Now we are learning FOIA implications of financial reform act
IN GENERAL. — The Office may, as determined by the Council or by the Director in consultation with the Council, require the submission of periodic and other reports from any financial company for the purpose of assessing the extent to which a financial activity or financial market in which the financial company participates, or the financial company itself, poses a threat to the financial stability of the United States.
— Page 44 of Dodd-Frank Wall Street Reform and Consumer Protection Act
As Nancy Pelosi said, you have to pass the bill to find out what is in the bill.
That certainly goes for the 2,300-page so-called financial reform law just signed by President Obama.
According to reporters at the Donald W. Reynolds National Center for Business Journalism, which was established using a grant from the foundation set up by the Review-Journal’s former owner for more than half a century, we are now finding out that the bill gives the Securities and Exchange Commission broad exemptions from the Freedom of Information Act, which is supposed to allow Americans to see what our government is up to.
“Well, the president’s signature was barely dry on the financial regulatory reform signed into law last week when a new stir erupted,” Melissa Preddy writes on businessjournalism.org.
“Fox Business pronounced yesterday that the Securities and Exchange Commission is exempt under the Dodd-Frank act from responding to public requests for documents under the Freedom of Information Act (FOIA). The news outlet said the SEC cited the new rule Tuesday in response to a Fox FOIA request.”
For its part Fox Business’ Dunstan Prial writes that the SEC cited the new law when Fox asked for certain information. The article quotes Steven Mintz, of the law firm of Mintz & Gold, describing “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.”
Mintz predicted “the next time there is a Bernie Madoff failure the American public will not be able to obtain the SEC documents that describe the failure.”
Since federal agents missed Bernie it appears they can cover their tracks in the future as well.
Their rationale for keeping secrets is that the bill allows them to gather all sorts of private information about virtually anyone for any or no reason.
Both Fox and Reynolds quote SEC spokesman John Nester, who said, "We are expanding our examination program's surveillance and risk assessment efforts in order to provide more sophisticated and effective Wall Street oversight. The success of these efforts depends on our ability to obtain documents and other information from brokers, investment advisers and other registrants. The new legislation makes certain that we can obtain documents from registrants for risk assessment and surveillance under similar conditions that already exist by law for our examinations. Because registrants insist on confidential treatment of their documents, this new provision also removes an opportunity for brokers, investment advisers and other registrants to refuse to cooperate with our examination document requests."
In other words, when it comes to financial records the Fourth Amendment has been folded, spindled and mutilated.
It is the equivalent of the government setting up surveillance cameras in your home to make sure you do not do anything that might “pose a threat,” whatever that means.
This aspect is something that was recognized when the bill was being contemplated. In fact Sen. Harry Reid was asked about the Fourth Amendment implications in early May. This is what he said then:
Now the bill is law. Let the lawyers play in the fields of the Constitution.
