The FOIA blog

SEC Fiasco -- Friday Roundup

Josh Gerstein of Politico has this article, in which he quotes me telling what the SEC will make of the new exemptions it has been given.

Senator Ted Kaufman (D-DE) says the new exemption is too broadly written according to WDEL 1150AM.

And the Reporters Committee for Freedom of the Press has this to say.

More Blogs Weigh In on SEC

The Columbia Journalism Review has this.

The Reynolds Center for Business Journalism has this. (Thanks for the shout out to the FOIA blog!)

These articles both reach the same conclusion -- the new law doesn't entirely exempt the SEC from FOIA but it is unclear just how broad the new law really is.

SEC Fiasco --- POGO Weighs In

The Project On Government Oversight weighs in on the SEC's FOIA Exemption provided by it in the financial reform bill.  And POGO points out that there is also a second provision giving the SEC the ability to withhold information under the FOIA in the bill.

Legislation to Repeal New SEC FOIA Powers

Politico reports that Darrell Issa (R-CA) will introduce legislation repealing the new powers given to the SEC to withhold material pursuant to FOIA requests.

Update:  And from Politico, here's the actual legislation.

Media Matters Weighs In on Fox's Reporting of SEC/FOIA Matter

Media Matters has this report taking Fox News to task for its reporting on the FOIA Exemption given to the SEC in the financial reform bill.

Some at Fox News have blown this out of proportion; I doubt that many of them know much about FOIA.  However, Fox Business Network's original piece was on point, the legislation, if read broadly--and the SEC does have a history of reading its FOIA withholding powers broadly--does make many FOIA requests to the SEC pointless.

So the bigger issue is now, what does the legislation really mean?  Does it only exempt information given to the SEC as part of its new powers under the financial reform bill?  Or does it allow the SEC to exempt information it gets as part of its old powers in enforcing financial laws?  Ironically, some would argue that it was the SEC's failure to use its old powers that brought us to the point of needing reform in the first place.

SEC Exempt From FOIA -- Not So Fast According to Washington Post

Zach Goldfarb of the Washington Post saysthe SEC isn't nearly as exempt from FOIA as the Fox Business Network reporting states.  Goldfarb says that the new provision only "exempts the SEC from disclosing records derived from 'surveillance, risk assessments, or other regulatory and oversight activities,' this only concerns documents obtained through examinations of broker-dealers and investment advisers -- periodic or targeted reviews of financial firms." 

Goldfarb states that "Information from investigations into potential wrongdoing has never been obtainable through FOIA."  He is wrong in this assertion.  Information from OPEN investigations has been withholdable pursuant to FOIA exemption 7(A) (as it is by all federal law enforcement agencies-not just the SEC).  However, once an investigation is closed, the information may be released pursuant to a FOIA request -- unless it is covered by another FOIA exemption. 

It is unclear if the SEC plans to utilize its new statutory authority to protect information received from brokers, investment advisers and other individuals in closed law enforcement investigations that have to do with the SEC's job as enforcers, not regulators; the Fox Business News report made it appear that the SEC, through its attorneys in litigation, plans to do just that.  More clarification from the SEC is needed. 

More on the SEC

UPDATED at 2:56 PM 7/28/10

Here are more items about the apparent power of the SEC to ignore most FOIA requests: 

Congressman Darrell Issa (R-CA) is upset over the provision, however as a member of Congress he obviously didn't read the legislation when the measure was before the House of Representatives.  While he voted against the bill, I believe if he knew what was in it, he would have said something about it at the time.

Here's the Wall Street Journal blog on the new law with Fox Business Network's video report embedded.

Here's the video of my former co-counsel Gary Aguirre speaking with Fox Business Network about the issue.

Compliance Week has this -- the article explains exactly what material is exempt and has a quote from the SEC.

Is the SEC Now Exempt from FOIA?

UPDATED 7/28/10 1:10 PM

According to the SEC, it no longer has to release documents due to a provision in the recently passed financial reform bill.  That, at least, is the position it is taking in litigation according to Fox Business  Network. [Ed. note- I was co-counsel with Gary Aguirre, who is quoted in the article describing his FOIA actions against the SEC.]

The SEC claims that a provision in the new law allows it to withhold information derived from "surveillance, risk assessments, or other regulatory and oversight activities."  This would be a new Exemption 3 statute.  These activities are, of course, what the taxpayer funded agency does.  So, if the SEC is correct, they only need to respond to FOIA requests concerning internal agency personnell matters, contracting, etc... and can ignore requests from the public trying to find out what the agency is up to (or in the past--what the SEC is not doing to catch the bad guys).

One issue that quickly comes to mind is retroactivity of the exemption.  Do past agency actions prior to the time the law went into effect get the benefit of the exemption?  Recent FOIA law states that there is no retroactivity in the FOIA where it isn't expressly stated-- at least in connection with attorney fees.

Further, this is not a mandatory withholding provison.  In other words, if the SEC Commissioners decide they would like their agency to be transparent, they are free to ignore this and release information on a discretionary basis.

Also, I have learned that Congress only intended to protect records under FOIA exemption 3 that were specifically related to the enhanced regulatory enforcement provisions given to the SEC in the financial reform bill.  Somehow, the language was broadened in the final bill.

Hopefully, Congress will see the error of their ways and restore transparency to the SEC.

FACA Amendments Pass House

According to Josh Gerstein of Politico, the FACA amendments of 2010 have passed the House of Representatives and are on their way to the Senate.

Open The Goverment Ranks Agency Open Government Plans

OpenTheGovernment.org has ranked agency open government plans and decided that NASA's plan is out of this world.  NASA ranks first for agencies, Treasury comes in last-- someone needs to bail them out!  The rankings can be found here.  Sean Reilly of the Federal Times has this in depth article on the rankings.

Update:  JW is correct, Peace Corps is last, maybe they need the bail out.  I find the rankings somewhat confusing--even though Open the Government goes in to great detail in explaining them.