DHS Watchdog Claims Political Appointees No Longer Politicizing FOIA

One of the earliest transparency scandals of the Obama Administration erupted in 2010 when the Associated Press discovered that officials at the Department of Homeland Security (“DHS”) had, “in a highly irregular move,” started to “filter hundreds of public records requests through political appointees, allowing them to examine what was being requested and delay releasing sensitive material.”  These appointees, along with senior officials and public affairs staff, effectively blocked or delayed the disclosure of potentially embarrassing or politically-damaging agency records under the Freedom of Information Act (“FOIA”).  Their interjection into the FOIA process—and retaliation against career staff members who objected to this “sensitive review”— resulted in a congressional inquiry and damning Oversight Committee report.  The Obama Administration politicized FOIA the same way at the Department of Housing and Urban Development, the Environmental Protection Agency, the State Department, and the Department of the Treasury.  The situation at DHS, however, has improved, according to a recently-released Inspector General report.

The July 7, 2009 memorandum establishing sensitive review procedures at DHS included extensive reporting requirements, including updates to the White House about agency disclosures.  The DHS Inspector General politely described this, in a March 2011 report, as “unprecedented.”  It “created inefficiencies that hampered full implementation” of the FOIA.  More troubling, the policy had the practical effect of targeting media organizations and critics of the Administration.  Agency officials regularly delayed requests from media outlets, for example, so that they could develop a public response to damaging records.  And other disclosure decisions were sometimes based on the political affiliation of a requester.

Now, in response to a June 2015 request from the U.S. Senate Homeland Security and Governmental Affairs Committee, the Inspector General has published a new report that revisits its earlier findings and suggests that the culture of FOIA politicization at DHS has improved.  Since 2011, DHS has “reduced the number of days that political appointees . . . have to review releases from 3 days to 1 day.”  The sensitive review process has been renamed the “1-Day Awareness Notification Process.”  And, in most cases, FOIA officers “no longer wait for approval before releasing responses to significant FOIA requests” because it is “not required.”  An audit of 57 “significant requests” showed that none were delayed because of political appointee intervention.

These findings are positive.  The more limited involvement of fewer political appointees—“an advisor to the DHS Secretary, an official in the Office of Public Affairs, and the Chief FOIA Officer”—as well as a shorter “notification” period, limits the potential for politicization while respecting agency leadership’s concern for being kept aware of disclosures that might ignite media attention.  The apparent removal of any sort of necessary “clearance” authorization from political staff, or the removal of a requirement to obtain such clearance before release, is also a helpful development.  Oddly, DHS’s revised procedures are only “informally documented” in a “2012 email” and “2015 draft guidance.”  According to the Inspector General’s report, the DHS Privacy Office aims to finalize them by the end of the year.  The sooner, the better.

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

SiriusXM’s Kent Klein interviews CoAI Assistant VP Henry Kerner on Obama admin Hatch Act violations


Report Reveals How White House Evaded Checks, Likely Accessed Confidential Taxpayer Information

Washington, D.C. – Cause of Action Institute (CoA Institute) today released a comprehensive investigative report, Presidential Access to Taxpayer Information. The report covers in detail recent IRS misuse and unauthorized release of confidential taxpayer information and the possible role of a detailee program in the Office of the White House Counsel that may have provided access to the protected information.

The report states:

Following the misuse and unauthorized release of confidential taxpayer information during President Obama’s first term, including the largest breach of taxpayer confidentiality laws by the federal government in United States history, Cause of Action Institute investigated the legal and institutional checks designed to protect against such improper disclosure and the means by which the Obama administration may have evaded those checks.

That investigation revealed that President Obama has circumvented the congressionally created and authorized procedures for accessing confidential taxpayer information—procedures that were designed to be exclusive—by relying on individual consent forms that were never intended for use by the president. The practice has allowed the president to avoid the reporting requirements and limitations placed on presidential access to taxpayer information by the Tax Reform Act of 1976. In particular, the use of individual consents enables the administration to skirt statutory recordkeeping and reporting requirements to Congress, the limitations on the kind of information available for disclosure, and the extent to which such information can be shared within government agencies and offices.

The report reveals that throughout the Obama administration the Office of the White House Counsel employed at least one attorney detailed from the Department of Justice (DOJ) Tax Division.  At least two of those attorney-detailees had intimate knowledge of confidential taxpayer information gained while serving as counsel to the IRS in litigation with nonprofit groups opposed to President Obama’s policies. This information is otherwise restricted from disclosure to the President and other White House officials.

The report shows that neither the DOJ Tax Division nor the Office of the White House Counsel has implemented context-specific training, guidelines, or ethical screens to prevent the inadvertent or deliberate disclosure of confidential taxpayer information by attorney-detailees.

Inherent conflicts of interest in the detailing program make it imperative that Tax Division attorneys who work on detail to the Office of the White House Counsel, especially those who have served as counsel to the IRS in matters involving the political opponents of the president, receive enhanced training and supervision to ensure the safeguarding of confidential taxpayer information. There does not appear to be any such program, specialized training, or targeted guidelines in place.

The report makes several recommendations, including that Congress should amend the Internal Revenue Code to ensure that the exclusive mechanisms created by the Tax Reform Act of 1976 for presidential access to confidential taxpayer information are enforced.

The full report and executive summary can be found here.


Cause of Action Institute Investigates Taxpayer Bailout of ObamaCare Insurance Companies

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) to investigate the Obama administration’s apparent attempt to bailout insurers through judicial settlements to compensate for shortfalls in the Affordable Care Act (ACA) risk corridors program.

CoA Institute President and CEO, and former federal judge, Alfred J. Lechner, Jr.: “The continuing failures of the ObamaCare Risk Corridors Program raise serious concerns about the long-term viability of the program.  It appears the administration is attempting to circumvent the law by bailing out insurance companies through judicial settlements. Americans deserve to understand how far the administration is willing to go to prop up a failing program with taxpayer money.”

Under the ACA, the Risk Corridors Program was supposed to collect payments from insurers with lower than expected losses and redirect the money to subsidize insurers with higher than expected losses. But because of the monetary shortfalls in the risk corridors program, payouts have been limited.

On September 9, 2016, CMS released a document entitled “Risk Corridors Payments for 2015,” stating that “no funds will be available at this time for 2015 benefit year risk corridors payments.” More concerning, the CMS document essentially invites judicial settlements with insurance companies:

We know that a number of issuers have sued in federal court seeking to obtain the risk corridors amounts that have not been paid to date. As in any lawsuit, the Department of Justice is vigorously defending those claims on behalf of the United States. However, as in all cases where there is litigation risk, we are open to discussing resolution of those claims. We are willing to begin such discussions at any time.

The CMS document raises serious questions about the intentions of the administration to fund the risk corridors program. Moreover, the U.S. Department of Justice Office of Legal Counsel has also determined that these “backdoor bailouts” are improper.

CoA Institute today requested all records referring to a lack of funds for risk corridors payments to insurance companies, as well as all records related to the September CMS document entitled “Risk Corridors Payments for 2015.”

The full FOIA can be found here.

Growing Concern over Controversial Mortgage Settlements

Congress to Consider a Bill to Halt Government Slush Funds


On July 13, 2016, Cause of Action (CoA) Institute filed a complaint in the U.S District Court for the District of Columbia against the United States Housing and Urban Development (HUD). The lawsuit seeks records that HUD has failed to produce in response to a Freedom of Information Act (FOIA) request regarding HUD’s role in the federal government multi-million dollar settlements with three banks over their allegedly faulty mortgage practices.  As CoA Institute continues to investigate and litigate, others are paying attention to these troubling settlements as well.

Last week, prominent Washington Post columnist George Will penned a column calling out the government for using the bank settlements as a slush fund.  Will notes that the government:

allows banks to meet some of their settlement obligations by directing “donations” to various nongovernmental advocacy organizations that serve Democratic constituencies and objectives — organizations that were neither parties to the case nor victims of the banks’ behaviors. These donations are from money owed to the government, money that otherwise would go to the Treasury, money the disposition of which is properly Congress’s responsibility.

And in the Wall Street Journal, Andy Koenig, senior policy adviser at Freedom Partners Chamber of Commerce, similarly focuses on one of the key facets of these settlements: financial incentives for the banks to fund third party groups:

Most of the deals give double credit or more against the settlement amount for every dollar in “donations.” Bank of America’s donation list—the only bank to disclose exactly where it sends its money—shows how this benefits liberal groups. The bank has so far given at least $1.15 million to the National Urban League, which counts as if it were $2.6 million against the bank’s settlement. Similarly, $1.5 million to La Raza takes $3.5 million off the total amount of “consumer relief” owed by the bank. There are scores of other examples.

To address the growing chorus of concerns over these controversial settlements, the House of Representatives today will consider the “Stop Settlement Slush Funds Act of 2016,” a bill introduced by Rep. Bob Goodlatte (R-Va.)  to prevent any such future settlements. In other words, the bill would prohibit the government from creating a slush fund to direct settlement payments to favored (or any other) outside recipients.  The U.S. House of Representatives has scheduled a vote on this bill for September 7, 2016.

**UPDATE** The House passed the “Stop Settlement Slush Funds Act of 2016” on September 7 by a vote of 241-174.

CoA Institute Probes HHS’s Decision to Use Taxpayer Money to Pay Off Insurance Companies

Washington, D.C. – Cause of Action Institute (CoA Institute) today filed a Freedom of Information Act (FOIA) request to investigate the U.S. Department of Health and Human Services’ decision (HHS) to shift money away from taxpayers to pay off insurers.


The Affordable Care Act (ACA) established the transitional reinsurance program that requires HHS to make payments to health insurers who enroll high-risk individuals and deposit a portion of the contributions from insurers into the U.S. Treasury. Unfortunately for taxpayers, it appears when HHS collected less funds than required by the ACA, the agency decided to allocate all transitional reinsurance program funding to health insurers, depriving taxpayers of billions of dollars.

CoA Institute President and CEO, and former federal judge, Alfred J. Lechner, Jr.:

“COA Institute seeks to understand why the Obama Administration bailed out insurance companies with money that should have been returned to the U.S. Treasury to benefit taxpayers. Providing insurers with the entire contribution from the transitional reinsurance program is not the intention of section 1341(b)(4) of the Affordable Care Act. American taxpayers have a right to know why the Obama Administration skirted the law and gave money intended for the U.S. Treasury to insurance companies.”


Section 1341 of the ACA created the transitional reinsurance program. This program requires that HHS collect reinsurance contributions from health insurance providers and third party administrators on behalf of group health plans. In order to comply with the law, HHS was supposed to use those contributions to make payments to health insurers who enroll high-risk individuals and deposit a portion of the contributions in the U.S. Treasury. In total for 2014, 2015, and 2016, taxpayers were scheduled to receive $5 billion. According to the Congressional Research Service, providing the entire contribution from the transitional reinsurance program to health insurance providers is “in conflict with a plain reading of 1341(b)(4).”

CoA Institute requests documents and communications to understand the Obama Administration’s decision to use taxpayer money to pay off health insurance companies. The full FOIA request is available HERE.

CoA Institute Investigates Role of DHS, Shooter’s Motives in Dallas Shooting

Washington, DC – Cause of Action Institute (CoA Institute) today filed a Freedom of Information Act (FOIA) request to investigate the involvement of the Department of Homeland Security (DHS) in investigating and responding to the recent shooting of Dallas police officers. In light of seemingly contradictory statements by Secretary Johnson and President Obama regarding the shooter’s motives, CoA Institute seeks to better understand if information is being withheld from the American public.

CoA Institute President and CEO, and former federal judge, Alfred J. Lechner, Jr.: “Statements about the shootings by President Obama and DHS Secretary Jeh Johnson raise questions about the DHS role in responding to the Dallas shooting and whether there is information about the shooter being withheld from the public.  Because Secretary Johnson appears to be the first public official to confirm that only one shooter existed, it raises questions as to what extent DHS was involved during the aftermath of the shooting and why local authorities were not first in alerting the public. Additionally, discrepancies between statements by President Obama and the Dallas police chief raise concerns that there may be additional information about the motives of the gunman that are being withheld from the public by the Obama administration.”


On July 7, 2016, a gunman killed five police officers in Dallas, Texas.  On July 8, Chief David Brown held a press conference and stated that multiple suspects may be involved. Three suspects were ultimately taken into custody. Later the same day, Secretary Johnson contradicted initial reports by announcing that the gunman apparently acted alone. According to media reports, Secretary Johnson was the first public official to announce that the gunman was a sole actor.

Additionally, at a press conference on July 9, President Obama said that it is “very hard to untangle the motives” of the Dallas shooter.   He further stated, “I’ll leave that to psychologists and people who study these kinds of incidents . . . I think the danger is that we somehow suggest the act of troubled individuals speaks to some larger political statement across the country.”   President Obama’s statement that the motives of the gunman appear uncertain directly contradicts Dallas Police Chief David Brown’s description of the incident.  According to Chief Brown, the gunman stated that he “was upset about the recent police shootings…and he wanted to kill white people, especially white officers.”

CoA Institute requests documents and communications to better understand the role of DHS in the aftermath of the Dallas Shooting. The full FOIA request is available HERE.