by Tom Fitton Judicial Watch recently suffered a temporary setback in its pursuit of records related to Fannie Mae and Freddie Mac’s political contributions. On September 30, 2010, the U.S. District Court for the District of Columbia ruled, in effect, that the Obama administration may keep the records of these two government-controlled enterprises secret.
Here is the statement I offered to the press in response:
This [ruling] shows that the Obama Administration’s commitment to transparency is a big lie. It is incredible that taxpayers are on the line for at least $400 billion, yet cannot access one document from these agencies under the Freedom of Information Act (FOIA).Judicial Watch filed a lawsuit against the Federal Housing Financial Authority (FHFA) to force the agency’s compliance with a FOIA request, which Judicial Watch submitted on May 29, 2009.
According to Judicial Watch’s motion filed on March 5, 2009, Fannie and Freddie are no longer private enterprises, and therefore their records should be subject to FOIA law:
Until they were seized by FHFA in September 2008, Fannie Mae and Freddie Mac were private corporations with independent directors, officers, and shareholders. Since that time, however, FHFA, a federal agency subject to FOIA, has assumed full legal custody and control of the records of these previously independent entities. Hence, these records are subject to FOIA like any other agency records.The court agreed, in large part, with Judicial Watch’s principle arguments, but in the end ruled in favor or the Obama administration in what could perhaps be described as a “split decision.”
Since we’re considering our option to appeal the decision, I think it’s worth a quick review of what the court has said in some detail. Hang with me here as this gets a bit technical in spots.
The Court considered two main questions in determining whether the FHFA records relating to Fannie and Freddie are subject to FOIA.
First, were the records created or obtained by a federal agency?
The Court answered “yes” to this question and in favor of Judicial Watch’s position: “Because the FHFA has title to the records and access to them, the Court concludes that it has ‘obtained’ the records,” presiding U.S. District Court Judge Paul Friedman wrote.
Second, does the FHFA control the records?
Now here’s where it gets a bit tricky. The courts have established a four-pronged test to determine whether or not a federal agency has “control” over records:
(1) the intent of the document’s creator to [either] retain or relinquish control over the records; (2) the ability of the agency to use and dispose of the record as it sees fit; (3) the extent to which agency personnel have read or relied upon the document; and (4) the degree to which the document was integrated into the agency’s record system or files.The Court ruled that the first two factors weigh in favor of Judicial Watch and the latter two weigh in favor of the Obama administration. However, Judge Friedman deemed the latter two factors “most important,” tipping the scale in favor of the government. Ultimately, therefore, the Court ruled FHFA did not control the records, and could therefore continue to keep them secret. I suggest you check out the ruling for yourself, as well as Judicial Watch’s detailed court filings. But we believe, particularly with respect to the fourth factor, there is no question the Fannie and Freddie records were integrated into the agency’s files and are therefore subject to FOIA.
The Court essentially ruled that the records are not public documents because they were created before the government took control of Fannie and Freddie. The Court also ruled that because, supposedly, no one in the Obama administration’s agency “uses” the documents, that they be kept secret from the American people.
Respectfully, I’m not persuaded.
Fannie and Freddie used political contributions to protect themselves as they set up the housing market for collapse. Now, as a result, taxpayers are on the hook to Fannie and Freddie for at least $400 billion — and $5 trillion in mortgage liabilities. The Obama administration has taken over the mortgage market through Fannie and Freddie. And not one document from these two monstrosities is subject to disclosure under our open records law? No wonder the Tea Parties are growing. The Obama administration is out of control and argues to courts for radical secrecy and lack of accountability.
