By Pam Martens and Russ Martens: October 1, 2021
We’re sorry to have to tell you this, but the Freedom of Information Act (FOIA) process, where the public and members of the press can request information from their government and get a meaningful response, is as dead under the Biden administration as it was under the Trump, Obama and George W. Bush administrations. In no small part, this is why the United States of America, which regularly lectures other countries on what it means to be a democracy, has lost the trust of the American people.
Earlier this year we reported that the man that President Biden had selected to head the Criminal Division of the Justice Department, Kenneth Polite, owed more than $1.5 million in debts according to his financial disclosure form and public mortgage records; was paying over 18 percent interest on an outstanding balance on a credit card; 19.99 percent interest on a personal loan; and yet, for some reason, had decided to accept a job at the Justice Department where his income would be slashed by about 77 percent.
Equally concerning, not one Senator on the Senate Judiciary Committee that held the confirmation hearing for Polite had asked a single question about these red flags.
In addition, Polite was coming from the law firm Morgan, Lewis & Bochius where he had been a partner earning approximately $877,500 in 2020. He would likely want to return to that job after his stint in government with a paycheck of less than $200,000 annually. It’s this revolving door from government to Wall Street that is a key factor in the unprecedented levels of corruption that we are seeing today.
Polite’s former law firm, Morgan, Lewis, has provided legal representation to the Wall Street mega banks for decades. Polite’s financial disclosure form revealed that 5-count felon JPMorgan Chase was one of his clients over the past year.
Another Wall Street trading powerhouse, Morgan Stanley, was also his client according to Polite’s financial disclosure form. Morgan Stanley, along with other Wall Street banks represented by Morgan Lewis, are under a new Justice Department investigation for secretly loaning out their balance sheets to hedge funds to conduct trading in highly-leveraged and highly-concentrated stock positions. That clever ruse led to the collapse of the Archegos family office hedge fund in March of this year; a 50 percent plunge in the price of some of the stocks involved in the scheme, including ViacomCBS, the parent company of the CBS TV Network; and more than $10 billion in losses for the banks involved in providing the margin loans, which were dressed up as derivative trades.
Under Polite’s Ethics Agreement, “he will be required to recuse from particular matters involving specific parties involving his former employer or former clients for a period of two years after he is appointed….” Why would the U.S. Senate confirm such a man for the top criminal law enforcement post in the United States?
Hoping that the Biden administration would be better than the last three administrations when it came to FOIA requests, we filed a FOIA with the Office of Government Ethics (OGE) asking “for all electronic correspondence from November 6, 2020 through July 20, 2021 that relates to the nomination or confirmation or vetting of Kenneth A. Polite for the position of Assistant Attorney General at the Criminal Division of the Department of Justice.”
We received a response on September 29, more than two months from the date of our inquiry. The cover letter said the OGE was “enclosing 96 pages of responsive records” subject to various redactions.
The 96 records were anything but responsive. They included multiple pages relating to a tiff that a Bloomberg News reporter was having with the OGE because he felt a reporter for American Lawyer Media was getting preferential treatment from the OGE. Most of the 96 pages were simply clerical emails between staff members that shed zero light on how all of the red flags on Polite’s financial disclosure form and work history had been ignored.
The relevant documents, it turns out, had been withheld and sent over to the Justice Department for more stalling. The OGE cover letters explains as follows:
“In searching for responsive records, OGE located 58 (some partial) pages of records that originated at the Department of Justice. We are therefore sending these responsive materials, along with a copy of your request, to the Department of Justice…We are asking the Department of Justice to review the material and respond directly to you.”
The Justice Management Division responded via email the very next day, writing that our request had been “assigned to the Complex track” as opposed to the “simple” track. That meant it could take a long time to hear anything further.
But just how “complex” could it be when the OGE had indicated in writing that it had already located the 58 documents and had already delivered them to the Justice Department?
We’ve seen this kind of obfuscation and stonewalling so many, many times before, in cases involving our own FOIA requests and those of other reporters.
The nonsense in the “responsive” material we received from OGE reminded us of what happened to the late Bloomberg News reporter Mark Pittman after he filed a FOIA with the U.S. Treasury Department during the Obama administration. Pittman wanted the Treasury Department to identify the $301 billion in securities owned by Citigroup that the government had agreed to guarantee to help shore up the troubled bank during the financial crisis of 2008. Pittman also wanted details of any contracts the Treasury had with outside firms that had been hired to calculate the assets’ values. Pittman died from a heart attack 10 months later at age 52, still waiting for a response.
According to a Bloomberg News article by Bob Ivry on October 25, 2010, it took the Treasury over 20 months to finally respond, after allowing the Wall Street mega bank, Citigroup, to have input into what would be disclosed. Ivry explained:
“Treasury officials responded with 560 pages of printed-out e-mails — none of which Pittman requested. They were so heavily redacted that most of what’s left are everyday messages such as ‘Did you just try to call me?’… None of the documents answer Pittman’s request for ‘records sufficient to show the names of the relevant securities’ or the dates and terms of the guarantees.”
Pittman was similarly stonewalled in his FOIA requests to the Federal Reserve, which was refusing to release the details on the trillions of dollars it had funneled to Wall Street firms during and after the financial crisis of 2008. It took an amendment by Senator Bernie Sanders to the Dodd-Frank financial reform bill to have a government audit of the Federal Reserve’s bailout programs and the media battling in court for more than two years, to finally get the details of the Fed’s $29 trillion bailout.
On June 17 of this year, we filed a FOIA with the Securities and Exchange Commission seeking “the names of any family offices or hedge funds or investment-related firms that received SEC permission to confidentially file their 13F forms during the period of January 1, 2015 through June 16, 2021.” Those 13F filings should list the stocks and other securities owned by giant family office hedge funds, which can run to as much as $54 billion or more. The lack of transparency on this issue led to the collapse of Archegos in March and the resulting $10 billion in losses at the banks involved.
Instead of providing Wall Street On Parade with the documents we sought, the SEC stalled for more than two months and then simply told us to go look at the public documents on its website. Obviously, it doesn’t take a rocket scientist to understand that if the SEC granted permission for the documents to be confidentially filed, they’re not going to be publicly filed on the SEC’s public website.
For more on how Wall Street On Parade has been given the runaround on its FOIA requests over the years by our “democratic” form of government, see a small sampling in the Related Articles below. The way we are forced to get at the facts today is to spend enormous amounts of time contacting folks who have not yet been muzzled by a government agency or a Wall Street non disclosure agreement.