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Judicial Watch • Jw v Treasury Opp2mot4sj 02252011

Jw v Treasury Opp2mot4sj 02252011

Jw v Treasury Opp2mot4sj 02252011

Page 1: Jw v Treasury Opp2mot4sj 02252011


Number of Pages:18

Date Created:March 17, 2011

Date Uploaded to the Library:February 20, 2014

Tags:Opp2mot4sj, 02252011, treasury

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vs. Civil Action No. :09-CV-1508 (BAH) 

Plaintiff Judicial Watch, Inc., counsel and pursuant Rule 56(c) the Federal Rules Civil Procedure, hereby submits this opposition Defendant Department Treasury's 
("DOT's") supplemental motion for summary judgment. grounds therefor, Plaintiff states 
The instant motion concerns the technical application several Freedom Information 
Act exemptions relative handful documents. bottom however, this Freedom 
Information Act ("FOIA") case concerns Plaintiff's efforts obtain information about possible 
misuse taxpayer money from the Troubled Asset Relief Program ("TARP") assist 
financial institution favored members Congress, OneUnited Bank ("OneUnitcd"). While possible that misconduct actually occurred this matter, the public has right fall 
disclosure about how and why the foderal government distributed taxpayer money this 
troubled bank. Background TARP and OneUnited Bank. 
TARP was created sho1tly after Congress enacted the Emergency Economic Stabilization Act ("EESA") October of2008, response severe economic crisis. See Motion for Summary Judgment the U.S. Department Treasury, Docket No. 15, ("Def. Mot.") The EESA created the Office Financial Stability ("OFS") within DOT, which implements TARP. Id. TARP turn authorized the government invest mortgage backed securities, corporate debt, or, the case OneUnited Bank, stock, strengthen the capital base qualified financial institutions and increase market confidence the entire banking system. Def. Mot. (emphasis added). Through TARP, DOT ultimately purchased $12,063,000 OneUnited Bank's preferred stock December 19, 2008. Id. 
Defendant's summary judgment motion does adequate job explaining the creation and implementation TARP. However, the motion omits several critical facts that demonstrate that the use TARP funds pwchase OneUnited stock was extremely unusual, and possibly, improper use those funds. 
First, OneUnited was under heavy scrutiny both the FDIC and Massachusetts regulatory officials the months before received its TARP funds. Specifically, October 27, 2008, the bank was issued cease and desist order regarding executive compensation abuses including, among other things, the use new Porsche for bank execuUves. See Damian Paletta and David Enrich, Political Interference Seen Bank Bailout Decisions, Wall Street Journal, January 22, 2009 Al. 
Second, OneUnited received TARP funds despite being under exceptionally severe financial distress. TARP was intended encourage fundamentally healthy banks restart 
lending, whereas distressed loans One United increased 66% the 4th quarter 2008, right around the time OneUnited received its bailout. See Tim McLaughlin, One United's Bad Loans Spiked Q4, Boston Business Journal, January 29, 2009. the end of2008, the number ofOncUnited loans actually delinquent nearly doubled from 2.6% 4.5%. Id. 
Third, least two politicians interceded OneUnited's behalf effort secure TARP funds for the bank. Congressman Barney Frank (D-MA) has admitted that spoke federal regulators urging that OneUnited least considered for TARP funds. Paletta and Enrich, supra; see also Michael Kranish and Ross Kerber, Frank Tried get Hub Bank Bailout, The Boston Globe, January 23, 2009. Subsequent media reports revealed that Congressman Maxine Waters (D-CA), who once owned stock OneUnited, contacted the Treasury Department September of2008 set meeting which executives OneUnited made highly unusual request for $50,000,000 federal assistance. See Susan Schmidt, Waters llelped Bank Whose Stock She Once Owned, The Wall Street Journal, March 
12, 2009; see also Eric Lipton and Jim Ruttenbcrg, Representative, Her Ties and Bank Meeting, The New York Times, March 13, 2009.1 OneUnited did not receive any federal funds 
immediately following this September 2008 meeting, but did receive such funds several 
months later, after the creation ofTARP. 
Finally, OneUnited missed seven eight the quarterly dividend payments was required make DOT pay back the funds received from TARP, including the last seven payments row. Todd Wallack., Bank Misses Seventh Dividend Payment, The Boston Globe, December 14, 2010. OneUnited's failure reimburse taxpayer bailout money thus raises fu11her 
until early 2008, and reportedly still owns $250,000 One United stock 2009. Lipton and 
Ruttenberg, supra. 
questions about whether OneUnited should have received federal assistance the lirst place. light these facts, which are clearly great importance and interest the public, much 
infonnation possible about the government's decision distribute TARP fonds OneUnited 
Bank should made available for public scrutiny. Plaintifrs FOIA Request. furtherance its investigation into OneUnited's receipt ofT ARP funds, January 23, 2009, Plaintiff sent Defendant, certified U.S. mail and facsimile, FOIA request seeking access any and all records concerning relating the following topics: Any and all records concerning evaluation procedures for federal banking agencies and the Treasury Department distribute/award TARP Funds (Trance Report Congress for the Period Through November 14, 2008 states page "Treasury has worked with the Federal banking agencies establish streamlined evaluation procedures;" disclosure should include copy evaluation procedures produced federal banking agencies, any concspondence between the Treasury and any fodcral banking agencies concerning such procedures, memos, briefing materials, etc). 
Correspondence with Congressman Darncy Frank any representative his Office concerning TARP Funds and/or any bank Massachusetts. 
Any and all records concerning OneUnited Bank Boston, Massachusetts (including correspondence from any lobbyist, correspondence from any other government agency, correspondence with any elected official, correspondence directly with the Rank, the Bank's application for TARP funds, etc). 

See Exhibit the Declaration Joseph Samarias, attached Def. Mot. Exhibit ("'Samarias Dec."). letter dated February 11, 2009, Defendant acknowledged receipt Plaintiffs FOIA request and granted itself ten 10) day extension time respond the request. See Complaint March 31, 2009, approximately weeks after Defendant's response was due, Plaintiff sent Defendant letter inquiring about the status Plaintiff's January 23, 2009 
FOTA request. See Complaint tj[9. Defendant acknowledged receipt Plaintiff's March 31, 2009 letter April 2009. Id. However, the Jetter did not include any responsive documents, nor did state when Plaintiff could expect receive substantive response. Id. Plaintiff was 
forced file this lawsuit when Defendant failed respond Plaintiff's request August 
2009 and gave indication Plaintiff when could expect receive substantive response. 
After this lawsuit was filed, the parties entered into negotiations regarding document 
production. Pursuant these negotiations and the Court' November 18, 2009 Minute Order, 
Defendant produced approximately 596 pages ofresponsive documents whole part 
Plaintiff December 2009. Def. Mot. 7-8. Defendant made subsequent, discrntionary 
release ofan additional pages documents February 23, 2010. Jd. After further 
negotiations, the parties narrowed the scope documents issue specific documents totaling approximately pages. Id. Defendant then moved for summary judgment June 2010. September 13, 2010, after Defendant's initial motion for summaryjudgment had been 
futly briefed, Defendant info1med Plaintiff that had discovered additional pages 
responsive records, which released Plaintiff with some information redacted. See Defendant's Supplemental Motion for Summary Judgment ("Def. Supp. Mot.") Further negotiations between the parties narrowed six the number pages remaining dispute. Id. 

FOIA generally requires complete disclosure requested agency information unless the 
information falls into one ofFOlA's nine clearly delineated exemptions. U.S.C.  552(b); see 
also Department the Air Force Rose, 425 U.S. 352, 360-61 (1976) (discussing the history and purpose ofFOTA and the structure FOTA exemptions). light FOIA.'s goal promoting general philosophy full agency disclosure, the exemptions arc construed 
narrowly. United States Dep