Press Releases

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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IRS Blocking Release of Records on 2021 Breach of Taxpayer Information

One year after the breach, the IRS refuses to give any answers

June 8, 2022

(Washington, DC) – Today, the Functional Government Initiative (FGI) announced litigation against the Internal Revenue Service (IRS) for violating transparency obligations surrounding the unlawful leak of confidential taxpayer information to ProPublica.

On June 8, 2021, ProPublica released a report that contained the confidential taxpayer information of several wealthy American citizens. The confidential data, protected by law, was obtained either through a breach of the IRS’s systems or through an illegal internal leak. It has been exactly one year since ProPublica posted the stolen confidential data, yet there has been no word from the IRS on what it is doing to discover the source of the leak or implement new systems less susceptible to cyber attacks. Since the breach, the administration has pushed for the IRS to have more oversight than ever before on the finances of American citizens. This request from the administration is alarming itself, but what seems more troublesome is that the IRS would have access to more confidential information than ever before without being able to show that they can protect the current data they already possess.

In February 2022, FGI began looking into the IRS’s internal handling of the leak and any progress they have made in discovering the source of the leak and/or breach. Initially, the IRS appeared to be willing to work with FGI. However, in May after months of conversations with the IRS, they denied FGI’s request to obtain these documents. FGI believes that litigation is now the only course to force the agency to release these documents so the American people can know what they are doing – if anything – to ensure that confidential information for all taxpayers is protected.

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

“It has been 365 days, and the IRS still has no answer for how ProPublica obtained the confidential taxpayer information of American citizens. With a breach as detrimental to the integrity of the IRS as this, one would think that the agency that has access to every American’s private financial information would do everything in their power to discover the source quickly and in a manner that revives public trust in the Service. The systemic issues that allowed the leak, however, appear to be just the latest example of dysfunction plaguing the Service.”

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FTC Refuses to Release Records on Price Gouging Investigation

As gas prices continue to rise, FGI files lawsuit against FTC’s investigation into oil and gas industry

June 6, 2022

(Washington, DC) – Today, the Functional Government Initiative (FGI) announced litigation against the Federal Trade Commission (FTC) for violating transparency obligations surrounding the announcement of a possible price gouging investigation into the oil and gas industry.

In November 2021, with gas prices and inflation already well on the rise, President Biden asked the Federal Trade Commission to investigate possible illegal profiteering or price gouging by the oil and gas firms. The administration has repeatedly responded to crises by calling on the FTC to conduct investigations into related private sector entities. Among the first was the meat packing industry, followed by oil and gas, and most recently the baby formula industry amid the ongoing crisis with that staple. FTC investigations have been the administration’s go-to play in these situations.

FGI began looking into this possible FTC investigation in early January of this year, seeking to discover the conversations and facts regarding the probe. In March, our request for documents was denied. The FTC asserted that every record was part of a deliberative and pre-decisional process. After FGI’s successful appeal of this decision however, the FTC has continued to deny FGI access to these records.

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

“Prices at the pump are at their highest level ever, even before the summer driving season, and the expectation is that there’s no end in sight. The government has continued to point fingers while dismissing any hint that its policies may have contributed to the crisis. If the government really is using its resources to investigate and punish energy producers rather than incentivize them to ease Americans’ pain at the pump, the public deserves to know.”

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Interior Cancels Another Lease Sale While Gas Prices Continue to Skyrocket

Dysfunctional energy policy could be driving Americans’ pain at the pump

May 13, 2022

(Washington, DC) – Yesterday, the Department of the Interior announced it was canceling planned oil and gas lease sales in Alaska and the Gulf of Mexico in the middle of a heightened energy crisis at home and abroad. A Department spokesperson blamed the cancellation of part of the proposed sale on the “lack of interest” from oil and gas companies to drill. Critics of the move were quick to attribute this lack of interest to the federal government’s energy policy.

As one of its first actions, the Biden Administration issued an executive order halting oil and gas lease sales on public lands and waters. Months later a federal judge ordered them resumed. Earlier this year, FGI began an investigation into the federal government’s oil and gas policy, seeking records related to a request for the Federal Trade Commission (FTC) to investigate oil and gas companies for price gouging and records from a variety of relevant agencies around offshore leases. A month into the investigation, the administration announced that leasing sales would resume, though with an 80 percent reduction in acreage and a more than 50 percent increase in royalties. Industry insiders claimed these changes could result in lower production, hampering efforts to reduce prices.

Interior’s decision comes during a time of crisis at the pump, where Americans are paying nearly double what they were two years ago. FGI will continue to press for answers about the federal government’s oil and gas policy.

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

“If there is a better example of the impact of government dysfunction on the lives of Americans, I can’t think of one. No matter how hard they try, the government cannot repeal the laws of supply and demand. It is more than a little puzzling that, at a time of skyrocketing fuel prices and international turmoil involving energy supply, the federal government would make a series of decisions, culminating in the latest cancellation of lease sales, that could serve to restrict energy supply.”

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Interior: Release of Twin Metals records to FGI not in public interest

Interior places obstacles to release of Twin Metals records in formal response letter to FOIA request

April 28, 2022

(Washington, DC) – This past week, the Department of the Interior (DOI) responded to the Functional Government Initiative regarding our investigation into the cancellation of the Twin Metals leases near the Boundary Water Canoe Area Wilderness in Minnesota. DOI determined that FGI’s request for records surrounding the cancellation would not enhance the public’s understanding of the agency’s controversial decision.

The stunning claim came in the context of a request for a fee waiver under the Freedom of Information Act (FOIA). Under FOIA, government agencies are not allowed to charge fees when the release of documents is “in the public interest because it is likely to contribute significantly to public understanding of government operations or activities.” This past week, Interior determined that releasing documents related to Twin Metals to FGI does not qualify, opening the door for Interior to hide the documents from the American people unless FGI agrees to pay ransom in the form of exorbitant fees.

The current Administration has made no secret of the fact that fighting climate change is one of their top priorities. However, they remain extremely inconsistent in their policy decisions surrounding the issue. One day they are handing out billions in new taxpayer loans and subsidies for electric vehicles (EV) and restricting federal approval of new pipelines, but the next day they are tapping the Strategic Petroleum Reserve and calling hostile foreign dictators to establish new lines of oil delivery. The shortage of critical minerals necessary to build wind turbines, solar panels, and EV batteries for the “great transition” has been well-publicized. It’s also well-established that we are overly reliant on China for many of these minerals.

Enter Twin Metals, one of the largest critical minerals mines in the country. If allowed to be developed, the mine could greatly reduce America’s long-term shortage of critical minerals and further the Administration’s renewable energy goals. The site sits on an estimated 95 percent of America’s nickel reserves and 88 percent of its cobalt reserves.

By canceling these leases, as the Department of the Interior did earlier this year, the government is forcing domestic EV companies to rely on China for the extraction of these essential minerals. China currently controls an estimated 85 percent of the global supply of these minerals. In light of the President’s recent invoking of the Defense Production Act to aid domestic production and ostensibly advance just this type of project, it is mystifying why Secretary Haaland and senior leaders at Interior and USDA have made the decisions they did. The bottom line is that with consequences as detrimental as these, allowing the public to review the records on the Interior Department’s actions on the Twin Metals mine is most certainly in the public’s interest.

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

“Interior’s suggestion that releasing the records surrounding the cancellation of the Twin Metals leases to FGI is not in the public’s interest is extremely concerning given the magnitude of Secretary Haaland’s decision. By seeking to impose fees for documents produced by public servants, on public time, and with public resources, the agency is throwing up unjustified barriers to the public learning which special interests stopped the domestic production of much-needed critical minerals. In the meantime, China seems to be the primary beneficiary. FGI is appealing this decision and will notify the public as we actively fight for transparency.”

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