Press Releases

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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IRS: “No records” Analyzing or Discussing Proposal to Increase Agents and Reporting Requirements”

IRS claims no internal communications over controversial changes in Biden budget

April 20, 2022

(Washington, DC) – Earlier this year, the Functional Government Initiative (FGI) sought records surrounding the proposal to dramatically increase IRS agents and resources amidst political targeting and the leaking of sensitive financial data. A particularly controversial proposal, since abandoned, sought to impose a reporting requirement on US banks for accounts involving more than $600 in a year. Today, FGI announced an alarming new development in our investigation: the IRS stated they had no such records involving the request for more resources, new agents, or any analysis that would justify the controversial policy items.

The response from the IRS is not only surprising but also highly unusual for a large government agency requesting an additional $80 billion in taxpayer resources. Their response raises concerns about whether the IRS is behind an effort to withhold public records that could expose damaging internal reactions and analysis underlying the agency’s actions. Other implications are that the agency was left out of the analysis and projections submitted by high-ranking political appointees, leaving the IRS to defend policies they had no part in constructing. Either way, this situation is not an example of a functional government.

The formal response by the IRS opens the door to a multitude of questions surrounding an already controversial policy. Which agency, if any, conducted the analysis justifying the controversial bank reporting requirement to $600? Who at the IRS discussed this policy with Treasury or the White House? Were records properly kept under the Federal Records Act? It is FGI’s mission to shine a spotlight on government dysfunction and we will continue to do just that. FGI is appealing this response and will keep the public updated.

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

“It is astonishing and frankly unbelievable to hear that the IRS claims to have zero records on a budget request and controversial policy proposal personally defended by the Treasury Secretary, one linked to a price tag of $80 billion and more intrusion into Americans’ private bank records. Given the congressional scrutiny and media attention on these proposals, one would think that the IRS conducted a thorough review before rolling it out. Based on their response, the IRS essentially just told us that they had no hand in the review or implementation of a policy that would affect hundreds of millions of Americans. This is exactly the type of government dysfunction Americans are fed up with.”

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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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Critical Minerals Order Continues “Great Transition” Approach; Ignores Pain at Pump

The Federal government reiterates that the only way to lower gas prices is not to use gas at all.

April 7, 2022

(Washington, DC) – Last Thursday, President Biden announced that the Administration would be invoking the Defense Production Act in an attempt to ease potential supply chain issues for electric vehicle components. This order will move funds to private projects for feasibility studies surrounding the extraction of minerals that are essential to building electric vehicle batteries such as lithium, cobalt, graphite, nickel, and manganese. The invocation of this act is the latest attempt from the Administration to move the American public away from gasoline and towards electric vehicles.

This decision comes as the United States is experiencing the highest gas prices in history for the second month in a row. While the Administration continues to point the finger at Russia and the invasion of Ukraine, inflation and rising gas prices preceded Russian tanks rolling toward Kyiv. If the Administration’s effort to encourage more supply of essential minerals is successful, it could reduce America’s reliance on China, but it remains uncertain how this move would ease any inflation concerns or alleviate energy prices in the short-term.

FGI has repeatedly expressed concerns over the federal government’s perplexing response and actions taken attempting to reduce gas prices. Opening up the Strategic Petroleum Reserve and calls to hostile dictators have formed the crux of their approach while requests to reconsider opposition to pipeline infrastructure and oil and gas leases and financing have repeatedly been rejected. The question of which special interests are influencing the government’s anti-fossil fuel policy amid an energy crisis remains the focus of several of FGI’s ongoing investigations and requests for government records. This latest effort only confirms the public interest in finding more answers about how the Administration is functioning.

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

“Exploring the expansion of domestic extraction of minerals is a good step because it may create jobs for the next generation of American workers, but it does not tackle the current fuel crisis. We are on month two of ‘we will do everything we can to lower gas prices,’” yet nothing of substance has been done to accomplish that – as you can see every time you fill up your tank. Either the Administration is hoping the problem will fix itself or that Americans will surrender to astronomically high gas prices. Neither scenario appears plausible. Along with inflation in general, energy prices are crushing the American dream. FGI will continue its investigation of which special interests are dictating the government’s handling of this energy crisis.”

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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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COVID aid program “invitation” to fraudsters, without even “minimal checks” – Federal Watchdog

March 31, 2022

(Washington DC) – Over a month ago, the Functional Government Initiative (FGI) announced a broad investigation into the federal government’s response to COVID-19 and how that response impacted government operations and the lives of American citizens. These investigations take an expansive look into the decisions that quite possibly changed our lives forever.

In an interview with NBC News, the lead federal watchdog overseeing the Paycheck Protection Program (PPP), one of the government’s signature programs set up to assist businesses hit by the pandemic, highlighted the rampant fraud and abuse that the watchdog has discovered. Often, when the federal government has set up large loan programs available to the public in response to an economic crisis, the need for expedited deployment of funds is prioritized over safeguards against fraud. The result is usually a big payout to scam artists and an even larger bill for taxpayers. Unfortunately, the lessons learned from the last crisis spending spree – in the wake of the 2008 housing crisis – seemed to have been thrown out the window yet again.

Despite the unprecedented waste, fraud, and abuse seen in the multiple COVID-related spending programs, there is still much left to uncover. Many of the questionable decisions and reckless government action extend beyond federal spending and encroach into the basic freedoms of all Americans. For instance, where are the data and high-quality studies underlying the cloth mask requirements? Who and what were driving the push for vaccine mandates for all federal government employees and contractors? Why did the government initially restrict monoclonal treatments and was the distribution of these treatments based upon objective criteria? And did the federal government give preferential treatment when it came to forgiving Paycheck Protection Program (PPP) loans? Finding answers for these questions and more is the goal of FGI’s investigation.

While the current probes continue, FGI will proceed with even more investigations as new discoveries come to light. FGI remains committed to highlighting dysfunction in government and providing the transparency the American people demand.

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

“The American people deserve to know the truth about the government’s response to the COVID-19 pandemic, and FGI will continue our search for answers. While many areas of society are returning to a semblance of normalcy, the recent revelations by the federal watchdog in charge of investigating COVID fraud demonstrate there is much more the public should know. Over the next few weeks, we will be announcing more investigations into the federal government’s handling of the pandemic.”

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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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