April 23, 2010

From the Desk of Judicial Watch President Tom Fitton:

Beware Obama Financial “Reform”

Here’s one early lesson we’ve learned from the Obama administration: Beware the word “reform.” First there was Obamacare, which was nothing more than a government takeover of our nation’s health care system masquerading as “reform.” And now the Obama administration has set its sights on “reforming” Wall Street. In fact, on Thursday, the President took to the pulpit in New York, just blocks from Wall Street, to pitch his vision for so-called reform in a high profile speech.

No matter what Obama says, this much we know — his ultimate goal is to increase government control of the private sector. And he’s trying to do it quickly, before the elections this fall, just in case Democrats lose control of Congress and the mood in Washington further sours for the President and his statist agenda.

Throughout the debate over financial reform legislation, Republicans and Democrats have been in a heated contest to see which party can claim the mantle “tough on Wall Street.” According to The Associated Press:

If there’s any election-year support in the Senate for future bailouts of the big banks on Wall Street, it isn’t immediately apparent.

Instead, President Barack Obama and his Democratic allies compete daily with Republicans for the title of opponent in chief, and six months before midterm elections the fate of legislation to regulate the financial industry remains clouded.

Democratic legislation “not only allows for taxpayer-funded bailouts of Wall Street banks; it institutionalizes them,” Senate Republican leader Mitch McConnell of Kentucky said recently.

Obama responded a few days later in his weekly radio and Internet address, accusing McConnell and another top Republican of meeting with Wall Street executives to discuss ways to block the legislation…

Now, however, with members of both parties eager to redirect populist angst somewhere else — anywhere else — it appears some Republicans will join Democrats to get a bill passed through the Senate. I doubt any Republican filibuster will hold and will result, at best, in making any final bill only slightly less monstrous. And this is the worst possible news for American taxpayers. The financial reform package is a complicated piece of legislation, so I cannot go into all of the details in this space, but here are just two items that have been discussed: A $50 billion “bailout fund” for big Wall Street firms that would be denied to small and mid-size firms and a new Consumer Financial Protection Agency that could exert control over vast new areas of the private economy.

Whether these items make it into the final bill matters little, and Judicial Watch doesn’t have a specific view on any particular financial reform legislation. But conservative principles and experience ought to point to real reforms that minimize regulation, minimize taxpayer risk, and get the government out of the business of forcing lenders to continue subsidizing risky mortgages.

The fact is we can’t trust either party meddling in Wall Street’s business. We already saw how that went with Fannie Mae, Freddie Mac, and the government-policy-caused sub-prime mortgage meltdown. According to CBS News: “In recent months, lawmakers from both parties have held ‘at least three dozen fund-raising events’ with representatives from Goldman Sachs Group Inc., J.P. Morgan Chase & Co. and Morgan Stanley, three Wall Street titans with a heavy stake in the financial industry reform legislation now being considered in Congress.”

In this age of Obama and Bailout Nation, these major financial institutions are, in effect, creatures of the state. And politicians, especially those politicians comfortable with the government running our economy, are happy to take the tribute these companies pay their political masters in the form of campaign donations.

President Obama, for his part, has been rightly ridiculed as a hypocrite. Not only was Goldman Sachs Obama’s second biggest campaign contributor, but as Michelle Malkin astutely observed in her column this week: “While President Obama assails the culture of greed and recklessness practiced by the men of Goldman Sachs, his administration is infested with them. The White House can no more disown Government Sachs than the-Boss-in-chief can disown Chicago politics.”

I will add that none other than the thoroughly corrupt Senator Chris Dodd (D-CT) and Representative Barney Frank (D-MA) are the point men on the financial “reform” effort. They both made it on to our list of Washington’s “Ten Most Wanted Corrupt Politicians” for 2009. In fact, we exposed just a few weeks ago how Frank improperly intervened in bank bailouts.

Sure enough, in a shameless display of political gamesmanship, the Obama SEC announced this week that it was going after Goldman Sachs for various offenses in a strict party line 3-2 vote. Judicial Watch is already investigating whether there are any shenanigans behind this government prosecution.

I have little doubt financial reform of some kind will make its way through Congress and onto the President’s desk for his signature. But remember the documents we uncovered where Bush Treasury Secretary Hank Paulson told the nation’s top bank executives “take the government investment or else?” That was only the beginning. First AIG, then the car companies, then health care, now Wall Street (and any other business that issues credit) — is there no end to this government’s voracious appetite for command and control?

To let your senators know what you want out of financial reform, call them directly at 202-224-3121.

JW Files Lawsuit against FBI for Documents on Late John Murtha’s Scandals

Congressman Murtha may no longer be with us, but there are important lessons to be learned from the long legacy of corruption he left behind.

And for this reason, we filed a lawsuit against the FBI this week for stonewalling the release of documents regarding Murtha’s history of allegedly corrupt behavior, including his connection to the ongoing FBI probe of a congressional earmarking scandal involving the now defunct PMA Group.

According to the federal lawsuit, filed on April 15th in the United States District Court for the District of Columbia:

“Starting in the mid-1970s until his death, Representative Murtha has been known for his allegedly corrupt practices as well as his inflammatory and controversial statements. During the Abscam sting operation, he was caught on tape allegedly offering political concessions for cash. More recently, Representative Murtha was being investigated for his ties to the PMA Group, a now defunct lobbying group…In a final effort to investigate and report on Representative Murtha’s lack of ethics and his abuse of office for more than 25 years, on February 9, 2010 [Judicial Watch] sent a FOIA request to [the FBI] seeking access to any and all records concerning, regarding or relating to John Patrick Murtha.”

The FBI acknowledged receiving our request on February 18, 2010, but the agency failed to reply within the statutorily allotted 20-day period. To date, the FBI has released no documents in response to Judicial Watch’s request and has failed to demonstrate that documents are exempt from production.

Now, as we noted in our complaint, Murtha was a regular on Judicial Watch’s “Ten Most Wanted Corrupt Politicians” and was most recently featured on Judicial Watch’s 2009 list for his connection to the PMA Group scandal.

PMA, founded by a former Murtha associate, was the late congressman’s largest campaign contributor. Murtha raised $1.7 million from PMA and its clients between 2002 and the time of his death, proposing tens of millions of dollars in earmarks for the benefit of PMA. Even following an FBI raid of PMA’s offices in 2009, Murtha continued to seek congressional earmarks for PMA clients, while also requesting campaign contributions.

Press reports linked six other Members of Congress to the PMA Group scandal, including Peter J. Visclosky (D-IN), James P. Moran Jr. (D-VA), Norm Dicks (D-WA.), Marcy Kaptur (D-OH), C.W. Bill Young (R-FL) and Todd Tiahrt (R-KS). The House Ethics Committee recently — and controversially — found no wrongdoing, but the FBI investigation continues.

In my view, the fact that the House Ethics Committee whitewashed the PMA Group scandal makes Judicial Watch’s investigation all the more important. Few trust the House Ethics Committee to take meaningful action against members of Congress. Indeed, the House Ethics Committee is notorious for letting corrupt congressmen off with a slap on the wrist.

That’s why we’re trying to get our hands on these documents. We plan to use them to complete the public record on Murtha’s long history of corrupt activities — and to learn how this history reflects upon the ethics of Congress.

Leave it to the allegedly “transparent” Obama administration, by the way, to stonewall this basic open records request. Let’s hope the court reminds the Obama administration that it is not above the law.

Obama Administration Tries to Roll Back Open Records Reform

On April 19, Judicial Watch lawyers presented oral arguments to the U.S. Court of Appeals for the District of Columbia Circuit against the Obama administration’s subversion of the transparency law known as the Freedom of Information Act (FOIA). Here’s the bottom line. According to changes in FOIA law signed by President Bush in 2007 under the Open Government Act, the federal government owes Judicial Watch attorneys’ fees for dragging its feet in releasing documents related to a suspicious real estate deal involving Senator Harry Reid. Lawyers for the Obama administration don’t want to pay up and they have taken their battle to the appellate court.

Now the total amount owed to Judicial Watch is only $3,605.57. But it’s not the money that is important here. It’s the principle.

The Obama administration, once again demonstrating hostility toward open records law, wants to make it more difficult for petitioners to recover their costs when the government improperly withholds records. The administration seems to hope that the prospect of expending resources fighting the government will dissuade Americans from pursuing open records requests. And the administration can therefore continue to operate in secret.

In this particular case, the Bureau of Land Management (BLM) stonewalled Judicial Watch’s open records request for six months, promising time and time again to produce the records. They never did. Not until Judicial Watch filed a lawsuit. And then, lo and behold, records showed up on Judicial Watch’s doorstep two weeks later. But the point is Judicial Watch should not have had to expend the resources to force BLM to do its job.

Prior to the changes in FOIA law signed by President Bush, attorneys’ fees could only be recouped if the court ordered the agency to release the documents. However the new law allows for the collection of attorneys’ fees if there is a “a voluntary or unilateral change in position by the agency.” In this case, the BLM changed its tune after Judicial Watch filed its lawsuit.

Now the Obama administration is asking for the strictest interpretation possible here, claiming that Judicial Watch must prove the lawsuit caused the documents to be released. (White House lawyers have assigned the fancy term “catalyst theory” to this line of reasoning.) In our view, the mere fact that we filed the lawsuit and then the documents were released entitles JW to the fees.

As noted by the lower court in its ruling in favor of Judicial Watch: “[Judicial Watch] may not have received an appropriate response to its FOIA request absent the filing of the lawsuit. Indeed, [BLM] had committed to releasing information four separate times, and it had each time reneged without any meaningful explanation. In sharp contrast to its lackadaisical response throughout the previous six months, [BLM] disclosed the requested documents shortly after this action was commenced by [Judicial Watch].”

This is a clear cut case of cause (lawsuit) and effect (documents released), and we hope the court sees it that way. Ironically, if the Obama administration loses, it may end up owing Judicial Watch nearly 10 times the amount in attorneys’ fees we asked for at the start of this dispute.

This latest Judicial Watch court battle is more evidence of Obama’s “big lie” about his supposed commitment to transparency. The Obama crowd is now trying to roll back an expansion of FOIA by President Bush! I’ll be sure to let you know what the court rules.

Until next week…

Tom Fitton
President

Judicial Watch is a non-partisan, educational foundation organized under Section 501(c)(3) of the Internal Revenue code. Judicial Watch is dedicated to fighting government and judicial corruption and promoting a return to ethics and morality in our nation’s public life. To make a tax-deductible contribution in support of our efforts, click here.

Judicial Watch on Twitter | Judicial Watch on Facebook

Judicial Watch on YouTube | Judicial Watch RSS