Repubs Knock Apparent FOIA Exemption

Some Republicans are disgruntled about a clause in the newly-minted financial reform law that they say allows the Securities and Exchange Commission to sidestep the Freedom of Information Act.

Rep. Darrell Issa, R-Calif., who sponsored a House-backed amendment that would have added data disclosure requirements throughout the legislation, this week asked the Obama administration why the measure, as he understands it, lets SEC withhold records that are typically subject to FOIA requests. Senators on a committee that reconciled differences between the House and Senate versions of the bill rejected Issa's proposal. House negotiators had attempted to add it in toward the end of the dealmaking.

Upon signing the bill into law on July 21, President Obama said the measure "demands accountability and responsibility from everyone. It provides certainty to everybody, from bankers to farmers to business owners to consumers," adding, "it will finally bring transparency to the kinds of complex and risky transactions that helped trigger the financial crisis."

Issa disagrees.

"For all their talk about transparency and accountability, the one thing that the president's financial reform bill has done is allow the very regulatory body that failed to catch Allen Stanford's fraud and Bernie Madoff's ponzi scheme to operate in secrecy, without ever having to be held accountable by the American people," he said in a statement.

Another section of the financial reform bill postpones online disclosures of Fed lending and other assistance to banks for up to two years. However, the Fed chairman is allowed to release this info earlier if doing so is in the public's interest and will not harm the transactions at issue.

"Our feeling is that two years is way too long," said Rick Blum, coordinator of the nonprofit Sunshine in Government Initiative.

But the law is explicit in stating that it does not affect pending lawsuits that media outlets have filed under FOIA to retrieve Fed documents:

"Nothing in this [Federal Reserve transparency] section is meant to affect any pending litigation or lawsuit filed under section 552 of title 5, United States Code (popularly known as the Freedom of Information Act), on or before the date of enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act," the law states.