Abuse of Government

Tax Day 2022: IRS Delivers Less Transparency from Themselves, Less Security with Your Information

FGI continues to investigate IRS, Treasury for apparent misconduct

April 18, 2022

(Washington, DC) – Today is Tax Day, and many Americans find themselves scrambling to provide the Internal Revenue Service (IRS) all types of information about their sensitive financial affairs, with the expectation that the IRS will keep this information private. Recent experience has shown, however, that whether this information will someday be illegally shared with outside activists or used to obstruct the constitutional rights of Americans to freely associate remains an open question. These concerns remain prevalent as the lack of accountability or availability of public records concerning these abuses continues. This is why over the past several months the Functional Government Initiative has opened multiple investigations into major scandals that have plagued the IRS in recent years. The agency has grown to become one of the most powerful and mysterious actors in the federal government but has proven to provide little transparency into its own activities and little privacy with Americans’ personal information.

Among the investigations, FGI is seeking agency records around the unauthorized leak of sensitive financial information of wealthy American citizens to ProPublica. Even last Wednesday we were reminded of the lasting impact of this unlawful leak when ProPublica published an article with an accompanying database containing the leaked information. Since the leak was discovered last year, the IRS has not made any headway into discovering the source of the leak nor revealed any effort to hold bad actors accountable.

Another FGI inquiry concerns the economic analysis, key players, and supporting materials related to the proposal to increase IRS resources for enforcement personnel and impose a now-discarded $600 threshold allowing the IRS to peer into hundreds of millions of Americans’ bank accounts. This unprecedented power grab and request for more resources has only heightened the public’s scrutiny of the IRS.

Peter McGinnis, spokesman for FGI, issued the following statement:

“Tax Day may not be a fun day, and it certainly isn’t a cheap day, but it shouldn’t be a scary day. Yet with leaks of sensitive data, targeting of organizations based on their politics, and an unprecedented power grab for more authority and IRS agents, this Tax Day should remind every American of the need for accountability at the IRS. And, as with most aspects of government, accountability begins with transparency, which we are still waiting to obtain through our many requests into the agency. Stay tuned as we demand the records the American people are entitled to.”

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Think Infrastructure Funds Were for Roads and Bridges? April Fools!

Department of Transportation fools Americans, attempts to divert highway funding to projects that do nothing to expand highway capacity

April 1, 2022

(Washington, DC) – Happy April Fools’ Day! The $1.2 trillion (with a “t”) Bipartisan Infrastructure Law (BIL), passed by Congress and signed into law by President Biden in November, was sold to the American people as a commitment to rebuild the nation’s roads and bridges.

And for those who believed that: April Fools! A Department of Transportation policy memo released in December prioritizes BIL funds for bike lanes and climate resiliency instead of maximizing investment in highway expansion and new bridges.

This memo contradicts what its supporters initially promised Americans when promoting the bill. While the memo allows for use of funds for the repair of infrastructure, it sets priorities for such things as projects “that maximize the existing right-of-way for accommodation of non-motorized modes.” It does not, for example, prioritize funds for new infrastructure needed in states where people are flocking to escape high crime and COVID lockdowns. The memo directs staff of the Federal Highway Administration (FHWA) to promote “construction of bicycle and pedestrian lanes, paths, and facilities” by pointing out that those projects can be completed more quickly due to exclusions under environmental regulations. DOT’s policy also prioritizes projects that “help combat the climate crisis” and accommodate technologies such as electric vehicle charging stations and renewable energy generation.

The surprising memo comes during our nation’s ongoing supply chain crisis. Many grocery store shelves are devoid of food, packages take weeks to be delivered, and essential everyday items are nowhere to be found. It makes one wonder: why does the federal government not maximize the infrastructure funds for actual infrastructure? The Functional Government Initiative is announcing an investigation into this policy to uncover the answers.

Peter McGinnis, spokesman for FGI, issued the following statement:

“The federal government appears to have pulled a bait-and-switch on Americans when it promised funding for roads and bridges but gave them bike paths instead. We find it alarming that instead of expanding highways that would help fix the growing supply chain crisis Americans face, the government is prioritizing funds to projects that do not address this crisis. FGI is determined to investigate this bait-and-switch and help make sure we don’t get fooled again.”

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McGinnis: ‘FGI will be appealing the FTC’s decision to withhold all documents related to a possible investigation into the oil and gas industry’

By Andy Nghiem (DOJ Newswire)

March 29, 2022

The Biden administration is continuing to place the blame on the oil and gas industry for sky-high American gas prices, but the Functional Government Initiative (FGI) believes that the administration’s own energy policies is causing gas prices to skyrocket.

The FGI recently requested access to Federal Trade Commission (FTC) documents regarding their ongoing investigation of the oil and gas industry to determine how the Biden administration’s energy policies may be impacting the cost of oil and gas, according to the FGI’s website. The request was denied, which leads the FGI to believe that gas prices are a result of the administration’s energy policies, not profiteering or price gouging by the oil and gas industry.

In recent weeks, President Joe Biden repeated his belief that the oil and gas industry may be price gouging or profiteering, this time citing the war between Russia and Ukraine. The FGI asserted that this statement simply reflects broader opposition to the domestic oil and gas industry, or an attempt to shift blame from the federal government’s role in driving inflation higher over the past year. Although there is proof of pump prices being on the rise before the war in Ukraine, FGI said the domestic oil and gas industry appears to be a constant bogeyman for the Biden administration.

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SEC Says Disclosure For Thee But Not For Me

Agency’s rapid response raises questions about use of pre-written denial letters to deflect transparency into major rule that could drive inflation higher

March 28, 2022

(Washington, DC) – Today, the Functional Government Initiative announced concerning developments in its efforts to obtain public records from the Securities and Exchange Commission (SEC) regarding the SEC’s newly proposed Climate Disclosure Rule. In response to a standard Freedom of Information Act request seeking records relevant to the rule, the independent agency responded with lightning speed – in only a day – to deny and dismiss FGI’s request for public records. This is likely not what Attorney General Garland meant when he issued his memorandum last week imploring agencies to be more responsive to FOIA requesters.

FGI’s request was part of an expanded investigation into the government’s broadening energy and climate agenda, a key driver of inflation for most Americans. Of particular concern are the members of Congress, financial industry titans, and special interest organizations lobbying the SEC to propose a rule that would only worsen this energy crisis.

The proposed rule issued by the SEC on Monday would require public companies to disclose their greenhouse gas emissions as well any emissions that can be traced to their activities along the value chain. The rule was met with significant scrutiny both in terms of its legality, breadth of regulatory impact and the potential to increase the cost of consumer products across the economy. The move appears set to move America further away from energy independence and discourage public investment in oil and gas companies. The regulatory initiative stands in stark contrast to our European allies, who are reassessing their climate change policies in the face of the energy crisis and the realities of geopolitics.

Peter McGinnis, spokesman for FGI, issued the following statement:

“I’ve never heard of a federal agency working so fast to ‘carefully consider’ a request only to issue a blanket denial within a day. Perhaps I should be less surprised by the agency’s hypocritical approach inherent in mandating climate disclosures for the private sector but dismissing requests for disclosure of its own public records. It does make one wonder what the agency is so concerned we will find that they’ve decided to play hide and seek with these records. In the middle of an energy crisis and record inflation, which special interests were so influential as to force out such an expansive and costly rule? We intend to find out.”

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FGI Announces an Investigation into Postal Service Operations

One of the most visible symbols of government, USPS is experiencing substantial challenges

February 17, 2022

(Washington, DC) – The Functional Government Initiative released the first batch of documents today received in response to its investigation into the U.S. Postal Service (USPS) – one of the most visible aspects of the federal government in Americans’ daily life. This is part of a series of inquiries into how our government is meeting its legal obligations, serving the public’s interest, and minimizing the dysfunction that appears endemic to large bureaucracies. Other inquiries have focused on the changing norms of independent agencies and the other major organ of the government familiar to almost all Americans – the Internal Revenue Service.

While “checking the mail” has been one of the most ingrained relationships between the American public and the U.S. government, it is also one of the fastest deteriorating relationships. In pursuit of our investigation, FGI submitted multiple Freedom of Information Act requests to better understand how the Postal Service and its federal partners are handling competition from technology and the private sector, efforts to reduce contraband from exploiting the USPS delivery system, and the increasing burden of retiree health costs.

The first to reply with documents was the Postal Regulatory Commission (PRC), which is responsible for transparency and oversight of USPS operations. While USPS’ handling of mail-in ballots has received substantial media attention, less so has been the increasingly cozy relationship between those responsible for overseeing the USPS and those who appear to be benefiting the most from its services – a coalition of package companies such as Amazon and eBay (known as the “Package Coalition”) that have relied on the Postal Service to reduce one of their largest operating costs. Unsurprisingly, records show extensive communications between lobbyists for the Package Coalition, PRC regulators, and staff on the congressional committees with oversight over postal issues.

Throughout the released records, the PRC’s regulatory staff appear to be deeply tied to the messaging and legislative interests of the so-called “Package Coalition.” Some of the communications reveal an unusual display of agency deliberations and frankness with a lobbyist representing an interested party. Taken together, the frequent behind-the-scenes communications raise concern about the objectivity and potential for arbitrary decision-making being undertaken at the PRC.

As additional documents become available on this and other aspects affecting USPS operations and potential taxpayer obligations, FGI will release the records and our unvarnished analysis.

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FGI Seeks Records on Government’s Covid Response

Did federal actions undermine trust in institutions?

February 11, 2022

(Washington, DC) – The Functional Government Initiative (FGI) announced a broad investigation of the federal government’s response to COVID-19 and how that response impacts government operations and the lives of American citizens. FGI seeks to determine the foundation of decisions that have changed the operating posture of the government and, in some cases, may have weakened trust in some of its most important institutions.

The pandemic of the last two years has been the most profound event in the lives of nearly every American. The world is a far different place than it was prior. Did we “follow the science”? Will we emerge weaker or stronger?

After two years, the debates continue to rage – at times with even more passion. COVID mitigation measures have sparked tremendous public controversy and questions over their scientific underpinnings and ultimate efficacy. Mask recommendations from federal agencies have seen wide swings over the course of the pandemic with seemingly little connection to changing science. Airline industry leaders question the need for masks on airplanes. Governors across the political spectrum are relaxing mask mandates in schools and elsewhere. While at the same time the White House and CDC continue to recommend or require masks in schools and on public transportation. What data and studies underpin these recommendations?

The post-pandemic landscape for the federal workforce is almost certainly destined for change. How did two years of telework affect productivity and attendance at federal agencies? This information is necessary to determine whether the federal government is functioning properly and efficiently using taxpayer resources.

As the nation is poised to move from pandemic to endemic, the question arises, what does that really mean? If, as some assert, the government was too slow in responding at the beginning of the pandemic, is it also responding too slowly to its end? What evidence are these decisions based upon? A functional government is one that avoids arbitrary actions governed by political calculations and makes policy with an eye toward balancing public health with individual freedoms and prosperity. FGI, through an array of Freedom of Information Act requests, intends to seek answers to these questions and more.

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FGI Seeks Records into IRS Abuses and Efforts to Expand Authority

On heels of political targeting and ongoing release of taxpayer data, the nation’s tax collector is asking for a bigger role in Americans’ lives

February 4, 2022

(Washington, DC) – The Functional Government Initiative (FGI) is seeking a range of records from the Internal Revenue Service (IRS) and related agencies as the nation’s tax collector is requesting a significant expansion of taxing and enforcement authority through its budget and personnel. The full analysis and economic reasoning behind the agency’s recent proposals remain hidden from public view, and it is unclear whether it would yield the benefits claimed by senior officials.

The Tea Party scandal involving Lois Lerner shook Americans’ confidence in the powerful IRS, yet several years passed and a change of Administration came before the IRS would admit to wrongdoing. The two senior officials at the center of the scandal denied wrongdoing while also claiming that their deposition testimony would so anger the public that records should remain sealed. Unfortunately for taxpayers and transparency, these records have been kept from the public. This ongoing secrecy leaves many questions unanswered regarding what exactly occurred and whether agency practices that enabled the misconduct were ever truly addressed.

Last year’s unauthorized leak of sensitive financial information of wealthy American citizens to ProPublica again raised questions around the integrity and controls in place to prevent abuses at the Service. Similar to the Tea Party scandal, there appears to be little effort to identify those responsible for the leaks or implement new systems to prevent future abuses. Against this backdrop, the agency sought to dramatically expand its budget, personnel, and authority to peer into citizens’ bank accounts – encompassing accounts with as little as $600 in transactions per year. Though the proposal received strong pushback, transparency into its foundation – and even adjusted proposals that have set that target at $10,000 per year – has been minimal at best.

For years, the Internal Revenue Service has been one of the most powerful and mysterious agencies of the U.S. government. Unfortunately, the Tea Party targeting scandal confirmed what many Americans feared – the agency felt it was above the law. Then last year’s ProPublica leak of taxpayer data occurred – again without any apparent accountability by IRS employees – and it left the public even more skeptical about whether a core piece of its government was functioning properly. Combined with a legislative proposal to dramatically expand its power and budget, many Americans are right to be concerned about what’s going on behind the scenes. The Functional Government Initiative exists to do exactly this. We will report back what we find out.

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Government watchdog group investigating DOJ’s Legal Counsel for possible involvement in “hostile takeover” at FDIC

By Andy Nghiem (DOJ Newswire)

Jan 31, 2022

The U.S. Department of Justice’s Legal Counsel is under investigation for possible involvement in a controversy at the Federal Deposit Insurance Corporation (FDIC). 

According to a Jan. 21 press release, the Functional Government Initiative (FGI) announced that it is investigating the Department of Justice’s role in moves by board members of the Federal Deposit Insurance Corporation to challenge the authority of the FDIC’s chair.

The Wall Street Journal reports that Rohit Chopra, a board member of the FDIC who also is the director of the Consumer Financial Protection Bureau, sought a legal opinion from the Justice Department’s Office of Legal Counsel on whether the FDIC chair has to set the agenda for the FDIC, as has been the longstanding procedure and practice.

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Functional Government Initiative: Investigating an Attempted “Hostile Takeover” of the Federal Deposit Insurance Corporation

Trust in one of the United States’ banking regulators should not be threatened by political influence.

January 21, 2022

(Washington, DC) – The Functional Government Initiative today requested records from four federal agencies that will provide transparency into actions by senior banking regulators that raise questions over the future of independent agencies. FDIC board member and director of the Consumer Financial Protection Bureau (CFPB) Rohit Chopra was among the leading voices supporting what former FDIC Chairman Jelena McWilliams called an attempted “hostile takeover.” The FDIC is responsible for insuring deposits and promoting the stability of the nation’s banking system. Its chairman is appointed to a five-year term, meant to insulate the agency from quickly changing policy agendas after presidential elections. By the FDIC’s longstanding policies and practices, the FDIC chairman sets the agenda of the agency and supervises its staff as CEO.
 
The requested documents will help the public understand what happened, who may have been involved, and whether ethics rules were followed. If allegations of the former Chairman are true, the FDIC’s status as an independent regulator may be in jeopardy. It may also have implications for other independent federal agencies if this is seen as a move toward prioritizing Administration policy priorities over adhering to long-standing institutional norms. The recent controversy comes in the wake of mass firings of qualified individuals appointed by the former Administration to advisory committees, typically understood to be free from political interference.
 
In this case, in spite of this traditional deference to the agency chairman, recent reports allege that Mr. Chopra sought to circulate a proposal relating to bank mergers that, according to Chairman McWilliams, “was filled with omissions, misrepresentations and technical inaccuracies.” Chopra and other FDIC board members attempted to move forward with it anyway. Since that time, Chairman McWilliams has announced her resignation from the FDIC.
 
In order to shine a light on what really happened at the FDIC, FGI is seeking records from the FDIC, CFPB, Department of Justice, and Department of Treasury. As reported by the Wall Street Journal, Mr. Chopra asked for a legal opinion from the Office of Legal Counsel. The public should know what precedents and existing legal policy Mr. Chopra wants to change as part of his efforts to counter the authority of the FDIC chairman. The Wall Street Journal also reported that Treasury Secretary Janet Yellen refused Chairman McWilliams’ request to support the independence of the FDIC.