court for the District of Columbia, which was granted in March 2013. CoA filed a timely appeal In the United States Court of Appeals for the District of Columbia Circuit.

Congress did not address what would happen to FCIC records

We argue that because NARA has possession and complete control of the documents that contributed to the FCIC’s report on the 2008 financial crisis, those documents are subject to FOIA. NARA’s claim is that since the FCIC was a commission created by Congress, FCIC records are per se legislative branch records, which are not subject to FOIA. However, Section 5 of the 2009 Fraud Enforcement Recovery Act (FERA), which established the FCIC, did not address records preservation or dissemination at termination of the commission. Further, no other federal statute suggests that Congress intended to restrict access to these records under FOIA.  And the presumptive disclosure of documents and broad public access under FOIA is further support for the release to the American people of the FCIC records.

 Executive branch agency records are contained within the FCIC records

Cause of Action submitted a March 2, 2011 letter from NARA to OGR to further explain our arguments in an opposition we filed January 24, 2014 in the United States Court of Appeals for the D.C. Circuit. NARA’s letter to OGR is a response to a February 18, 2011 letter from Chairman Darrell Issa requesting records from the Financial Crisis Inquiry Commission (FCIC).

  • The letter reveals that:
  1. NARA knowingly possessed executive agency records as a releasable subset of the FCIC records, and these records were disclosed to OGR by NARA without restrictions of any kind.
  2. NARA specifically contemplated that the records were subject to FOIA.

An FCIC staffer crossed out FOIA language in a transfer form given to NARA

The transfer of the FCIC records to NARA included a transfer letter and Standard Form 258 (SF-258), where the FOIA language was crossed out by hand by a staffer for FCIC Chairman Phil Angelides.  From our opening brief:

“Rather than enumerate a specific FOIA exemption or other legal basis for his desire to restrict public access to the FCIC records, Mr. Angelides, by proxy, crossed out by hand the mandatory FOIA language from the Standard Agreement, and authored an aspirational letter that carries no legal effect. Specifically, his letter “recommended” that NARA restrict access to the records, and “encouraged” the Archivist to carry out these recommendations. Despite Mr. Angelides’s best laid hopes, he cited no legal authority for restricting access.”

Normal NARA transfer letter

Normal transfer letter which states in first paragraph: “The transferring agency certifies that any restrictions on the use of these records are in conformance with the requirements of 5 U.S.C. 552 [FOIA].”

 Transfer Letter Normal

NARA Transfer letter with FOIA crossed out by FCIC staffer

The transfer letter from FCIC to NARA with the section related to FOIA crossed out by a proxy for FCIC Chairman Phil Angelides (highlight added by author).

Doctored Transfer Letter

Legislative Branch files amicus brief against transparency

The Executive and Judicial branches have made it clear that they want to keep the public in the dark on the financial crisis, but in November the legislative branch joined them in opposing transparency. The Bipartisan Legal  Advisory Group (BLAG) made a highly unusual move by filing an amicus brief in support of NARA’s effort to shield the American public from knowing the truth about the financial crisis.  BLAG consists of the five members of House leadership, and was last deployed to defend the Defense of Marriage Act (DOMA) by a 3-2 vote in March 2011.

NJI_CoA_Denied_FB

It is our firm belief that American taxpayers deserve to know what information contributed to the FCIC’s findings on the financial crisis. The “most transparent administration in history” should live up to its promise and release the FCIC records.  After all, the American people paid for the FCIC documents and should be granted full access.

Find all of the court filings for this case here.

Filed Under: Blog Tagged With: ,

Roll Call: FTC’s Data Security Grab Is Adjudication without Authority

February 18, 2014 by

Cause of Action’s Dan Epstein writes in Roll Call:

What happens when a government agency adjudicates without authority, assuming Congress will simply provide forgiveness, rather than ask for permission? That is the question that is being asked this week after the Federal Trade Commission petitioned Congress for powers it does not currently have regarding data breaches and cybersecurity while already exercising the very powers they seek.

During a Senate Judiciary Committee hearing on combatting cybercrime, the FTC asked for the authority to regulate data security. By stating, “Under current laws, the FTC only has the authority to seek civil penalties for data security violations involving companies that fail to protect children’s information provided online,” the FTC is admitting it does not currently have the authority to regulate data security.

This wasn’t the first time the FTC asked Congress for such authority. Since 2000, the FTC has sought authority from Congress to regulate data security, admitting it “lacks the authority to require firms to adopt information practice policies.” Despite the FTC’s repeated requests that Congress confer upon it the authority to regulate data security, Congress has refused to grant it.

The FTC is walking a fine, and troubling, line. While using big names like Target and Wyndham to pressure Congress to grant them greater power, the FTC has aggressively gone after small companies that have fallen victim to data thieves, all the while claiming it has such authority.

One such victim is a small medical laboratory in Georgia called LabMD that provides doctors with cancer-detection services. In 2008, a company backed by a federally funded researcher took a patient-information file without LabMD’s knowledge or consent. The company then contacted LabMD, advised the company that it had taken its property, and offered a contract for Internet security services. LabMD declined the services and the company turned the information over to the FTC. After a three-year-long invasive and expensive investigation, the FTC filed a complaint last year alleging that LabMD’s data-security practices violated rules it refused to specify.

Despite the fact that Congress specifically gave the Department of Health and Human Services the sole authority to regulate patient-information data security, which has never accused LabMD of any violation, the FTC has decided to step in and pretend it has the authority it told Congress this week it does not have.

The commission has attempted to get around its lack of authority by claiming in court filings that it has the authority to create “common law” which basically means it can make it up as it goes. However in its statements this week to Congress, it contradicts this very position.

Additionally, while waging aggressive efforts against LabMD, the FTC declined to look into the concerning and well-documented data breaches that have occurred related to Obamacare. In December, Cause of Action filed a Freedom of Information Act request seeking records about FTC investigations into consumer breaches by navigators and health exchanges.

Last week, the FTC informed us, by being unable to produce any relevant documents, that it did not investigate such data security issues including the recent breach by MNSure where the state’s Office of the Legislative Auditor said “slack internal procedures at the new health insurance exchange agency ‘contributed directly’ to the disclosure.”

The FTC is trying to have it both ways — on one hand using Target and Wyndham as opportunities to pressure Congress for authority while on the other hand going after small businesses without that authority because they have too few resources to fight back.

Operating outside the bounds of law should never be tolerated — whether it is snooping data thieves or large government agencies. Until the FTC backs away from its battle against LabMD or until Congress grants it the authority to launch such investigations, the truth is simple — it is operating outside the law.

Filed Under: News Tagged With:

The Hill: The politics of targeting

February 7, 2014 by

Cause of Action’s Dan Epstein writes in The Hill:

In the wake of the IRS political targeting scandal, Congress missed two opportunities for strategic investigating: First, Congress never “specially authorized” a committee with investigative authority over the IRS’s inappropriate treatment of certain groups seeking tax-exempt status; Second, Congress never appointed a special counsel to investigate the IRS, nor hired an outside counsel to advise it in its investigations.

But on January 8, 2014, Rep. Darrell Issa (R-Calif.), the chairman of the Committee on Oversight and Government Reform, and Rep. Jim Jordan (R-Ohio), the chairman of the Oversight subcommittee on Regulatory Affairs, Stimulus Oversight and Government Spending, chastised Attorney General Eric Holder for the appointment of Barbara Bosserman, a career attorney supposedly “leading the DOJ/FBI investigation” into the IRS.

The Oversight Committee didn’t disclose that Bosserman was employed at the Justice Department (DOJ) in 2004 and 2008 when she made her political contributions to the Democratic National Committee.  It is obvious Bosserman was not hired into the DOJ because of her support for the administration and has been a committed Democrat long before a potential conflict could arise between her activities and the work she is assigned.

If DOJ assigned a non-political appointee attorney on a matter because of her political contributions, then Chairmen Issa and Jordan should be raising Hatch Act concerns and potential questions concerning prohibited personnel practices.  Yet Issa and Jordan’s letter to DOJ Attorney General Holder was only carbon copied to DOJ Inspector General Michael Horowitz, not the Office of Special Counsel, who would be responsible for investigating prohibited personnel practices and Hatch Act concerns.

Furthermore, if it is true that Bosserman was assigned to the matter for political reasons, then the DOJ would be subjecting itself to enormous risk by admitting to having knowingly violated the law in publicly stating that “removing a career employee from an investigation or case due to political affiliation, as Chairmen Issa and Jordan have requested, could also violate the equal opportunity policy and the law.”

But that conclusion seems attenuated.  Moreover, neither Chairman Issa nor Subcommittee Chairman Jordan appear at all concerned that the DOJ assigned a Civil Rights Division attorney to investigate the IRS.  The Civil Rights Division mostly prosecutes hate crimes cases and conspiracies to violate civil rights. The Civil Rights Division has no jurisdiction to investigate criminal violations that result when an officer or employee of the United States who “with intent to defeat the application of any provision of [the Internal Revenue Code] fails to perform any of the duties of his office or employment” or when the President, the Vice President, or any of their employees (as well as cabinet secretaries) “directly or indirectly” requests that the IRS “conduct or terminate an audit or other investigation of any particular taxpayer”.

Now the Oversight Committee wants Bosserman to testify before it this week in yet another hearing by a committee which has already spent months investigating the IRS’s political targeting.  As Principal Deputy Attorney General Peter J. Kadzik wrote to Subcommittee Chairman Jordan on Jan. 24, “Your decision to impugn the integrity of a career attorney raises serious concerns, . . . Targeting career attorneys in this manner could plainly have a chilling effect on the valid exercise by federal employees of their basic right to participate in the political process.”

Parsing through the Oversight Committee letter, it would seem that the only point Issa and Jordan are trying to make is that they don’t like that a federal employee has exercised her political speech.  That sounds like political targeting 101.

 

 

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Cause of Action Pursues Multimillion Dollar Fraud Lawsuit Against the Chicago Transit Authority After Justice Department Refuses to Intervene

January 22, 2014 by

FOR IMMEDIATE RELEASE                                                                                                     CONTACT:      

January 20, 2014                                                                                                        Mary Beth Hutchins, 202-400-2721

Cause of Action Pursues Multimillion Dollar Fraud Lawsuit Against the Chicago Transit Authority After Justice Department Refuses to Intervene

WASHINGTON – Cause of Action (CoA), a government accountability organization, is pursuing False Claims Act litigation against the Chicago Transit Authority (CTA) for engaging in systemic fraud at the expense of American taxpayers. The Department of Justice (DOJ), led by Attorney General Eric Holder, declined to intervene in the case.

CoA first brought the lawsuit to the DOJ’s attention on May 8, 2012, uncovering up to $150 million in taxpayer funds that the CTA may have improperly received by overreporting mileage for grant funding dating as far back as 1982. On December 16, 2013, the DOJ refused to intervene despite the Federal Transit Administration’s (FTA) own determination on April 27, 2012 that the CTA had misreported data in 2010.  Furthermore, the Department of Transportation’s (DOT) Inspector General and the FTA communicated about the need for recusals of agency employees moving forward.

In addition to the improper reporting, there exists potential conflicts of interest between the CTA and the Executive Branch; most notably Robert S. Rivkin, the current General Counsel at the DOT, who formerly served as CTA’s General Counsel from 2001 to 2004, and Valerie Jarrett, current Senior Advisor to the President, who was formerly a chair of CTA from 1995 to 2003.

“We are pursuing this fraud lawsuit against the CTA because American taxpayers deserve accountability,” said Cause of Action’s Executive Director, Dan Epstein. “The reputations of political insiders cannot be more important than the integrity of federal programs and the protection of taxpayer funds. When the federal government, including Department Inspector Generals, cannot be counted on to discourage fraud, citizen watchdog groups like ours must intervene.”

According to a report by the House Committee on Oversight and Government Reform, this isn’t the first time the DOJ decided not to intervene in a high-profile fraud case: In 2009, the DOJ and then Assistant Attorney General, Thomas Perez, who is the current Secretary of Labor, declined to intervene in a whistleblower lawsuit alleging the City of St. Paul improperly received federal funds. Perez’s decision, apparently involving an inappropriate quid pro quo agreement with the city, allowed the fraud to go unpunished.

In October 2012, CoA released an investigative report about fraud at the CTA, which can be read here.

About Cause of Action:

Cause of Action is a non-profit, nonpartisan government accountability organization that fights to protect economic opportunity when federal regulations, spending and cronyism threaten it. For more information, visit www.causeofaction.org.

To schedule an interview with Cause of Action’s Executive Director Dan Epstein, contact Mary Beth Hutchins,  202-400-2721 or Annalisa Musarra, annalisa.musarra@causeofaction.org.

Filed Under: Press Release Tagged With: ,

Statement on FTC Denial of Motion to Dismiss

January 17, 2014 by

On January 16, 2014, and as predicted, the FTC denied LabMD’s Motion to Dismiss its administrative case against the company.

FTC has never issued data security regulations for patient information.  The Department of Health and Human Services has.  And, FTC admits LabMD complied with those regulations.  But in its decision and order, which can be found here, FTC said compliance with HHS regulations did not matter.  Instead the “concrete circumstances of this case” provide an opportunity for the FTC to address “whether or not LabMD’s data security procedures constitute ‘unfair . . . acts or practices’” without regard for HHS’s rules.

Furthermore, FTC already had the opportunity to investigate whether or not it believed that LabMD’s data security procedures were “unfair” by issuing a Civil Investigative Demand (CID).   After years of investigation, FTC sued LabMD.  In other words, FTC’s approach is verdict first, trial after.

In its decision, FTC justifies its actions by saying Congress extended it rulemaking tools to regulate data security problems. The FTC concedes that they have the rulemaking authority, yet they chose to not engage in rulemaking. Instead they issued a CID and brought an enforcement action.

FTC’s actions here, from its claim of authority over patient information to its “pre-cooked” administrative action and verdict to its refusal to issue regulations and provide fair notice, have resulted in a gross bureaucratic overreach that is destroying a small cancer detection laboratory business.   This overreach must be stopped.  And that’s why Cause of Action will continue to fight the FTC’s arbitrary abuse of power in federal court.

 

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Dan Epstein on WIBA-AM Upfront w/ Vicki McKenna 01/14/2014

January 14, 2014 by

Discussing the FBI’s decision to forego criminal charges in the IRS investigation.

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