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March 21 Letter from NHRC’s Dorpalen to CFPB Senior Advisor Calls for Extension of Home Affordable Modification Program; Obama Administration Extends Program Eight Weeks Later 

(Washington, DC) – Judicial Watch announced today that it has obtained documents from the Consumer Financial Protection Administration (CFPB) revealing that Bruce Dorpalen, the former Director of ACORN Housing and current Executive Director of the ACORN spin-off the National Housing Resource Center (NHRC), has met repeatedly with top Obama administration officials, including CFBP Director Richard Cordray and U.S. Comptroller of the Currency Thomas Curry, to advise them on government housing policy.

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According to the documents, obtained pursuant to a Judicial Watch Freedom of Information Act (FOIA) request filed on May 16, 2013:

  • In a December 10, 2012, email, CFPB Senior Advisor Brenda Muniz wrote to Dorpalen to confirm that he would, “be the one to introduce Director Cordray” at an NHRC “Leaders in Housing Counseling” forum held to be held at Washington’s Renaissance Hotel on December 12.

When Dorpalen invited Muniz and CPFB Associate Director Zixta Martinez to a dinner with representatives from several housing counseling agencies the night before the forum, Muniz apparently had questions about attending the event, writing to Martinez, “I’m going to submit this to ethics unless you think I shouldn’t.” No information was provided as to Martinez’ response.

  • The attendees list generated by Dorpalen for Muniz concerning an April, 2013 meeting indicates that Dorpalen met with CFPB Regional Strategist Keo Chea and with representatives of the Federal Reserve. The meeting was also attended by Dustin Toomey, the Executive Director of Affordable Housing Centers of PA (an ACORN spin-off co-located with the NHRC).
  • A subsequent email from Dorpalen indicates that on April 11, 2013, he had “a meeting in the afternoon with Tom Curry from the OCC.” As Comptroller of the Currency, Curry supervises more than 2,000 national banks and federal savings associations throughout the United States.
  • A March 25, 2013, email reveals that Dorpalen sent a letter signed by 240 housing counseling agencies to CFPB’s Martinez and Muniz lobbying for an “extension of the HAMP [Home Affordable Modification Program (HAMP) and Making Home Affordable programs past the December 31, 2013 deadline” for their expiration.

Just eight weeks later, on May 30, 2013, the Obama administration announced that it had extended the programs to 2015.

  • A January 10, 2013, email indicates that Dorpalen was invited to be a panelist at a January CFPB field hearing in Atlanta, Georgia. Before the panel, Muniz apparently organized a “prep call” between Dorpalen and other attendees (including Julia Gordon, the Director of Housing Finance and Policy at the Center for American Progress) to discuss the event.

The agenda, attached to the e-mail about the call, was not provided in the response to Judicial Watch. However, the email suggests that information regarding an unspecified, proposed CFPB rule would be discussed on the call and that Muniz did not want to address the issue via e-mail.

The National Housing Resource Center is a project of the George Soros-funded Tides Foundation. It apparently began operation in early 2012 – the same time that ACORN’s previous housing-related spinoff, Affordable Housing Centers of America, closed its doors.  The NHRC operates as a lobbyist for the housing counseling industry and includes among its accomplishments the securing of $25 million in additional grant funding for housing counselors from the Treasury Department and the Troubled Asset Relief Program (TARP). NHRC Executive Director Dorpalen has visited the White House on at least five occasions, including a November 2012 meeting with National Economic Council Director Gene Sperling.

The ACORN network has a long and close relationship to President Obama.  ACORN’s efforts, many contend, to push unaffordable mortgages help contribute the recent housing market crash.

“These smoking-gun documents show the continued collusion among Obama’s Department of Housing and Urban Renewal, the controversial Consumer Financial Protection Administration and ACORN spinoffs – and strongly indicate that Barack Obama is still determined to turn the federal government’s housing policy over to the far left,” said Judicial Watch President Tom Fitton. “How is it, after the scandals of ACORN and its contribution to the housing crash, that this organization’s former leadership is still able to guide federal housing policy?  It goes to show that Barack Obama truly is the president from ACORN.”

 

 

JW Obtains Records Detailing Obama Administration’s Warrantless Collection of Citizens’ Personal Financial Data

“There is a lack of oversight of this agency by Congress, there is a lack of interest in the problem by the media class in Washington, D.C., and there is real damage being done to the privacy of the American people.”

That’s what I said during a Boise, Idaho, press conference held this week jointly with Idaho Senators Mike Crapo and Jim Risch. The purpose of the event was to “sound an alarm” about suspicious and shocking activities inside the Consumer Financial Protection Bureau (CFPB), an agency created by the Dodd-Frank Wall Street reform monstrosity.  The press conference was hosted by Sen. Crapo, who has shown admirable leadership on this issue from his perch as ranking minority member of the Senate Banking, Housing, Urban Affairs Committee.  Also joining us at the event was Idaho State Attorney General Lawrence Wasden, and John Zarian, a private attorney who has made a cause of protecting the privacy of American’s financial data.

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And what kind of suspicious and shocking activities are we talking about here?

Senator Crapo put it bluntly: “The agency is seeking to collect data about our mortgage, credit card and student loan transactions. About 80 percent of our financial transactions are being monitored and I frankly think it will soon expand to 100 percent.”

And what evidence does Senator Crapo have to support his claim? You may recall back in June, I told you about records we obtained from the CFPB, revealing that the agency has spent millions of dollars for the warrantless collection and analysis of Americans’ financial transactions. It gets worse. The documents also reveal that CFPB contractors may be required to share the information with “additional government entities.”

So, in sum, the CFPB is collecting financial data on American citizens without their knowledge and spreading it throughout our entire system of government – all under the direction and control of our Big Brother, President Obama.

Since it’s been a couple of months since we’ve discussed the records, let’s review the most important information we uncovered:

  • Overlapping contracts with multiple credit reporting agencies and accounting firms to gather, store, and share credit card data as shown in the task list of a contract with Argus Information & Advisory Services LLC worth $2.9 million.
  • Deloitte Consulting: solicitation issue date 11/30/2011, award effective date 05/29/2012;
    • Argus: solicitation issue date 02/14/2012, award effective date 03/15/2012;
    • Experian: solicitation issue date 07/03/2012, award effective date 09/24/2012.
  • A provision stipulating that “The contractor recognizes that, in performing this requirement, the Contractor may obtain access to non-public, confidential information, Personally Identifiable Information (PII), or proprietary information.”
  • A stipulation that “The Contractor may be required to share credit card data collected from the Banks with additional government entities as directed by the Contracting Officer’s Representative (COR).”

The full extent of the CFPB personal financial data collection program is revealed in a document obtained by Judicial Watch entitled “INDEFINITE-DELIVERY INDEFINITE-QUANTITY (IDIQ) STATEMENT OF WORK.”

Issued by CFPB Contracting Officer Xiaoling Ang on July 3, 2012, the IDIQ document’s stated objective: “The CFPB seeks to acquire and maintain a nationally representative panel of credit information on consumers for use in a wide range of policy research projects… The panel shall be a random sample of consumer credit files obtained from a national database of credit files.”

To accomplish this objective, the CFPB describes the scope of the program:

The panel shall include 5 million consumers, and joint borrowers, co-signers, and authorized users [emphasis added]. The initial panel shall contain 10 years of historical data on a quarterly basis [emphasis added]. The initial sample shall be drawn from current records and historical data appended for that sample as well as additional samples during the intervening years [emphasis added] to make the combined samples representative at each point in time.

The CFPB data collection program has been highly controversial since the April 2013 hearing, when Cordray disclosed elements of the venture at a Senate Banking Committee hearing. At the time, the US Chamber of Commerce accused the CFPB of breaking the law by demanding the account-level data without a warrant or National Security Letter.

Now, in the wake of the IRS scandal and National Security Agency (NSA) revelations, what was a controversy is now a full-blown scandal.

The Obama administration’s warrantless collection of the private financial information of millions of Americans is mind-blowing. Is there anything that this administration thinks it can’t do? These documents show that the Consumer Financial Protection Board is an out-of-control government agency that threatens the fundamental privacy and financial security of Americans. This is every bit as serious as the controversy over the NSA’s activities.

Of course, the key question is what can be done about it. Senator Crapo had a response:

“The most important thing I can recommend right now is to get engaged…This will probably take longer to correct that we’d like to think. But each person is not just one voice. We all have a circle of influence, we have email lists, we have Christmas card lists, we have Facebook, we have Twitter. There are many ways you can influence people and get them to weigh in. America needs to stand up and demand that Congress fix this.”

I’d add one other suggestion. Please consider supporting Judicial Watch with a tax-deductible contribution so that we can continue our efforts to expose waste, fraud and abuse inside this agency. We provide the hard evidence that Senators Crapo and Risch and others concerned about the CFPB can use to rein in this agency.

(BTW, if you’d like some more ammunition to use when crafting your calls and letters to Congress, click here and here for more examples of waste inside this reckless agency.)

One more note:  After the Boise press conference, Judicial Watch hosted a reception for local Judicial Watch members with Senator Crapo.  The turnout was fantastic (140 people in the middle of August) and it was a joy to meet so many faithful supporters of our work.  The turnout, enthusiasm, and knowledge of that Boise crowd should serve a warning to corrupt politicians everywhere – Judicial Watch members are tough and are willing to hold them personally to account to the rule of law.

Judicial Watch Obtains Documents Revealing ACORN Spinoff Received HUD Grant Despite Federal Funding Ban

ACORN is back in the news. That’s right, the supposedly defunct, defunded and bankrupt organization that fixed elections for liberal candidates is STILL alive and well.

This week we released documents from the Department of Housing and Urban Development (HUD) revealing that on February 12, 2013, HUD Deputy Assistant Secretary for Housing Counseling Sarah Gerecke may have violated federal law by requesting that $201,222.07 be transferred from the account of the defunct Affordable Housing Centers of America (AHCOA), an ACORN spinoff, to HUD intermediary Mission for Peace “to specifically pay for the activities of former AHCOA affiliates .”

According to the documents, we received pursuant to a FOIA request filed on May 16, 2013, the Gerecke memo requesting the transfer appears to have been in violation of the first continuing resolution of FY 13. That resolution continued funding levels under the FY 2012 appropriations bills, which provided that no HUD funds “made available under this Act may be distributed to the Association of Community Organizations for Reform Now (ACORN) or its subsidiaries.”

The Gerecke memo sent to Assistant Secretary for Housing-Federal Housing Commissioner Carol J. Galante, an Obama appointee, through Acting General Deputy Assistant Secretary of Housing Laura M. Marin stated:

In March 2012, HUD’s Program Support Division (PSD) received notice that Affordable Housing Centers of American (AHCOA) had closed and would no longer participate in the HUD Housing Counseling Program. Upon closing, AHCOA had a balance of $201,222.07 in its account.

The Office of Housing Counseling (OHC) is requesting to transfer, under the “replacement grant” rule, the AHCOA balance of $201,222.07 to MOP to specifically pay for the activities of the former AHCOA affiliates. PSD met with the Office of the General Counsel and the Office of Budget and Field Resources to confirm transfer was allowable.

According to records obtained by JW dated February 19, 2013, the funds were to be transferred to Mission of Peace President and CEO Reverend Elmira Smith-Vincent in Flint, Michigan. A Line of Credit Control System Treasury Detail memo obtained by Judicial Watch confirmed that the transfer had been made on February 25, 2013.

ACORN was always a twisted and convoluted web of corrupt organizations – designed this way to obfuscate their shadowy activities. And that has continued even after a series of scandals triggered the collapse of ACORN in late 2009.

At that time, what was previously called ACORN Housing was renamed Affordable Housing Centers of America in early 2010. Former ACORN Housing president Alton Bennett retained the same position with AHCOA, as did executive director Mike Shea and vice president Dorothy Amadi. Public affairs director Bruce Dorpalen was formerly ACORN Housing’s loan director.

Same people. Same corrupt mission.

Months later, in April 2010, California Rep. Darrell Issa, then the ranking Republican on the House Committee on Oversight and Government Reform, issued a Committee investigative report stating, “Committee investigators have discovered that Affordable Housing Centers of America, Inc. maintains the same Tax Identification Number as ACORN Housing, Inc., its predecessor. This means that, for tax purposes, Affordable Housing Centers of America and ACORN Housing are the same.”

According to Fox News, Issa later said, “Just as criminals change their aliases, ACORN is changing its name. But make no mistake about it, just because they change their name, doesn’t mean anything has really changed at all.”

In August 2011, after an exhaustive investigation, we released a special report on ACORN spinoffs entitled “The Rebranding of ACORN.” The report concluded, “What was previously called ACORN Housing was renamed Affordable Housing Centers of America … New and existing ACORN ‘spinoffs’ are alive and well and will surely continue to flaunt state and federal laws … In the words of [former chief executive officer of ACORN] Bertha Lewis, ‘[We have created] 18 bulletproof community-organizing Frankensteins that they’re going to have a very hard time attacking.’”

A September 21, 2010, HUD Inspector General report noted that ACORN Housing, “now operating as Affordable Housing Centers of America misappropriated funds from a $3,252,399 federal grant.” However, despite this finding, the GAO issued a conflicting advisory opinion saying that AHCOA was not, for the purposes of the funding ban, a subsidiary of ACORN.  Meanwhile, NeighborWorks America, a taxpayer-funded private/public entity, concluded that giving taxpayer funds to the ACORN-front would be in violation of federal law.

I’ve said it before and I’ll say it again: past is prologue. Barack Obama likely owes his election, if not re-election, to the nefarious activities of ACORN and ACORN spinoffs. He is truly the president from ACORN.

And at the same time we learn that the Obama administration is unleashing a vast new federal program to force “low-income” housing into every single community in America, we find out that HUD is continuing illegally to fund ACORN spinoffs committed to carrying out Obama’s dictums. This is no coincidence.  Many of the officials at HUD come out of the activist ranks of ACORN and its allies on the Left.  So they know exactly what they are doing when they play with our money and the law through this shell game.

ACORN is far from defunct. It operates now as a group of “community organizing Frankensteins” with Obama’s HUD pulling the switch and giving the organization new life.

JUDICIAL WATCH VICTORY!  Court Tosses Illegal Alien Sanctuary Policy

Let’s close with a victory, shall we?  And not just any victory, but one against the ACLU!

Last week I reported to you that JW attorneys would be in court arguing against an illegal alien sanctuary policy in the State of California, “home” to the nation’s largest population of illegal immigrants. And this week I’ve got great news to report. The good guys won! Our lead attorney Paul Orfanedes flew to LA to represent our taxpayer client, Harold Sturgeon, before the court.  As reported by The Los Angeles Daily News:

A Superior Court judge on Wednesday threw out a controversial Los Angeles Police Department policy that allowed officers to release impounded vehicles to unlicensed drivers sooner than the 30-day period spelled out under state law…

…Special Order 7, approved in April 2012, allowed vehicles to be released to unlicensed drivers without a 30-day impound if they had proof of insurance, valid identification and no previous citations for unlicensed driving, and if a licensed driver was available to drive the vehicle away.

The Los Angeles Police Protective League and the conservative government watchdog group Judicial Watch had filed suit last year to overturn the policy.  Superior Court Judge Terry Green said the city is pre-empted by the state vehicle code that spells out when cars are to be removed and for how long.

This is precisely what Judicial Watch had argued in its original complaint: “A local government has no authority to regulate or control any matter covered by the California Vehicle Code unless such authority is expressly granted by the State of California….Because the provisions of Special Order 7 are not within the purview of any express authorization granted by the State of California Defendants…were without authority to enact Special Order 7…”

Or, as JW Director of Litigation Paul Orfanedes aptly put it, Special Order 7 represented a “municipal fiat” to overturn state law and was unlawful from the start.

Folks, this is not only yet another victory for Judicial Watch against illegal alien sanctuary polices. (We’ve had our share, from shutting down illegal day labor sites, to successfully stopping taxpayer-funded benefits for illegal alien students.) It is a huge sigh of relief for the citizens of California.

After all, there was a good reason why the 30-day impound policy was in effect – to save lives!

The math here is pretty simple. More than 20% of drivers involved in fatal accidents were unlicensed drivers. A driver with a suspended license was four times more likely to be involved in a fatal accident than a properly licensed driver. Keep these cars impounded and the citizens of California are safer. (Which makes it all the more ridiculous that brass at the top of the Los Angeles Police Department sought to put an end to the policy.)

And, in case you’re wondering, illegal aliens comprise the vast majority of unlicensed drivers, which is why Special Order 7 constitutes an illegal alien sanctuary policy. Or should I say “constituted,” past tense.

I want to congratulate our legal team, led by Paul Orfanedes, for a job very well done. The illegal immigration machine is well funded and aggressive and it is no easy task to beat them in the courts – even when you have the law on your side.  The other side, the ACLU and the City of Los Angeles, will try to appeal and delay the overturning of the illegal Special Order 7, but you can be sure that we continue the battle, too.

I also encourage you to review the transcript of this week’s hearing before Superior Court Judge Terry Green.  One section in particular caught my eye, as it evidences the very model of judicial restraint:

The Intervenors and others made arguments, the ACLU made arguments, that were more in the line of policy arguments.  And, you know, it may be good policy. I’m not here to discuss whether a policy is a good policy or a bad policy. We don’t do public policy here in the Superior Court. We just [examine] laws and decide disputes.

When I was reading it, I said that makes sense, I can see your point of view. But isn’t that why we have a legislature. Isn’t that why we elect representatives, Assemblymen or Assembly persons or Senators and elect a Governor that is why they are there. You can make your pitch to these people. I don’t think the legislature and the Governor are necessarily hostile to your position ab initio.

So maybe you can carry the day in a public debate, but I don’t know that it’s my place as  a judge to make those, well, I do know, it’s not my place as a judge to make those policy determinations.

As you can see, all is not lost with our nation’s judiciary!

Until next week…

Judicial Watch recently obtained documents showing the Consumer Financial Protection Bureau (CFPB) has not curbed its spending on high-priced classes.  Records obtained on July 3, 2013 responsive to a June 4, 2013 records request show that the agency is shopping for in-house Harvard-style “leadership” classes for its General Counsel Meredith Fuchs, among other top brass.

Indeed, in a May 20, 2013 email, CFPB Learning Solutions Program Manager Matt Sacco tells CFPB Procurement Officer Elie Stowe that the agency has “two ranges of programs planned from [Harvard Kennedy School of Government] planned for Senior Managers and above at CFPB:

  • For select CFPB Senior Managers – HKSG – “Strategic Management of Regulatory Enforcement Agencies” – $6,900 [and similar HKSG course(s), at similar costs]
  • For select CFPB Executives – HKSG – “Senior Leaders in Government” – $17,400 [and similar HKSG course(s), at similar costs]”

This phase of Judicial Watch’s ongoing investigation into CFPB’s spending practices was prompted by a “pre-solicitation notice” published by Stowe at www.fedbizopps.gov.  Pre-solicitation notice number CFP-13-P-00039 sought “quotes for various Senior/Executive Manager workshops similar to the Harvard Kennedy School of Government programs.”  Pursuant to the Freedom of Information Act (FOIA), 5 U.S.C. sec. 552, Judicial Watch requested all communications, budget information, and policy guidance on the notice from October 1, 2012 through the present.  In response, the  agency produced 29 barely legible, heavily redacted pages.

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This disclosure follows earlier instances of questionable CFPB spending which Judicial Watch has exposed, including a $479,354 bill for sign language translation services to assist two entry level employees and a “Banking Law Fundamentals” class at George Washington University for the agency’s top attorneys. Judicial Watch obtained the records pursuant to two separate Freedom of Information Act (FOIA) requests submitted to the CFPB on June 18, 2012.

With respect to the banking class, Judicial Watch filed its FOIA request after finding a May 31, 2012, purchase order published at www.usaspending.gov indicating the CFPB paid George Washington University $4,500 in class tuition on behalf of six employees to attend the “Banking Law Fundamentals” class. Responsive documents included training authorization forms as well as internal emails seeking approval to enroll in the course at agency expense.

According to the records, the purpose of the George Washington University course, which took place on June 8, 2012, was to “familiarize participants with the basics of banking law.”  Topics included, “The structure and purpose of bank regulation.”

In pursuing the invitation to enroll, Enforcement Attorney Christina Coll emailed Acting Litigation Deputy Deborah Morris on May 4, 2011, saying: “This looks like an awesome agenda for a banking world novice like me.” While Ms. Coll’s salary is unknown, according to records previously uncovered by Judicial Watch, other Enforcement Attorneys received starting salaries as high as $173,000 per year.

The fact that CFPB paid to train its attorneys in banking law fundamentals at taxpayer expense appears to contradict congressional testimony in 2011 by then-interim CFPB head, now U.S. Senator for Massachusetts, Elizabeth Warren regarding the experience level of the agency’s highly paid attorneys.

During a May 24, 2011, hearing, then-U.S. Rep. Ann Marie Buerkle asked why starting salaries at the agency exceeded Office of Personnel Management (OPM) standards by up to 90%: “How do you justify that kind of a disparity in salaries between a government worker and the folks that are going to be hired by your regulatory agency?” asked Rep. Buerkle. Warren defended the salaries, saying the consumer bureau is competing with the financial services industry for talent and “we’ll never be able to pay like the financial services industry pays.”

Regarding the translation services, Judicial Watch uncovered records indicating the agency spent $479,353 to help resolve two entry-level employees’ communications issues. On April 12, 2012, the CFPB paid $465,764 for sign language translation services from the date of the purchase order through the end of the year. The agency had spent $13,590 earlier in the year, including $1,185 for the interpreter’s gas mileage.

Warren, now serving on the U.S. Senate Banking Committee, was a professor of law at Harvard University prior to joining the CFPB then running for Congress.  As a result of another aspect of Judicial Watch’s investigation into the agency, the Senate Banking Committee this week directed the U.S. Government Accountability Office (GAO) to investigate the scope and legality of CFPB’s data collection activities.

 

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(Washington, DC)Judicial Watch announced today that it has obtained records from the Consumer Financial Protection Bureau (CFPB) revealing that the agency has spent millions of dollars for the warrantless collection and analysis of Americans’ financial transactions. The documents also reveal that CFPB contractors may be required to share the information with “additional government entities.”

The records were obtained pursuant to a Freedom of Information Act (FOIA) request filed on April 24, 2013, following the April 23 Senate Banking Committee testimony of CFPB Director Richard Cordray. The documents uncovered by Judicial Watch include:

  • Overlapping contracts with multiple credit reporting agencies and accounting firms to gather, store, and share credit card data as shown in the task list of a contract with Argus Information & Advisory Services LLC worth $2.9 million
  • Deloitte Consulting: solicitation issue date 11/30/2011, award effective date 05/29/2012;
    • Deloitte Consulting: solicitation issue date 11/30/2011, award effective date 05/29/2012;
    • Argus: solicitation issue date 02/14/2012, award effective date 03/15/2012;
    • Experian: solicitation issue date 07/03/2012, award effective date 09/24/2012
  • A provision stipulating that “The contractor recognizes that, in performing this requirement, the Contractor may obtain access to non-public, confidential information, Personally Identifiable Information (PII), or proprietary information.”
  • A stipulation that “The Contractor may be required to share credit card data collected from the Banks with additional government entities as directed by the Contracting Officer’s Representative (COR).”

The full extent of the CFPB personal financial data collection program is revealed in a document obtained by Judicial Watch entitled “INDEFINITE-DELIVERY INDEFINITE-QUANTITY (IDIQ) STATEMENT OF WORK.”  Issued by CFPB Contracting Officer Xiaoling Ang on July 3, 2012, the IDIQ document’s stated objective: “The CFPB seeks to acquire and maintain a nationally representative panel of credit information on consumers for use in a wide range of policy research projects… The panel shall be a random sample of consumer credit files obtains from a national database of credit files.”

To accomplish this objective, the CFPB describes the scope of the program accordingly:

The panel shall include 5 million consumers, and joint borrowers, co-signers, and authorized users [emphasis added]. The initial panel shall contain 10 years of historical data on a quarterly basis [emphasis added]. The initial sample shall be drawn from current records and historical data appended for that sample as well as additional samples during the intervening years [emphasis added] to make the combines sample representative at each point in time.

The CFPB data collection program has been highly controversial since the April 2013 hearing, when Cordray disclosed elements of the venture at a Senate Banking Committee hearing. At the time, the US Chamber of Commerce accused the CFPB of breaking the law by demanding the account-level data without a warrant or National Security Letter.

“The Obama administration’s warrantless collection of the private financial information of millions of Americans is mind-blowing.  Is there anything that this administration thinks it can’t do?” said Judicial Watch President Tom Fitton. “These documents show that the Consumer Financial Protection Board is an out-of-control government agency that threatens the fundamental privacy and financial security of Americans. This is every bit as serious as the controversy over the NSA’s activities.”

CFPB is a federal agency launched on July 21, 2011 by the Dodd-Frank Wall Street Reform and Consumer Protection Act. It is funded through the Federal Reserve (in an amount equal to 10% of the Federal Reserve’s budget), alleviating it from congressional oversight through the ordinary appropriations process.

On Thursday, June 7, 2012 Judicial Watch sued the Consumer Financial Protection Bureau (CFPB) for release of documents requested on January 12 and January 25 relating to Richard Cordray’s appointment as the agency’s director without Senate confirmation. In response to the lawsuit, the agency produced a dozen pages of responsive documents, supplementing a March 30 initial production of 222 pages. The supplemental release (described by the agency as final with respect to this matter) came via emails to Judicial Watch sent at 9:59 p.m. and 10:19 p.m. on Friday, June 8th. The new documents reveal that:

  • A Barney Frank staffer named Kate harbored unanswered questions regarding the president’s legal authority to appoint a CFPB director in the manner that he did. The actual questions are redacted from the documents CFPB produced. However, many legal analysts have said that, even assuming the Senate was in recess at the time of the appointment the way the President characterized it, the CFPB did not have a vacancy for purposes of the Constitution’s recess clause because, as a new agency, it had not yet had a director. (CFPB-2012-037, p. 10-11).
  • President Obama contracted with a vendor untold funds to hold an event (likely Cordray’s swear-in ceremony) in the CFPB amphitheater on Friday, January 6th. Equipment included six to eight folding tables, making it likely that 30 or more people attended the event, although no pictures have yet to be disclosed. (CFPB-2012-042, p. 4).

The following column by Congressman Spencer Bachus (AL -6) advocates this appointment was inconsistent with the Constitution. Congressman Bachus is Chairman of the House Financial Services Committee. Click here for the column.

Consumer Financial Protection Bureau (CFPB)  released on September 28, 2012 an additional 17 pages in full and 8 pages in part pursuant to a Freedom of Information Act (FOIA) lawsuit filed against the agency by Judicial Watch, Inc. on June 7, 2012.  The FOIA sought all records surrounding Richard Cordray’s “recess” appointment as director of the new agency, created under the auspices of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

Along with its disclosure of 25 pages, CFPB admitted to withholding 880 pages more, citing unexplained confidentiality, privacy, and law enforcement concerns.  In support of this decision, the agency wrote:

Pursuant to our agreement, the Consumer Financial Protection Bureau (“Bureau”) has conducted an additional search for records responsive to your client’s Freedom of lnformation

Act requests dated January 12, 2012, and January 25,2012. Attached to this letter, please find an additional 25 pages of records responsive to your requests. Of these records, the Bureau has

determined that 17 pages are releasable in full and that 8 pages are releasable in part pursuant to 5 U.S.C. § 552(b)(5) and/or (b)(6). An additional 880 pages have been withheld in full pursuant to 5 U.S.C. § 552(b)(5), (b)(6), and/or (b)(7).

 

CFPB has until October 26 to justify its withholdings in court.

“There is a chance…that the appointment would be invalidated by a court.” 

Cordray Told Staff His Short Stint “should give to each one of us…a fierce urgency to accomplish the work we are doing together.” 

(Washington, DC) –Judicial Watch, the organization that investigates and fights government corruption, announced today that it has obtained documents from the Consumer Financial Protection Bureau (CFPB) that indicate the agency’s director, Richard Cordray, doubted the constitutionality of his own appointment. On January 4, 2012, President Obama announced that he was using a “recess appointment” to install Corday as head of CFPB even though the U.S. Senate was in session and, therefore, retained its constitutionally mandated “advise and consent” role for all presidential appointments. Cordray was then sworn in on January 24, 2012.

Judicial Watch obtained 222 pages of records pursuant to the Freedom of Information Act (FOIA).  Some of these documents reveal that Cordray believed that his appointment could be invalidated by a court:

  • In his February 6, 2012, “Weekly Message,” to the CFPB staff, Richard Cordray acknowledged that his appointment as the agency’s director without Senate approval was vulnerable to legal challenge: “There is a chance (a minor chance in my view, though everyone is entitled to his or her own opinion) that the appointment would be invalidated by a court.”
  • In the same February 6, 2012, message Cordray also stated, “the fact that this appointment is for two years (and in some conceivable circumstances it could be shorter) does matter in one important respect…This time period should give to each one of us, and not only me, a fierce urgency to accomplish the work we are doing together.”

When Barack Obama announced his decision to install Cordray as head of the CFPB, the president called the move a “recess appointment.”  However, at the time, Congress was still in session. Article I, Section 5, Clause 4 of the U.S. Constitution provides that: “Neither House, during the Session of Congress, shall, without the Consent of the other, adjourn for more than three days ….”  To prevent any recess appointment, the Republican-controlled House refused to consent to Senate adjournment, resulting in the Senate’s coming into session every three days.

“Many have doubts about the constitutionality of Richard Cordray’s appointment.  Now we know those doubts are shared by Cordray himself.  These astonishing documents provide further evidence that Obama’s recess appointment of Cordray was an abuse of office,” stated Tom Fitton, Judicial Watch president.

Records Show Workers Starting at Twice the Maximum Pay Specified by the Office of Personnel Management

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Washington, DC — October 25, 2011
Judicial Watch, the public interest organization that investigates and prosecutes government corruption, announced today that it has obtained documents revealing the generous salaries and bonuses being paid to government workers in such agencies as the newly created Consumer Financial Protection Bureau (CFPB) and the U.S. Commodity Futures Trading Commission (CFTC). The documents were obtained by Judicial Watch in response to Freedom of Information (FOIA) requests filed on July 12, 2011 with the two agencies, as well as with the Federal Reserve, Office of the Comptroller of the Currency (OCC), U.S. Treasury, and the Securities & Exchange Commission (SEC).
The FOIAs requested Standard Forms 50 (SF-50s) from each of the agencies. An SF-50 is a human resources form that documents any change in a government worker’s employment situation, including pay. The following responses were received:
  • The CFPB responded on August 4, 2011, the SF-50s revealing CFPB workers being hired at salaries twice the maximum ordinarily allowed under guidelines published each year by the Office of Personnel Management. A dozen new hires take home more than $225,000 a year, and a student intern is currently being paid $42,036 “through completion of education & study” as a communications trainee.
  • The CFTC responded on September 12, 2011, but blocked out most of the information on the 26 forms provided. The documents, however, reveal that the agency has instituted a cash award bonus system, and during the first six months of 2011, the agency doled out from $400 to $5,000 in bonus income to employees already earning $225,000 or more per year.
  • The Federal Reserve, responding on August 25, 2011, denied using SF-50s, despite an apparent statutory requirement to do so. It also refused a subsequent request for “Transcripts of Service,” which the agency said it used instead of SF-50s.
  • The OCC responded on August 22, 2011, the SF-50s indicating that 85 workers earn $225,000 or more per year. The employee names, as well as the legal authority under which the pay raises were issued, were blotted out.
  • The U.S. Department of the Treasury, responding on August 25, 2011, indicated that two employees earn more than $225,000, but withheld their names.
  • The SEC responded on October 3, 2011, reporting that 103 workers earn $225,000 or more per year.

Judicial Watch filed administrative appeals regarding the withholding of information by the U.S. Commodity Futures Trading Commission, the Office of the Comptroller of the Currency, and the U.S. Department of the Treasury.“These new salary records are bound to cause controversy. No wonder Washington DC is the wealthiest area of the country,” said Tom Fitton, president of Judicial Watch. “And the secrecy surrounding basic salary information of public employees shows an arrogance of power and contempt for transparency in an administration that promised the very opposite.”

Documents Uncovered

Raise Questions About Consumer Czar Elizabeth Warren’s Congressional Testimony

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Press Office 202-646-5172, ext 305

Washington, DC — June 16, 2011
Judicial Watch, the public interest group that investigates and prosecutes government corruption, announced today that it has uncovered documents indicating the Consumer Financial Protection Bureau (CFPB) headed by interim “Consumer Czar” Elizabeth Warren has been intensely involved in a 50-state settlement underway with the nation’s largest mortgage lenders related to alleged improper foreclosure procedures. The documents, obtained in response to open records requests with CFPB and the offices of attorneys general from all 50 states, seem to contradict Warren’s statements before Congress suggesting her office responded to requests for advice, but did not seek to push its views. Judicial Watch initiated its investigation into the controversies surrounding Ms. Warren and the CFPB on March 22, 2011.
During a March 16, 2011, hearing of the House Financial Services Subcommittee on Financial Institutions and Consumer Credit, Ms. Warren characterized her agency’s involvement in the state settlement negotiations: “We have been asked for advice by the Department of Justice, by the Secretary of the Treasury, and by other federal agencies. And when asked for advice, we have given our advice.” However, emails obtained by Judicial Watch from several states suggest her agency’s participation was far more intense and aggressive. Warren called emergency meetings by phone and in person with attorneys general nationwide to contribute unsolicited input on the matter. The documents also indicate that Warren’s office insisted on keeping its contact with the state attorneys general secret.
For example, in a February 25, 2011, email to the Executive Committee of the National Association of Attorneys General (NAAG), Iowa Assistant Attorney General Patrick Madigan wrote: “Elizabeth Warren would like to present the CFPB’s view on loan modifications.” And two weeks earlier, a similar email was distributed to NAAG’s Loss Mitigation Subgroup on Warren’s behalf. In an email on February 15 regarding that meeting, Madigan points out that “The CFPB wanted me to stress the confidential nature of this briefing.”
The March 22, 2011, FOIA request to the CFPB for all records of Warren’s communications with each state’s attorney general produced a single heavily-redacted document respecting a February 24 meeting with Illinois Attorney General Lisa Madigan.
But state attorneys general nationwide have supplied dozens of documents to Judicial Watch showing contact between their offices and Warren’s, including emails establishing closed-door meetings between Warren and New York Attorney General Eric Schneiderman on February 14 and March 7. Several states refused to turn over responsive documents in their possession based on confidentiality concerns arising from, as the State of Colorado put it, “the Consumer Financial Protection Bureau’s participation in the ongoing investigation into bank and loan servicers mortgage processes.”
The CFPB is a new federal agency arising out of the Dodd-Frank Wall Street Reform Act. The new agency officially gains its authority under the law on July 21, 2011.
“The Consumer Financial Protection Board is being born in an atmosphere of secrecy and cover-up,” said Judicial Watch President Tom Fitton. “And the fact that the CFPB has been unwilling to abide by FOIA law certainly makes it appear the agency has something to hide from the American people. Given Warren’s radical tendencies and the fact that she was not subject to vetting by the U.S. Senate, we need absolute transparency from the CFPB, an agency which will give the federal government an unprecedented level of control of the private sector.”
Elizabeth Warren, an ardent “progressive,” was named by President Obama as the interim head of the CFPB to avoid the likelihood of her not being confirmed by the U.S. Senate because of her left-of-center views. For example, in a blog she authored on the mortgage lending industry, Warren wrote, “…big corporate interests, led by the consumer finance industry, are devouring families and spitting out the bones.”
(Judicial Watch and other open government advocates were invited to meet with Ms. Warren to discuss transparency and other policy issues on April 16, 2011.)

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