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10/31/2017

Transparency Groups: Finalize Release to One, Release to All FOIA Policy

Cause of Action Institute and Sunlight Foundation file petition to advance rule that would promote broad disclosure of agency records

Washington, DC – Cause of Action Institute (“CoA Institute”) today joined the Sunlight Foundation in filing a petition for rulemaking demanding the Trump administration move forward with a rule to promote government transparency and broad public disclosure of agency records. The Release to One, Release to All rule, first proposed by the Obama administration, mandates that agencies make records produced in response to Freedom of Information Act (“FOIA”) requests also publicly available on the agencies’ websites, with certain limited exceptions. CoA Institute also led a broad coalition of government transparency organizations in sending a letter to the White House Office of Management and Budget (“OMB”) and Department of Justice Office of Information Policy urging action to finalize the rule.

CoA Institute Counsel and Senior Policy Advisor James Valvo: “‘Release to One, Release to All’ is a great way to increase the amount of government information in the public sphere. When agencies release information under FOIA, with limited exceptions, it is prepared for release to the public. The Obama administration has already run the pilot program and the Department of Justice has already accepted public comment on the policy. It’s time to finalize it.”

Sunlight Foundation Deputy Director Alex Howard: “Despite multiple requests for updates from the Justice Department over the past year, it does not appear the Trump administration has any plans to finalize and promulgate this policy, or even answer basic questions about why it has stalled. Our petition compels the Trump administration to either move forward with disclosure and implementation, or explain why they don’t believe the policy is workable. The ‘Release to One, Release to All’ policy for the Freedom of Information Act has broad support within the transparency community, and we deserve an explanation as to why progress has ground to a halt after months of analysis, planning and responsive feedback to a request for public comment.”

On June 30, 2016, President Obama directed a review of the feasibility of such a FOIA policy. More than ten months have passed since the January 1, 2017 completion deadline for that review. Despite this analysis and gathering public comments, progress on the rule has now halted completely without explanation.

For these reasons, CoA Institute led a group of 22 organizations in sending a letter to the White House and Justice Department urging them to take the next step in finalizing the policy.

The letter states:

“Release to One, Release to All” is sound public policy that would increase government transparency and leverage the existing investment in FOIA disclosures… Placing this information in the public domain would allow the public to know what type of information is being requested, to search these prior productions for information relevant to their own purposes, and, perhaps, decrease the number for future requests or facilitate future requesters making more informed and targeted requests. What’s more, placing these information resources into the public domain has the potential to create unknown benefits, such as analyses of patterns in FOIA requests and harnessing of the information for other uses… We urge you to take the next step and finalize the policy.

The petition for rulemaking can be found here.
The letter can be found here.

For information regarding this press release, please contact Zachary Kurz, Director of Communications at CoA Institute: zachary.kurz@causeofaction.org

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08/8/2017

Documents Reveal Special Interest Groups Lobbied HUD for Mortgage Settlement Funds

Groups committed to “revolutionary social change” sent proposals, met with high-level HUD officials

The Obama-era appears to have been a flush time for a number of favored special interest groups seeking hand-outs. It now appears that the previous administration’s pattern and practice of circumventing the congressional appropriations process to funnel money to third-party groups may have been more widespread than we thought. Beginning in 2013, the federal government entered into a number of settlements with major banks to resolve claims related to the issuance of residential-mortgage-backed securities. These settlements included billions of dollars in “consumer relief” payments that should have gone to the alleged victims, but instead were funneled to third-party organizations, including to those favored by the Obama administration.

CoA Institute has been investigating these settlements for several years and has recently uncovered documents indicating that some of these third-party organizations were directly lobbying high-level Housing and Urban Development (“HUD”) officials for a piece of the settlement pie. These documents are consistent with prior records discovered by the House Judiciary Committee regarding similar lobbying of Department of Justice (“DOJ”) officials.

In May of 2015, the House Judiciary Committee wrote a letter to the DOJ requesting information and documents relevant to the residential-mortgage-backed securities settlements.  The information they received suggested that some third-party organizations were advocating for provisions that included mandatory donation requirements from which they would benefit.

One of the communications the House Judiciary Committee received was an email sent on November 8th, 2013 from the Leadership Conference on Civil and Human Rights (LCCHR) to the DOJ.  In the email, LCCHR urged the DOJ to include funds in the JP Morgan settlement promoting community restoration and specifically seeking investment in Virginians Organized for Interfaith Community Engagement (VOICE) and their Metro Industrial Areas Foundation (Metro-IAF) affiliates. The DOJ also provided the House Judiciary Committee with an email from VOICE leadership to the head of legislative affairs at the DOJ.  VOICE asked to set-up a meeting to make the argument that grants to community equity restoration funds be mandatory in all future settlements.

Commentators have noted that groups like VOICE and their IAF affiliates have “a commitment to what [they] call ‘revolutionary social change’” promoted through their own training institutes. One “objective of the training is to help leaders see the connection between their local issues and the broader national IAF objectives and associated progressive causes.”

CoA Institute recently received documents from HUD that are similar to those that the House Judiciary Committee received from the DOJ two years ago.  CoA Institute filed a FOIA request for information on HUD’s involvement in the mortgage settlements.  After filing a complaint against HUD for failing to disclose its role in the mortgage settlements, COA received documents including the segments below from HUD. The HUD documents reveal communications between HUD and VOICE, the same organization that had been lobbying the DOJ to receive settlement funds.

For instance, the following is an email between senior policy advisor Michelle Maiwurm, then working for Sen. Mark Warner (D-VA), and Damon Smith, then Principal Deputy General Counsel at HUD, discussing opportunities for third parties, such as VOICE, to submit proposals for the settlement agreement.

The lead organizer at VOICE, Martin Trimble, responds to a meeting with HUD officials Lelaine Bigelow and Damon Smith earlier that day and attaches the fund proposal.

 

Here are the relevant portions from VOICE’s proposal for the VOICE/Metro IAF National Community Equity Restoration Fund mentioned in the previous email correspondence.

The parallel evidence discovered from documents submitted to the House Judiciary Committee and those provided to CoA Institute helps explain why Attorney General Jeff Sessions recently prohibited DOJ from entering into settlement agreements that provide for payments to non-governmental, third-party organizations that are not parties to the dispute. In order to ensure this problem won’t reoccur in a future administration or with other agencies, however, Congress should pass the Stop Settlement Slush Funds Act of 2017. This bill would prevent all agencies, not just DOJ, from entering into these slush-fund agreements, would remove agencies’ ability to divert funds to politically-aligned third-parties and would allow them to be disbursed to actual victims of the alleged violations or deposited in the Treasury, as required by law.

Josh Schopf is Counsel and Cara Brown is Law Clerk at Cause of Action Institute, a Washington, D.C. non-profit oversight group advocating for economic freedom and individual opportunity.

 

 

 

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07/31/2017

Senator Grassley Claims the Trump Administration is Rejecting the DOJ’s Opinion on Responding to Congressional Records Requests

At the end of last week, Senator Chuck Grassley’s office published a press release that claimed the White House “has committed to voluntarily answer all congressional inquiries, not just those from committee chairmen.” The White House’s response has seemingly resolved the Judiciary Committee Chairman’s concern that the Administration had wedded itself to what Senator Grassley described as a “nonsense” legal opinion issued by the Department of Justice’s Office of Legal Counsel (“OLC”).

Cause of Action Institute (“CoA Institute”) previously reported on the OLC opinion, arguing that the Trump Administration may be charting a course into newer and less transparent waters. The opinion was technically correct in emphasizing that individual Members of Congress lacked constitutional authority to conduct formal, compulsory oversight.  But the OLC also provided a distorted view of the law by implying that federal agencies could ignore requests, or provide limited responses on a discretionary basis, simply because of a Member’s political affiliation or position in leadership.

In response to a rebuke from Senator Grassley, who requested that the White House rescind the OLC opinion, White House Director of Legislative Affairs Marc Short clarified that the opinion did not, in fact, “set forth Administration policy,” but only “legal advice consistent with the research of the Congressional Research Service.” Mr. Short further indicated that “[t]he Administration’s policy is to respect the rights of all individual Members, regardless of party affiliation,” and to “use its best efforts to be as timely and responsive as possible . . . consistent with the need to prioritize requests from congressional Committees, with applicable resource constraints, and with any legitimate confidentiality or other institutional interest of the Executive Branch.”  Steven Engel, the Administration’s current nominee for head of OLC, has promised to revisit and clarify aspects of the OLC opinion.

Whether the White House’s response to Senator Grassley is a “commitment of cooperation” is yet to be seen. The Administration’s actual policy for responding to congressional inquiries is unclear, as CoA Institute’s ongoing efforts to investigate the General Services Administration demonstrate. Mr. Short’s letter and Mr. Engel’s confirmation hearing promises leave enough doubt as to the exact contours of the President’s transparency agenda.  The fact remains that Executive Branch officials have publicly acknowledged a “new policy,” which appears consistent with the OLC opinion.  Until more details about that policy emerge, it will be hard to evaluate whether, or to what extent, the White House has reversed course.

Ryan P. Mulvey is Counsel at Cause of Action Institute

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07/18/2017

CoAI Sues for Records of House Committee Chair’s Urging FOIA Obstruction

Records could shed light on DOJ’s communications with Chairman Hensarling, reveal guidance to agencies

Washington D.C. – Cause of Action Institute (“CoA Institute”) today filed a lawsuit against the Department of Justice (“DOJ”) for records that could reveal whether the agency’s Office of Information Policy or Office of Legislative Affairs was involved with a controversial, and legally dubious, directive from the House Committee on Financial Services concerning the processing of records under the Freedom of Information Act (“FOIA”).  The suit also seeks records of related communications between DOJ and twelve federal agencies under the Committee’s jurisdiction.

In May 2017, CoA Institute filed a FOIA request with the DOJ in response to reports that Rep. Jeb Hensarling (R-Texas), Chairman of the House Committee on Financial Services, directed the Department of the Treasury and eleven other agencies to treat all records exchanged with the Committee as “congressional records” not subject to the FOIA.

CoA Institute Counsel Ryan Mulvey: “Through its Office of Information Policy, the DOJ is responsible for overseeing government-wide compliance with the FOIA.  The DOJ likely would have been consulted by agencies that received Chairman Hensarling’s letter, as well as by the Committee itself when it was considering the directive.  The public deserves to know how and to what extent DOJ FOIA experts have been involved in formulating and implementing this new anti-transparency policy.’”

Because Congress is not subject to the FOIA, a request for records that have been exchanged with the legislative branch can present unique difficulties for an agency.  The law and well-established court precedents require that Congress manifest a clear intent to maintain control over specific records to keep them out of reach of the FOIA.  Chairman Hensarling’s directive is ineffective in this respect.  The mere fact that an agency possesses a record that relates to Congress, was created by Congress, or was transmitted to Congress, does not, by itself, render it a “congressional record.”  Any deviation from the acknowledged standard for defining a “congressional record” would frustrate the FOIA and impede transparent government.

CoA Institute’s complaint is available here.

For information regarding this press release, please contact Zachary Kurz, Director of Communications: zachary.kurz@causeofaction.org

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06/8/2017

Is President Trump Directing Agencies To Ignore Democrats’ Oversight Requests?

The transparency community was abuzz last week when Politico reported that the White House was directing federal agencies to ignore oversight requests from Democratic legislators. According to unnamed “Republican sources,” a White House lawyer “told agencies not to cooperate” with record requests from the minority. Politico described this as “amount[ing] to a new level of partisanship in Washington[.]”  But is that the case?

There is a dearth of publicly available evidence as to the Trump Administration’s actual policy. The White House has been cagey in providing clarification. Politico reported that a White House spokesman insisted that agencies should “accommodate the requests of chairmen, regardless of their political party.”  But Republicans control both the House and the Senate and all congressional committee chairmanships, so the official policy, if any, remains unclear.

Some Democrats have claimed that officials at the Office of Personnel Management and the General Services Administration refused to disclose information without a committee chairman co-signing an official request. Cause of Action Institute filed Freedom of Information Act (“FOIA”) requests with those agencies today (here and here) in an effort to verify what Democrats might have been told because—again—the relevant records are not publicly available and agency officials deny the Democrats’ allegations. Similar stories of agencies remaining silent when approached by Democrats have circulated over the past few months.

The Project on Government Oversight offered a measured response to Politico’s report, suggesting that the Administration’s course appears consistent with Reagan-era Department of Justice (“DOJ”) guidance that effectively directs agencies to process requests from individual Members under the FOIA. That difference in treatment, as compared to requests from committees or those with official oversight responsibility, is particularly relevant to an agency’s inability to withhold information under 5 U.S.C. § 552(d).

A recent opinion letter from DOJ’s Office of Legal Counsel (“OLC”), however, does appear to complicate matters. The letter suggests that the Trump Administration may be charting a course into newer and less transparent waters:

“The constitutional authority to conduct oversight—that is, the authority to make official inquiries into and to conduct investigations of executive branch programs and activities—may be exercised only by each house of Congress or, under existing delegations, by committees and subcommittees (or their chairmen). Individual members . . . do not have the authority to conduct oversight in the absence of a specific delegation . . . . Accordingly, the Executive Branch’s longstanding policy has been to . . . accomodat[e] congressional requests for information only when those requests come from a committee, subcommittee, or chairman authorized to conduct oversight.”

Unfortunately, the OLC opinion misframes the issue and, in doing so, provides a distorted view of the law. True: an individual Member’s request for information—regardless of political affiliation—“is not legally enforceable through a subpoena or contempt proceedings,” and, in that sense, the Member lacks “constitutional authority” to conduct formal oversight.  But nothing prohibits a legislator from requesting information for his own purposes, on behalf of a constituent, or to try to hold the Executive Branch accountable in a more colloquial sense of “oversight.”  As former White House attorneys Andy Wright and Justine Florence argue, Republicans often sought disclosure of records from the Obama Administration when they were not in control of Congress. In such instances, federal agencies should not, in theory, have ignored the requests, but instead followed DOJ guidance and processed them under the FOIA, just like a record request from any member of the general public.

The track record of the Obama Administration, in this respect, is hardly flattering. Indeed, Wright and Florence’s claim that the Trump “[A]dministration believes members of Congress asking for information about federal agencies are entitled to even less than members of the public,” is loaded with irony.  As attorneys in the Office of the White House Counsel, Wright and Florence personally helped President Obama lead one of the least transparent governments in American history. Cause of Action Institute was the first to expose the Obama Administration’s practice of “White House equities” review, which lead to the severe delay and occasional ignoring of both FOIA requests and congressional record requests, including those that had been issued under subpoena. Individual Members and committee chairmen alike were subject to this politicized review process.  If the Executive Branch has formally adopted a policy to obstruct Democrats, it would be a continuation of President Obama’s legacy of opacity and secrecy.

To summarize, the relevant legislative history and DOJ guidance states that a Member of Congress enjoys a statutory right of public access under the FOIA (and, similarly, the Privacy Act) to records of the administrative state. Minority oversight requests should be considered FOIA requests as a matter of course.  An individual Member would thus have the same right as anyone to “enforce” his request under the FOIA’s judicial review provision, 5 U.S.C. 552(a)(4)(B).  It is improper for OLC to suggest that agencies should only provide “discretionary responses,” say, “to correct misperceptions or inaccurate factual statements.”  An agency may exercise discretion to prioritize a Member’s request or to release exempt material from responsive records.  But an agency lacks the discretion to ignore a Member of Congress simply because of his or her political affiliation or position in leadership.

Ryan Mulvey is Counsel at Cause of Action Institute.

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06/7/2017

Cause of Action Institute Applauds AG Sessions’ Termination of Settlement Fund Payouts to Third-Party Groups

Cause of Action Institute (“CoA Institute”) applauds Attorney General Jeff Sessions’ prohibition on settlement agreements that include a payment or loan to non-governmental entities that are not parties to the dispute. On June 5, 2017, AG Sessions issued a memorandum entitled “Prohibition on Settlement Payments to Third Parties” to senior Department of Justice (“DOJ”) officials.[1]  The memorandum prevents all DOJ attorneys from “enter[ing] into any agreement on behalf of the United States in settlement of federal claims or charges, including settling civil litigation[.]”[2]  AG Sessions has taken an important first step to reign in agency overreach that impels private companies to foot the bill for an administration’s otherwise unfunded policy objectives.

Cause of Action Institute President and CEO John Vecchione: “I applaud Sec. Sessions for his bold reversal of the previous administration’s unwise pattern of using settlements with private companies to fund favored political projects. These deals were negotiated behind closed doors and wound up funneling money to third party groups rather than to the victims of the Defendant’s alleged misconduct. The government should not abuse the settlement process to fund favored political causes, often in direct contravention of Congress’ appropriation authority. The Trump administration’s strong stance against these ill-conceived deals is a step in the right direction, but this policy should be codified in statute as well.”

For years, CoA Institute has raised concerns about these settlement practices. Two years prior to the DOJ memorandum, CoA Institute began investigating  DOJ’s multi-million dollar, closed-door settlements with banks over their alleged faulty mortgage practices.  The opaque settlement process provided no accountability and prevented congressional oversight of what should be taxpayer funds.[3]  We submitted a FOIA request and a petition for rulemaking to seek clarity from DOJ regarding its statutory authority to enter into these settlement agreements that require private companies to allocate significant settlement funds to third-party groups.[4]  We also raised concerns about how—and who—selected the third-party recipients of the payouts.  If DOJ required the payouts go to specific third-parties, then the administration could direct millions of dollars to any administration-favored organization.  The bank settlements also provided an incredible incentive for the banks to “donate” the money to such favored causes—a 2-to-1 penalty forgiveness provision.  In the bank settlement cases the settlement funds were being directed to liberal groups approved by the Department of Housing and Urban Development and the Department of the Treasury.

CoA Institute has continued to monitor this issue as other agencies, often in conjunction with DOJ, entered into settlement agreements providing money to third-party groups unrelated to the alleged violations.[5]  Recently, we wrote a letter to EPA Administrator Scott Pruitt regarding an Obama-era settlement with Harley-Davidson, Inc. that funneled $3 million to a project unrelated to the alleged violations.[6]  The Harley-Davidson consent decree follows the same pattern of abuse: an agency brings an enforcement action against a company that is settled quickly behind closed doors and provides for a payout to a politically aligned organization.  In the Harley-Davidson case, EPA required a $3 million “Emissions Mitigation Project” to remedy the alleged violations of the Clean Air Act.

While the DOJ memorandum provides a carve-out for payouts that “directly remed[y] the harm sought to be redressed,” the Harley-Davidson agreement fails to connect the alleged violation—excess gas and nitrogen oxides emissions—to the project—replacing wood-burning appliances in the northeast. Given the lack of the required nexus, EPA overstepped its authority by requiring Harley-Davidson to fund the changeout project and should look to replace that project with one that remedies the alleged violations.  Further, the project replaces these appliances by having a third-party group distribute funds to individuals that buy new appliances.

In 2009, Congress increased a tax credit to help fund wood-burning appliance changeouts, but in 2011, the following Congress slashed that tax credit. EPA’s requirement that Harley-Davidson fund the wood-burning appliance project essentially supplants the congressional appropriations process by providing funding for a program that Congress defunded.

Congress has also raised concerns about this usurpation of its authority to spend funds. In order to prevent these projects from reemerging under a new administration, Rep. Bob Goodlatte (R-Va.) has introduced the Stop Settlement Slush Funds Act of 2017 which has passed out of committee to be taken up by the full House.[7]  This legislation will prevent all agencies, not just DOJ, from entering into these slush-fund settlement agreements with non-governmental entities that are not parties to the litigation.  This bill will remove agencies’ ability to divert funds to politically-aligned third parties and allow them to be disbursed to actual victims of the alleged violations or deposited in the Treasury, as required by law.

[1] Memorandum from Jeff Sessions, Attorney Gen., U.S. Dep’t of Justice, to U.S. Attorneys et al. (June 5, 2017), available at https://www.justice.gov/opa/press-release/file/971826/download.

[2] Id.

[3] See Dan Epstein, Obama DOJ Channels Bank Shakedown Money to Private Groups, Investor’s Bus. Daily (July 7, 2015), http://www.investors.com/politics/perspective/justice-department-says-bank-shakedowns-public-service/.

[4] Press Release, Cause of Action Inst., Cause of Action Launches Investigation into the Justice Department’s Settlements with Large Financial Firms (June 17, 2015), https://causeofaction.org/cause-of-action-launches-investigation-into-the-justice-departments-settlements-with-large-financial-firms/.

[5] See generally Congress to Consider a Bill to Halt Government Slush Funds, Cause of Action Inst. (Sept. 7, 2016), https://causeofaction.org/growing-concern-over-controversial-mortgage-settlements/.

[6] Press Release, Cause of Action Inst., Pruitt Should Reconsider Obama-Era Settlement with Harley-Davidson that Funnels Millions to an Unrelated, Politically-Favored Project (June 1, 2017), https://causeofaction.org/pruitt-reconsider-obama-era-settlement-harley-davidson-funnels-millions-unrelated-politically-favored-project/.

[7] Stop Settlement Slush Funds Act of 2017, H.R. 732, 115th Cong. (2017).

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06/1/2017

Pruitt Should Reconsider Obama-Era Settlement with Harley-Davidson That Funnels Millions to an Unrelated, Politically-Favored Project

Washington, D.C. – Cause of Action Institute (CoA Institute) today sent a letter to EPA Administrator Scott Pruitt urging him to reconsider an Obama-era settlement reached with Harley-Davidson, Inc. for selling after-market “super tuner” devices to boost performance of their motorcycles. The EPA alleged these devices were sold in violation of the Clean Air Act. Without admitting liability, Harley-Davidson agreed to settle the lawsuit.

The settlement included a controversial requirement that Harley-Davidson fund a seemingly unrelated program to replace or retrofit wood-burning stoves with cleaner appliances, which appears to violate the agency’s own guidance on the issuance of consent decrees.

CoA Institute also issued a separate Freedom of Information Act (“FOIA”) request to the EPA for documents related to the settlement negotiations.

CoA Institute President and CEO John Vecchione: “EPA is erring by not implementing a mitigation project by Harley-Davidson that fits the violation as required by applicable rules. The Obama administration’s pattern of using settlements to fund favored political projects is a dangerous precedent that should be reviewed and reversed. Funneling settlement funds to pet projects should not supplant the congressional appropriations process or applicable rules that mitigation projects address the underlying harm caused.”

Unlike the defeat devices unknowingly installed in Volkswagen vehicles, the Harley-Davidson “defeat devices” were freely and intentionally purchased by individuals, and came with labels that detailed what “performance enhancements are considered street legal and for competition-use only” and warned against improperly using the devices. Harley-Davidson maintains that these products, which have been sold for over two decades, “[were] and [are] legal to use in race conditions in the U.S.”

The “Emissions Mitigation Project” included in the consent decree requires Harley-Davidson to fund a “wood-burning appliance changeout and retrofit.” The project is defined as a “supplemental environmental project” (“SEP”). However, in 2015, the EPA issued a guidance document outlining the legal requirements enforcement officials must adhere to when crafting an SEP.  The Harley-Davidson consent decree violates EPA’s guidance on SEPs by not establishing a sufficient nexus between the mitigation project and the alleged underlying violations.

In its letter, CoA Institute urges EPA Administrator Pruitt to reconsider the Harley-Davidson consent decree’s unlawful Emissions Mitigation Project, and replace it with a project that conforms to the SEP Policy’s sufficient nexus requirement.

The letter to Administrator Pruitt is available here The FOIA request is available here

For information regarding this press release, please contact Zachary Kurz, Director of Communications: zachary.kurz@causeofaction.org

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