Press Releases

IRS Brings Back Former Lerner Boss and Tea Party Targeting Team Member

Nikole Flax will be head of IRS office that will hire 87,000 new agents

September 2, 2022

(Washington, DC) – The Functional Government Initiative (FGI) expressed its concern over the assignment of an individual associated with an IRS targeting scandal to head the office overseeing the office in charge of the 87,000 new IRS agents. Reports that Nikole Flax, who was chief of staff to the IRS commissioner who was fired in the wake of the Tea Party targeting scandal, are sure to stoke fears that these new agents may be used to harass low- and middle-income taxpayers and those identified for political reasons. Contrary to the promises that no one who earns less than $400,000 a year will pay more taxes, the Congressional Budget Office analysis indicates at least $20 billion of the $124 billion in increased tax revenues projected to be gained from these additional agents will come from low- and middle-income Americans.

During the Tea Party targeting scandal, the IRS was forced to pay millions in settlements for improperly denying and slow-walking applications for nonprofit status from conservative groups. Flax was part of the group of IRS employees whose emails inexplicably disappeared due to hard drive crashes as Congress investigated. FGI has submitted numerous requests to obtain information regarding the previous IRS targeting scandal, as well as the proposal to beef up the IRS. In the case of one Freedom of Information Act (FOIA) request, the IRS bizarrely responded that it had “no records” discussing the proposal to add 87,000 new agents to its workforce and $80 billion to its budget.

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

“It’s fascinating, and indicative of the level of dysfunction in government, that the same folks who were part of the Tea Party targeting 10 years ago would be tasked with managing a controversial program with such a tremendous potential for abuse. At the very least, this move is tone-deaf. Most certainly, it serves to heighten the fears that the amping up of the IRS may result in a repeat of the earlier scandal.”

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Watchdog investigating whether student loan forgiveness order driven by politics

With the midterms quickly approaching, student loan forgiveness could have been a move to influence polling or court voters

August 25, 2022

(Washington, DC) – Today, the Functional Government Initiative (FGI) is opening an investigation into whether the student loan forgiveness executive order was driven by politics rather than sound policy or a defensible economic evaluation.

Yesterday, President Biden signed an executive order which would cancel student loans up to $10,000 for individuals who make under $125,000 a year annually or less than $250,000 annually per household. While some celebrated this announcement, the vast majority of Americans scorned at it. The presidential handout is projected to cost at least $570 billion according to some estimates and may yet contribute to already record inflation levels. The handout will only be available for the one-third of Americans who have college degrees while the two-thirds without a college degree will foot the bill.

Americans are stuck asking why now? Blue collar workers and those individuals who have already paid off their debts appear to be left holding the bag for paying someone else’s college tuition. Canceling student debt has been a long-time progressive goal of the Biden Administration. Huge spending decisions like this should be based on economic analyses and evaluations, not politics and opinion polling that the timing suggests may be the real drivers.

FGI’s inquiry seeks to find whether things such as polling, approval ratings, and midterm elections were factored into the decisions related to student loans and how student loan forgiveness decisions were communicated, including within the Department of Education, with outside special interests, with the White House, and with others. The Americans who are footing this bill deserve answers, and FGI is conducting this investigation to uncover them.

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

“The administration gave a handout to Americans with the highest earning potential while telling the two-thirds of Americans without college degrees or student debt they have to pay for it. Against the backdrop of the midterm elections and out of control inflation, the move appears directed at giving officials a talking point that they are putting money back in people’s pockets and relieving clear economic pain from the recession. All indications are that politics played a leading role in this massive subsidy, which appears to benefit a demographic being courted by the President’s party. The Americans who never went to college and those who saved and already paid off their loans deserve to know if they’re paying for someone else’s college due to inappropriate political considerations.”

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IRS claims it can find “no records” on an $80 billion increase in its budget

Agency that can’t find who leaked private taxpayer info also asserts no one in the agency discussed additional funds and 87,000 new employees provided in “Inflation Reduction Act.”

August 9, 2022

(Washington, DC) – Today, the Functional Government Initiative (FGI) announced transparency litigation against the Internal Revenue Service (IRS) after the agency amazingly declared it had no records regarding an $80 billion proposed funding increase and an additional 87,000 employees included in the economic package referred to by its proponents as the “Inflation Reduction Act.” The proposals for drastically increased funding and staffing for the IRS were originally included in the Biden Administration’s fiscal year 2022 budget request.

Earlier this year, FGI began investigating the administration’s plan to flood the IRS with more taxpayer dollars for more agents and other things supposedly to increase compliance. The massive influx to the IRS would come amidst ongoing controversies of alleged political targeting and leaking of sensitive financial data. The original proposals also included a controversial attempt to monitor private transactions of more than $600, which would have affected nearly every taxpayer.

The IRS recently replied to FGI’s request for information by stating they have “no records” regarding any economic analysis, request for new agents, or resources, and they closed our case. With this response, the IRS is astonishingly claiming that it performed no analysis, there were no internal discussions and not a single mention by agency officials of these proposals, and there were no communications between IRS officials and the White House and Treasury officials regarding a plan to nearly double its budget and personnel. This would also indicate the agency has absolutely no plan for what to do with the additional funds, personnel, or resources.

After careful consideration, FGI is filing suit against the IRS to reveal what is really going on with these controversial proposals. We seek to uncover records if they do, in fact, exist. If it is true that the IRS has no records on this proposal, then Americans deserve answers regarding the dysfunction involved in keeping the IRS completely in the dark about a massive increase in the agency’s funding, staff, and resources.

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

“Not conducting an economic analysis or having any communications, not even a single email regarding one of the largest budget increases in agency history is hard to believe. If true, then it only goes to show that government spending has become so reckless that agencies are being handed billions of taxpayer dollars without first consulting with them about how those dollars will be spent. With all of the incredible dysfunction at the IRS – targeting organizations for political views, releasing taxpayer data they had promised to keep private – it is not surprising they would report they knew nothing about this proposal, but it should disturb every American.”

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HHS refuses to provide records revealing if cloth masks work or not

Watchdog sues after agency sits on findings of cloth masks studies

August 16, 2022

(Washington, DC) – Today, the Functional Government Initiative (FGI) announced transparency litigation against the Department of Health and Human Services (HHS) seeking records surrounding studies about the efficacy of cloth masks.

In January of this year, the Centers for Disease Control (CDC) revealed that their internal studies have shown that wearing cloth masks is not an effective way to prevent the spread of COVID. This revelation came after almost two years of HHS, along with its subsidiaries the CDC and the National Institutes of Health (NIH), recommending the use of cloth masks to stop the spread of COVID-19. During this time, Dr. Anthony Fauci, who leads NIH’s National Institute of Allergy and Infectious Diseases (NIAID) along with his role as an advisor to the White House, and other government leaders went on regular media tours encouraging mask mandates and dismissing those who questioned whether cloth masks were effective in stopping the spread of COVID-19. They quite possibly continued doing so after having access to the studies.

For more than two years, many Americans were subjected to mask mandates in most public places. Even months after reports were available calling into question the efficacy of cloth masks, numerous school districts across the United States continued to require children, the least susceptible demographic to COVID-19, to wear cloth masks in the classroom with the apparent backing of HHS. Even today, districts such as San Diego Unified require student masking. Americans deserve to know when HHS discovered that cloth masks were ineffective, why the results of these studies were kept from the public, and why HHS continued to recommend cloth masks when the data showed they were largely ineffective.

After this information was reported, FGI began seeking records surrounding internal studies on the efficacy of cloth masks and whether the agencies funded randomized control trials related to masks. While FGI has been willing to work with HHS and its subsidiaries, the agencies have not been forthcoming. The only way to now retrieve these records and make them accessible to the American public is through the courts. FGI has been forced to resort to litigation with HHS, NIH, and NIAID over their ongoing withholding of the requested records.

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

“When the CDC revealed that cloth masks were ineffective, they were stating what the American public already knew for months. Unfortunately, those who publicly questioned the efficacy of cloth masks prior to their announcement were dismissed or branded purveyors of misinformation, and worse by Dr. Fauci and other government officials. The American people deserve to know how long HHS was sitting on this data, if they even reviewed studies before making their recommendations for mandated masks, and why they continued to promote cloth masks after they knew they didn’t work to stop the spread of COVID-19.”

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Treasury Hiding Records That Could Reveal True Basis for Fed Reserve Nomination

FGI files transparency suit seeking records regarding renomination of Jerome Powell

July 27, 2022

(Washington, DC) – Today, the Functional Government Initiative (FGI) announced transparency litigation against the Department of the Treasury seeking records on the Administration’s decision to renominate Jerome Powell as Chair of the Federal Reserve during a time of record-high inflation.

In November 2021, President Biden nominated Jerome Powell for a second term as chair of the Federal Reserve. Leading up to and during his renomination process, Powell had overseen monetary policy as inflation hit levels not seen for forty years. Given the state of the nation’s economy, Powell’s renomination had received criticism and pushback from elected officials on both sides of the aisle.

FGI’s initial concern was based on public reports that the renomination of Chairman Powell was not based on his record, his willingness to address skyrocketing inflation, or the independent agency’s statutory mission. Rather, the decision may have been due to his prioritizing a special interest agenda that is at least partially responsible for driving gas prices to all-time highs. The request from FGI is intended to uncover those motivations.

Though outside of the Federal Reserve’s mission, mitigating or inserting speculative climate risk analysis into U.S. monetary policy may have been a driving factor in Powell’s renomination. If true, this would represent a substantial departure from long-established norms of Federal Reserve independence upheld by both major political parties. Inserting such policy goals would no longer insulate the powerful independent agency from blowing political winds that could distract from its statutory mandate.

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

“Jerome Powell was given a second chance by the Biden Administration, and the American people deserve to know why. Based on public statements by senior officials, Powell’s second stint at the Federal Reserve may represent a concerning departure from past precedent that sought to protect independent agencies from a given Administration’s policy goals. With inflation continuing to climb and efforts to double down on the priorities of the climate lobby driving gas prices still higher, Powell’s renomination may represent the clearest sign yet of the Administration’s priority of fighting climate change over inflation. FGI will continue to pursue these documents so the American public can have an accurate picture of the federal government’s priorities.”

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CFPB sued over records related to attempted takeover of FDIC

FGI seeking to discover where this takeover originated and what special interests were involved

July 14, 2022

(Washington, DC) – Today, the Functional Government Initiative (FGI) announced transparency litigation against the Consumer Financial Protection Bureau (CFPB) to compel the release of records regarding an attempted CFPB takeover of the independent Federal Deposit Insurance Corporation (FDIC).

CFPB Director Rohit Chopra, also a board member of the FDIC, made unprecedented moves to undermine the longstanding independence of the FDIC. Chopra, a former Obama political appointee and a former member of Hillary Clinton’s transition team, attempted to circumvent the authority of Chairman McWilliams, including while she was on a nine-hour flight for FDIC business. After receiving a draft document produced by career employees and subject matter experts, Chopra again attempted to force a vote of the FDIC board on a controversial proposal related to bank mergers. Even the FDIC’s Office of General Counsel informed Chopra that his procedural maneuvers violated the by-laws of the FDIC and were not valid.

At its inception, the FDIC was designed to operate as an independent agency largely immune to the changing policies of new administrations. However, this attempted takeover broke nearly 90 years of tradition and may undermine the independence of other independent agencies across the US government. Whether this abolition of long-standing tradition originated from the White House or outside special interests remains an open question.

In January 2022, FGI opened an investigation, seeking documents about the CFPB’s role in the controversy, the long-standing authority of the FDIC chair, and the origins of this attempted FDIC takeover. The records FGI seeks, which the CFPB appears to be hiding, could provide some answers.
Initially, CFPB appeared to be willing to work with FGI but then abruptly ceased all communications, leaving FGI no other choice to but to file suit against CFPB.

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

“Trying to force independent agencies to function as partisan rubber stamps violates the historic norms of how these agencies were designed to function. Director Chopra’s attempt to takeover and turn the FDIC into a political tool is not only a threat to the FDIC itself but also an attack on the objectivity of other independent federal agencies. The American people deserve to know whether this coup was by Mr. Chopra’s own design or a calculated effort by the White House or outside special interests.”

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DOE Withholds Records on Strategic Petroleum Reserve Release

FGI files suit to discover if politics played a role 

July 7, 2022

(Washington, DC) – Today, the Functional Government Initiative (FGI) announced transparency litigation against the Department of Energy (DOE) seeking records on the Administration’s decision to release millions of barrels of oil from the Strategic Petroleum Reserve (SPR).

In November 2021, amidst skyrocketing gas prices, the Biden Administration announced it was going to tap into the Strategic Petroleum Reserve and withdraw 50 million barrels of oil. The SPR was created by Congress following the Arab oil embargo of the early 1970s with the intent to maintain a reserve to address severe disruptions in supply. As the administration draws from the reserve, there has been no major disruption in the oil supply that would have warranted such a withdrawal. By contrast, the Colonial Pipeline hacking attack in May of last year, which disrupted fuel supplies to the East Coast, did not trigger a release from the SPR.

FGI’s document request was triggered by concerns the decision to drawdown was in response to the Administration’s falling approval numbers, due in part to rising gas prices, rather than disruptions in supplies. The Administration has since made additional releases from the SPR following the Russian invasion of Ukraine. These releases have depleted the reserve to dangerous levels not seen since the 1980s.

In January 2022, FGI opened up an investigation into the decision to release the first 50 million barrels from the SPR. Despite repeated efforts by FGI to work with DOE during this investigation, the agency has not complied with its obligations under the Freedom of Information Act and FGI believes this lawsuit is the only way to force DOE to release the records that could show the true basis for this unprecedented drawdown of the SPR.

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

“With each release from the Strategic Petroleum Reserve, we weaken our ability to respond to a legitimate supply crisis. The SPR was created to respond to real emergencies, a category that does not include falling poll numbers caused by a failed energy policy. Americans deserve to know if political motives are behind moves that put their security at risk.”

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22,000 Unvaccinated DHS Employees Sitting in Limbo, Documents Reveal

As the border crisis worsens, DHS’ posture on the COVID vaccine mandate may force a massive employee exodus

July 6, 2022

(Washington DC) – The Functional Government Initiative (FGI) has received documents from the Department of Homeland Security (DHS) revealing the potential impact of the federal government’s vaccine mandate on DHS employees. The data shows that nearly 22,000 employees from the department critical to our national security sought a waiver in late 2021, but the agency has refused to provide any clarity on whether they will face termination or adverse employment actions.

As part of an ongoing investigation into how the federal government’s response to COVID-19 has harmed the federal workforce and operations, FGI sought information on DHS’ vaccine mandate. FGI’s records request sought aggregate numbers on requests, approvals, and denials for exemptions – information DHS already had been instructed to compile by the Administration. After months of delay, the documents that FGI received reveal that 22,000 DHS employees are at risk of termination for not bowing to the Administration’s demand that they receive multiple injections of the COVID-19 vaccine. These employees submitted religious or medical exemption waivers as required by DHS but have yet to learn how the department will handle their waiver requests. As a result, DHS has left these employees and their families wondering from week-to-week whether they’ll continue to have a job.

This uncertainty not only affects affect DHS employees and their families but also affects national security and the untamed border crisis. With the administration mulling terminating Title 42, which ironically would eliminate measures put in place to keep COVID-19 out of the United States, DHS cannot afford to lose a single employee. Laying off 22,000 employees would be a huge step in the wrong direction and put America’s national security at risk. Just last week, we witnessed just how gruesome the border crisis has gotten when a tractor trailer was found with more than 50 dead migrants locked inside. DHS needs to bring more security personnel into the Department rather than threatening a major layoff.

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

“DHS has left 22,000 employees and their families wondering each week if they’ll have a job. This is not how a functional government agency operates. Leaving employees anxious about their futures will undermine the Department’s ability to retain a dedicated and productive workforce needed now more than ever. If Secretary Mayorkas were truly serious about ending this year-and-a-half crisis, he would focused on ensuring current DHS employees keep their jobs and on hiring more staff to help them, not effectively forcing tens of thousands of employees to leave.”

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Internal HHS Report Shows 20-30% of Workforce May Not Have Been Working

2021 Report raises concerns about potential relationship to baby formula shortage and failure to promptly investigate whistleblower claims

June 15, 2022

(Washington, DC) – Today, the Functional Government Initiative announced it has received an internal 2021 report from the Department of Health and Human Services (HHS) that studied employees’ access and use of the agency’s virtual system while working remotely during the first nine months of the pandemic. The report, commissioned by former HHS Chief of Staff Brian Harrison, found that on any given day from March-December 2020, between 20-30 percent of HHS employees did not appear to be working. The report looked at all HHS employees’ login activity on the Virtual Private Network (VPN) or Microsoft 360 Accounts, which are used by employees to access the agency’s email and file systems remotely.

The report is likely to raise concerns whether this trend continued throughout 2021 and possibly into 2022, as the Biden Administration has made a concerted effort to continue very flexible telework policies well after the vaccines were made available. If so, it could have dramatic implications for the current investigation into the baby formula crisis sweeping the country.

As recently revealed by senior HHS officials in testimony before the House Energy and Commerce and the Senate HELP Committees, the FDA Commissioner acknowledged his agency was “too slow” to act in recognizing and responding to the baby formula shortage. The delayed response occurred despite extensive resources available to government officials, including data analytics tools, pandemic preparedness plans, and a whistleblower complaint filed with the FDA as early as last October. Still, FDA action on a whistleblower complaint faced a months-long delay due to apparent pandemic-related mail room issues.

As parents and lawmakers around the country demand answers, whether a significant number of employees of the agency responsible for preventing this crisis were showing up to work is deserving of further inquiry. The report is sure to add fuel to the concerns of many looking for answers into this tragic and escalating crisis.

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

“The report’s findings are clearly concerning for an agency so important to responding to a global pandemic and so central to the government’s myriad public health responsibilities as HHS. Sadly, those concerns pale in comparison to the potential revelation that such substantial absenteeism played a role in the baby formula crisis that has been distressing parents of young children across the country for months now. As FGI continues to investigate dysfunctional government, this example likely offers one of the bleakest examples to date.”

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REPORT: Quarter Billion Dollars in COVID Relief Given to Biden Administration Special Interests

Loans given to admin-connected firms were forgiven and at a much higher rate than across PPP program

June 14, 2022

(Washington, DC) – Today, the Functional Government Initiative is announcing the release of a report covering our investigation into Paycheck Protection Program (PPP) loans given – and largely forgiven – to entities with special connections to high-ranking appointees in the Biden Administration.
Among the key findings:

• $272 Million was loaned to the former employers of high-ranking Biden Administration appointees.
• Former employers and clients of nearly one third (31 percent) of the most senior appointees analyzed received loans.
• 95 percent of the loans to these special interests were forgiven compared to PPP’s overall forgiveness rate of 80 percent.
• Eight members of Biden’s Cabinet worked at or with an entity that received PPP loans. 75 percent of the loans given to these entities were partially or fully forgiven.

While the COVID relief program has come under scrutiny by members of Congress and the federal watchdog in charge pandemic oversight, far less attention has been spent on the special connections that benefited from the massive loan program. FGI’s report is the first to dig into the organizations best positioned to influence the highest echelons of the federal government. In addition to more than a quarter billion in taxpayer loans and more than $220 million forgiven, many of these loans received forgiveness in excess of the loaned amount, totaling $1.8 million likely paid to preferred banks and lenders.

If the trend holds across all current presidential appointees, the total amount of COVID relief funds transferred to entities connected to high-ranking officials is set to skyrocket. These revelations raise additional questions:

1) Given the fungible nature of the loans into large non-profit organizations and public affairs firms, were any COVID funds used to lobby the government or fund the efforts of political campaigns during the 2020 election?
2) Did organizations that received loans but saw no decrease in their annual contributions still seek to have loans forgiven?
3) Were national organizations with state or local chapters that individually received loans in violation of the statutory parameters restricting eligibility to the program?

FGI will continue to investigate and provide the public with more insight on how their tax dollars were spent during the COVID-19 pandemic.

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

“As staggering as the numbers are, these findings may expose just a fraction of the PPP funds doled out to high-ranking political appointees’ former employers and clients during the pandemic. If politically connected organizations received loan forgiveness unavailable to the local restaurant that was forced to shut its doors for months due to lockdowns and may never have been able to reopen, that would demonstrate tremendous government dysfunction. FGI will continue to dig deeper into the PPP program so that the American people can discover where their money went.”

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