New financial regulation reform bill exempts SEC from FOIA

posted at 10:55 am on July 28, 2010 by Ed Morrissey

When Barack Obama signed the new financial-regulation reform bill into law, its supporters claimed it as a victory for transparency and accountability.  That may be true for Wall Street, although debatable, but it’s not true for government and the regulatory regime it enhanced.  The SEC now claims that the bill has given them an exemption from Freedom of Information Act requests, the very device by which citizens and media force transparency in the halls of power:

Under a little-noticed provision of the recently passed financial-reform legislation, the Securities and Exchange Commission no longer has to comply with virtually all requests for information releases from the public, including those filed under the Freedom of Information Act.

The law, signed last week by President Obama, exempts the SEC from disclosing records or information derived from “surveillance, risk assessments, or other regulatory and oversight activities.” Given that the SEC is a regulatory body, the provision covers almost every action by the agency, lawyers say. Congress and federal agencies can request information, but the public cannot.

That argument comes despite the President saying that one of the cornerstones of the sweeping new legislation was more transparent financial markets. Indeed, in touting the new law, Obama specifically said it would “increase transparency in financial dealings.”

The SEC cited the new law Tuesday in a FOIA action brought by FOX Business Network. Steven Mintz, founding partner of law firm Mintz & Gold LLC in New York, lamented what he described as “the backroom deal that was cut between Congress and the SEC to keep the  SEC’s failures secret. The only losers here are the American public.”

The Dodd-Frank bill had a lot of bad ideas rolled into it, but this may be the worst.  As Mintz notes, the next time a Bernie Madoff-type scam occurs, the American public won’t have any idea about it, or about the SEC’s efforts to prevent it.  The use of FOIA has uncovered many problems at the SEC, which is undoubtedly why Chris Dodd and Barney Frank wanted the exemption.  Among the cases listed by Fox Business as having been boosted by FOIA requests are:

  • March 2009 – Fox used FOIA to discover that the SEC had investigated Madoff and R. Allen Stanford, but failed to follow through on prosecution in time to save investors.
  • 2009 – Fox again used FOIA to get records showing that the Fed knew AIG execs would get their bonuses under the bailout legislation proposed by Congress.
  • SEC whistleblower Gary Aguirre forced the SEC to release documents through FOIA requests that showed he was correct in accusing the agency of interfering in an investigation of Pequot Asset Management — and allowed him to get a settlement for wrongful termination.

None of these would have happened without FOIA.  Government has only one purpose in issuing FOIA exemptions — opacity.  Some functions in government require secrecy, but those should be limited to acute national security operations and other such public-safety tasks (such as raw FBI files, for instance).

Barack Obama and the Democrats don’t want people to see how the SEC does its work, and that should worry everyone who has watched the SEC blow its regulatory responsibilities over the last few years.  This is an agency that needs more oversight, not less, especially with its increased power and authority.


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Of course, why allow the public a window into the influence peddling FinReg was all about.

rob verdi on July 28, 2010 at 10:57 AM

Transfer more and more power to the Executive Branch until there is none left when Congress changes hands.

Smart … in the short term, but it won’t protect King Barry forever.

You can run but you can’t hide.

VibrioCocci on July 28, 2010 at 10:58 AM

This is all so surreal!!!!!!!!!!!!!

katy on July 28, 2010 at 11:00 AM

pass the bill before actually knowing what is in the bill?
____

the new SOP for congress

I hope collins is happy about her aye vote

cmsinaz on July 28, 2010 at 11:01 AM

We don’t know what it’ll do! – Dodd

Which should’ve been its death knell. Not said as a positive.

lorien1973 on July 28, 2010 at 11:02 AM

You’re doing this, Congress! You keep passing bills you don’t read out of pressure to “do something”, and all you do is what you always do: MAKE MATTERS WORSE. This is why you’re at 11%. This is why you are the least trusted American institution. This is why the private sector can’t stand you, because you get away with the kind of stupidity, laziness and incompetence that would have our tails fired in any company. And when “unintended” consequences in this stupid bill blow up in your fat bloated faces, you’ll hide behind some bipartisan commission to find out “what went wrong,” only to write another bill as a “fix” that will only screw things up further. D.C. is worthless.

Weight of Glory on July 28, 2010 at 11:03 AM

so much for accountability.

trailortrash on July 28, 2010 at 11:04 AM

When the Republicans take back congress, they won’t be able to override vetoes (without Dem help). But they will be able to deny funding…

zmdavid on July 28, 2010 at 11:04 AM

Just one of the many ways Administration is looking out for you! Just imagine how frustrating it might be to find out about all the Regulatory misteps and failures. Now, thanks to the Financial Control Law, you will no longer feel bad when your friendly Government agency drops the ball, because you won’t know about it! Have a nice day

JamesLee on July 28, 2010 at 11:05 AM

Big time porn parties at the SEC now

Daemonocracy on July 28, 2010 at 11:06 AM

Thanks a load r’s who voted for this!
L

letget on July 28, 2010 at 11:11 AM

Paging Michael Medeved… paging Michael Medeved…

Skywise on July 28, 2010 at 11:11 AM

At least Obama isn’t a pure socialist. He’s something of a crony capitalist too.

pitythefool on July 28, 2010 at 11:11 AM

And when “unintended” consequences in this stupid bill blow up in your fat bloated faces, you’ll hide behind some bipartisan commission to find out “what went wrong,” only to write another bill as a “fix” that will only screw things up further. D.C. is worthless.

Weight of Glory on July 28, 2010 at 11:03 AM

It won’t matter. As someone else said, they are killing themselves by giving all of the power they had to the Executive Branch a little bit at a time. As much I was in favor of the Patriot Act at first, I think this was the plan all along and it started with the Patriot Act.

First the military and security sectors and now the financial sector has been taken over exclusively by the Executive Branch. Now all is needed really is the manufacturing sector (which is in the process of being done with GM and Chrysler).

This was all planned people. I’m starting to think that this is why the people in Congress don’t care if they get voted out or not. Either they stay in office and get paid for basically doing nothing (since the Executive Branch will have all the power) or they are out of office and get a job in the Executive Branch.

MobileVideoEngineer on July 28, 2010 at 11:12 AM

Unbelievable.

BuckeyeSam on July 28, 2010 at 11:12 AM

Dictatorship?

Holger on July 28, 2010 at 11:13 AM

At least Obama isn’t a pure socialist. He’s something of a crony capitalist too.

George Soros certainly thinks so.

mchristian on July 28, 2010 at 11:14 AM

Oh, and a note for Scott Brown. I never expected you to be a conservative. I never expected you to be a sure party line voter. I’ll always be happy with your election. But you campaigned on making that seat the “people’s” seat. Well guess what, champ, by only focusing on those bits of the bill that you thought concerned you, you have removed the “people’s” ability to demand information from a commission that has new sweeping powers. That, Sen. Brown, is a failure; and not in terms of partisan voting. You failed in the most basic understanding of “representation”, and you screwed over the rest of us in the process. UNLESS, you did know about this and thought that not being able to FOIA the SEC was good for your voters.

Weight of Glory on July 28, 2010 at 11:16 AM

Most transparently corrupt administration ever.

rbj on July 28, 2010 at 11:18 AM

commerce clause?

Inanemergencydial on July 28, 2010 at 11:18 AM

exempts the SEC from disclosing records or information derived from “surveillance, risk assessments, or other regulatory and oversight activities.”

This bill gives the President the power to take over any company that can be labeled ‘financial’ simply by making the claim that a failure of the company would represent ‘systemic financial risk’. Completely at the whim of the President, and without having to prove anything. Just take it over.

Skandia Recluse on July 28, 2010 at 11:19 AM

Does Olympia know? I just read she is shocked, shocked, shocked at the Maxine Waters written section on gender and racial quotas she happily voted for but didn’t know was there.

Marcus on July 28, 2010 at 11:20 AM

We have to sign it before we know what’s in it…

Oh hey, now that we’ve signed it, you’ll NEVER know what’s in it because we made it illegal to read it…

Skywise on July 28, 2010 at 11:20 AM

Paging Michael Medeved… paging Michael Medeved…

Skywise on July 28, 2010 at 11:11 AM

Just don’t say “take our country back” because that would be silly or something!

VegasRick on July 28, 2010 at 11:22 AM

I hope this gets to court and gets broken very quickly, it is a tremendous threat to the liberty the American people. Secrecy is the surest way to destroy freedom.

WashingtonsWake on July 28, 2010 at 11:22 AM

Skywise on July 28, 2010 at 11:11 AM

+100

Paging Good Lt….

katy on July 28, 2010 at 11:23 AM

Thank you Scott Brown!

katy on July 28, 2010 at 11:23 AM

To think we used to laugh at the Russians!

grapeknutz on July 28, 2010 at 11:24 AM

grapeknutz on July 28, 2010 at 11:24 AM

Now they laugh at us.

Holger on July 28, 2010 at 11:24 AM

Hey, I have a great idea…

Let’s elect Democrats to run the government!

Who’s with me…?

Seven Percent Solution on July 28, 2010 at 11:27 AM

Hope they don’t catch us.
And
Change the laws so they can’t.

fogw on July 28, 2010 at 11:28 AM

The government is buying companies, ripping off investors, intimidating privately owned companies, and is exempting itself from sharing information with the peasants.

This is fascist economics – straight up.

forest on July 28, 2010 at 11:28 AM

That bad old Fox news have deprived us all of information by their snooping. The world has turned up side down and can we save our country? You Bet’cha!!!!!!!

Herb on July 28, 2010 at 11:28 AM

So they’ve gone from pocket vetoing FOIA requests from Repulbicans to just blocking them all together. Well that’s mighty nice for them, now isn’t it. Most transparent admin EVER!

Vera on July 28, 2010 at 11:30 AM

One thought about Codvilla’s article, “America’s Ruling Class” has hit the nail on the head. Dems and Repubs (elites) working together to “take care” of the little people. Here is a prime example—RINO’s and Libs working together and treating us like mushrooms—-In the dark and poop all over us.

Herb on July 28, 2010 at 11:35 AM

Goodbye Republic

therightscoop on July 28, 2010 at 11:02 AM
The republic has been dying for decades now. We just keep showing outrage every time something like this happens and will keep showing outrage every week, but not much will change. This particular government is worst than any we have had. But the real cancer is in the electorate, a dumbed-down, fat, apathetic population that has been boiled alive over decades like the proverbial frog. Some have been deeply conditioned to look to government to solve all their problems; others to blame everybody else for them; most are more influenced by American-idol marketing than sound thinking, few are willing to suffer and scarify for liberty, yet fewer are able to think logically or see what is right in front of their faces; on the conservative side things are not a lot better, many care more about their financial security and credit score than freedom (otherwise nobody would be paying their taxes to stop this insanity, and no conservative would have supported TARP).
Not much of this will be fixed in November. Obama and the Democrats should have 0% support, there should be NOT ONE Democrat elected in November, yet we will still be close to 50%-50% and the Dems will still control the Senate.
How is this possible? because we have been ignoring the Founders warnings for generations; because we have succumbed to our lower nature; because we have had it too easy; because we have let the socialists and liberals advance patiently inch-by-inch; because we have made consumerism our God and forgotten the REAL GOD.
WOW! what rant! Sorry, I had to get it out my system. I feel better now…NOT!

neuquenguy on July 28, 2010 at 11:36 AM

Weight of Glory on July 28, 2010 at 11:16 AM

Right on target!

TugboatPhil on July 28, 2010 at 11:40 AM

Soooo, I can file a F.O.I. against the D.O.D. but not the S.E.C?

kurtzz3 on July 28, 2010 at 11:40 AM

It is not government for the people it is government vs. the people.

albill on July 28, 2010 at 11:42 AM

Thank you Scott Brown!

katy on July 28, 2010 at 11:23 AM

YES! With emphasis added…Thank you Scott Brown!

The first politician I ever sent money to in my life [and I am in New Orleans]. Boy, I feel like such a chump.

lukespapa on July 28, 2010 at 11:42 AM

That argument comes despite the President saying that one of the cornerstones of the sweeping new legislation was more transparent financial markets. Indeed, in touting the new law, Obama specifically said it would “increase transparency in financial dealings.”

You have to understand what collectivist leaders mean when they say “transparency.”

What they’re saying is that the GOVERNMENT must know absolutely everything about YOU. Not the other way around.

logis on July 28, 2010 at 11:46 AM

logis on July 28, 2010 at 11:46 AM

Nail meets head!

katy on July 28, 2010 at 11:48 AM

logis on July 28, 2010 at 11:46 AM

Um hammer meets nail..

Nail meets hammer..

Hammer hits head…

Hammer nails nail…

;o(

katy on July 28, 2010 at 11:49 AM

This should place high on the Republicans’ repeal agenda and should be in every TV ad this fall against every Democrat who voted for this bill. I would LOVE to see Obama justify a veto of a bill repealing this, or to see a Democratic-controlled Senate trying to justify stalling it if the House passes it.

rockmom on July 28, 2010 at 11:54 AM

Senator Dodd was on Imus In The Morning – this Morning, Video HERE & HERE.

Dr Evil on July 28, 2010 at 11:57 AM

Hey Michael Medeved!

Does this sort of thing qualify as a “take our country back” moment, or not?

… just askin’

You obviously haven’t been paying attention. Shady deals like this have become the norm, not the exception, lately.

SalHansen on July 28, 2010 at 12:00 PM

Repeal the rejects…

drfredc on July 28, 2010 at 12:02 PM

Someone was writing this morning that it’s ridiculous to say we’ve “lost” our country.

Well, here is one more piece of evidence of it!

And there’s a thousand others like it. Federal agencies increasingly being exempt from any scrutiny at all. Checks and balances being “bypassed” with the use of “czars”. A President who can disband companies, fire CEO’s, kill bondholder rights, dictate CEO compensation, strong arm oil companies into giving up billions of dollars for compensation to be doled out by another, unaccountable agent of the White House.

A federal government that sues states for political reasons and destroys the entire offshore oil drilling industry even while ignoring court orders directing him to back down …

And yet … Glenn Beck is an “alarmist” for saying we’ve lost our Republic?

Uhm … what exactly does it take to lose a Republic then?

After the fall of the Soviet Union – conditions got so worse that the new Russian government gave ever increasing powers to its head of state.

The result was PUTIN … and a fascist government where he, and his minions govern by their pleasure. Oh yeah, the Russians still have the “trappings” of a Democratic government – but they no longer have a democratic government.

And it only took a few years to devolve to that level.

So how long do we put up with this?

HondaV65 on July 28, 2010 at 12:03 PM

HHHMMMM Wall Street is in NYC so in NY you could use the FOIL.

http://www.dos.state.ny.us/coog/foil2.html

xler8bmw on July 28, 2010 at 12:09 PM

Under a little-noticed provision of the recently passed financial-reform legislation, the Securities and Exchange Commission no longer has to comply with virtually all requests for information releases from the public, including those filed under the Freedom of Information Act.

How convenient!

ya2daup on July 28, 2010 at 12:09 PM

Horrifying. Each day brings a new horror. This administration is nothing less than a horror show.

Is it worth even asking anymore what would have happened to George Bush if he signed a bill that shut down FOIA requests?

rrpjr on July 28, 2010 at 12:10 PM

The underlying purpose of every single think this regime does is to increase it’s ability to expand it’s own power and control the American people.

They are tyrants: only different from the megalomaniacs of the mid-20th centry by the fact that they haven’t yet resorted to mass murder to get their way. But why should we think they wouldn’t be willing to do it? They are perfectly willing to hasten the death of millions of senior citizens, just as one example. I don’t put anything past them.

notagool on July 28, 2010 at 12:12 PM

So how long do we put up with this?
HondaV65 on July 28, 2010 at 12:03 PM

You see, it is not only Washington Republicans that have been successfully emasculated by the constant accusations of “right wing extremism” , racism, materialism, etc.etc. every time they oppose the liberals. Most people are now afraid of those labels, of being considered “out of the mainstream”. That is why we put up with so much and continue accept all this crap, I don’t know what it will take to reverse direction, I tend to think that it is only going to happen one household, one classroom, one municipality at a time.

neuquenguy on July 28, 2010 at 12:16 PM

I don’t think this will pass constitutional muster.

Ward Cleaver on July 28, 2010 at 12:17 PM

How convenient!

ya2daup on July 28, 2010 at 12:09 PM

*cue snl church lady*

cmsinaz on July 28, 2010 at 12:24 PM

Thank you Scott Brown!

He was snookered !! bamboozled !!

J_Crater on July 28, 2010 at 12:25 PM

Odogma decrees less transparency for them once again all the while Odogma pushes for more transparency on where we spend our money, who we know where we drive to and how many squares of toilet paper we wipe with. Arlo Guthrie of Alice’s Restaurant got it right when he recently said that there is now only one party fighting for limited government. Hard to believe that the majority of the 60′s Anti-Government proponents would do a 180 degree about face in favor of an intrusive, controlling, Socialist regime. Thank’s alot OBOTS!

wtng2fish on July 28, 2010 at 12:54 PM

Just more ‘transparency’ from an ‘honest’ government.

GarandFan on July 28, 2010 at 1:03 PM

See what happens when you DON’T READ THE LEGISLATION!

29Victor on July 28, 2010 at 1:18 PM

This is all so surreal!!!!!!!!!!!!!

katy on July 28, 2010 at 11:00 AM

Yep. So far just about everyone responsible for the financial mess that we’re in right now has been bailed out, protected and absolved.

The left doesn’t give a damn about the economy or the “little guy,” they care only about the acquisition and maintenance of power.

29Victor on July 28, 2010 at 1:20 PM

See what happens when you DON’T READ THE LEGISLATION!

29Victor on July 28, 2010 at 1:18 PM

But it was an emergency! Just look what those greedy wall street bankers were doing to the children! You don’t want to do nothing, do you? Party of no! Haliburton!

forest on July 28, 2010 at 1:23 PM

The thing that makes me smile is that through out history when shit hits the fan the ones in power are the first to get whacked and it is never pretty.

Reality Checker on July 28, 2010 at 1:51 PM

Why is there any doubt that the international bankers own the world’s governments. Your children are indebted to them perpetually.

God almighty, why can’t people see that which is before their eyes?

True_King on July 28, 2010 at 3:15 PM

When, exactly, does the tipping point come — the point where we are PERFECTLY JUSTIFIED in rioting in the streets, hanging-in-effigy all these legislators AND every member of the White House Administration, and descending on Washington with fence-rails, boiling tar, and truckloads of feathers?????????

WHEN?

A_Nonny_Mouse on July 30, 2010 at 1:55 PM

PS-

If and when sanity returns to Washington, let’s push for one more amendment to the Constitution: Make it a capital offense for any legislator to vote “for” a bill he has not read in its entirety. Additionally, if some bloviating legislator has the gall to tell us “We need to pass it to know what it’s going to do” he should be imprisoned for not less than 10 years.

Dammit, when are these gasbags ever going to learn we’ve elected them to WORK FOR US? (Answer- not until there’s a sufficiently severe penalty for screwing us over…)

A_Nonny_Mouse on July 30, 2010 at 2:02 PM