Press Releases

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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FTC Response Indicates Active Discussion to Investigate Oil and Gas Industry for Price Gouging

March 21, 2022

(Washington, DC) – In midst of the Russian invasion of Ukraine and skyrocketing inflation and gas prices, the Federal Trade Commission may be months into an investigation of 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 whether the oil and gas industry was illegally profiteering or price gouging customers.

In recent weeks, the President repeated his belief that the oil and gas industry may be price gouging or profiteering, this time citing the wartime circumstances. Whether 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 – gas prices at the pump have hit records highs and were on the rise before the war in Ukraine – the domestic oil and gas industry appears to be a constant bogeyman for the Biden Administration.

In response to a Freedom of Information Act request seeking records around the President’s call to investigate the oil and gas industry, the Functional Government Initiative was recently denied all documents from the FTC. The FTC asserts that every record was part of a deliberative and pre-decisional process. FGI is in the process of appealing the decision. However, if the FTC is complying strictly with the requirements of FOIA regarding disclosing documents, it likely means there are active discussions to initiate an investigation or that an investigation has already begun.

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

“Attorney General Garland’s FOIA memo issued last week highlights the obligation of federal agencies to release all information that is not strictly protected under the law. Accordingly, FGI will be appealing the FTC’s decision to withhold all documents related to a possible investigation into the oil and gas industry. In the midst of record inflation, the Russian invasion of Ukraine, and after a year of shutting down pipelines and calling for a full transition away from fossil fuels, it rings a bit hollow that increased gas prices are anything but an intended result of the Administration’s current move away from energy independence. We will continue to seek access to records so the public can make up their own mind.”

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FGI remains concerned about federal energy policy’s impact on Ukraine war, inflation

The federal government has reversed its initial decision but continues to steer away from energy independence.

March 9, 2022

(Washington, DC) – Yesterday, the Biden Administration announced it would be reversing course and would move to stop imports of Russian oil into the United States market. The Functional Government Initiative announced last week it had begun an investigation into the initial decision to exclude the Russian energy sector from U.S. sanctions. In spite of yesterday’s reversal, FGI’s probe is expected to yield vital information, allowing the American people to better understand the federal government’s energy priorities.

While FGI commends this decision, the American people have legitimate concerns about the impact of energy policy on rising prices, not only on energy but also across the economy. Concerns don’t end there. News about the decision to move away from Russian imports came alongside developments that may simply result in Americans’ depreciating dollar being redirected to another set of hostile foreign governments. American officials have reportedly begun talks with the Venezuelan government that may lead to easing of economic sanctions. These sanctions were originally placed on Venezuela in 2019 after numerous human rights abuses committed by the government under Nicolas Maduro, a close Putin ally. Talks also continue with Iran, the world’s prime state sponsor of terrorism, which may ease sanctions on the Iranian oil sector.

Energy prices have broad and deep effects on virtually every sector of the economy. As fuel prices continue to rise and widespread inflation continues to afflict American families, FGI will continue investigating how energy policy affects our influence abroad and Americans’ pocketbooks at home.

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

“Last week we expressed our concerns regarding the reluctance to sanction the Russian energy market and announced that we would be seeking information surrounding that decision. However, the current situation creates the fear that we may be moving from funding Russia’s war machine to paying the dictator in Venezuela and the state sponsors of terrorism in Iran. The concerns of the Functional Government Initiative remain. We will continue working to expose the dysfunction of government and investigate the impact of today’s energy policy on our foreign policy and near-record levels of inflation.”

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FGI investigating federal energy policy’s impact on Ukraine war, inflation

Following State of the Union, decision to exclude energy sector from Russia sanctions continues to raise questions over U.S. energy priorities and buy American goals

March 2, 2022

(Washington, DC) – The Functional Government Initiative announced today it is seeking information from the federal government on the decision to exclude the Russian energy sector from US sanctions in response to Russia’s invasion into Ukraine. Oil and gas prices have been on the rise since early 2021, tracking several policy decisions to reduce American oil and gas production move the nation towards alternative sources of energy. Indeed, last year financial titan Larry Fink acknowledged the correlation between the pursuit of “green” policies and the nation’s growing inflation problem. 

The geopolitical consequences of the move away from energy independence have gained renewed attention given the recent Russian invasion of Ukraine. Even as the President expressed his desire during SOTU to increase reliance on Made in America and sanctioned the Russian economy in virtually every other area, America has increased oil purchases from Russia to offset the decline in U.S. oil and natural gas production. Now these purchases may be helping finance Putin’s war machine at the same time we are looking for ways to increase sanctions to deter his actions. The conflicting objectives do not end there. While some legislative voices insist that we should stop all Russian imports (including energy), other senior government leaders are both calling for a further reduction of fossil fuels while tapping the Strategic Petroleum Reserve to fend off rising prices.

Last week, FGI announced its efforts to understand whether the government’s senior leaders are prioritizing policies that appear to increase inflation over those that could ease it. In light of the developments abroad, many Americans would likely be surprised to learn that polices aimed at reducing our carbon footprint continue to dominate not only domestic but also foreign policy concerns. FGI will deepen this inquiry to assess what roles inflation, concern over gas prices, and climate change are playing in our foreign policy and how Buy American goals will change the apparent agenda to move away from energy independence.

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

“After last night’s State of the Union, the continued exclusion of the energy sector in the long list of sanctions imposed on Russia is puzzling given the critical role it has played in funding Putin’s invasion into Ukraine. If it turns out that the move away from energy independence is both driving inflation and hampering our ability to punish hostile dictators, the American public is likely to wonder what interests of the American public are actually being advanced. Our information requests into several agencies will explore the basis for the decision to exclude the Russian energy sector from sanctions and whether government officials believe the increased dependence on foreign energy is ultimately beneficial.  This information will allow the public to better understand what is truly happening.”

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Watchdog Investigates Inflation-Related Decisions Amidst War and Rising Energy Prices  

Oil at $100/barrel, war in Eastern Europe, and supply chain crisis all increase need for answers on drivers of inflation

February 25, 2022

(Washington, DC) – The American people recognize inflation levels not seen in 40 years as the top issue facing the country, though events in Europe may soon eclipse this. In its effort to explore the issues most affecting Americans’ daily lives, the Functional Government Initiative (FGI) announced a host of new information requests it is sending to federal agencies whose policies could be contributing to this harmful development.

Experts have been exploring the potential contributors to inflation for many months with no consensus on the primary reason. Among the leading contenders is the COVID-19 pandemic and the nearly $5 trillion in federal spending from “COVID relief bills” enacted in 2020 and 2021. Another factor is the supply chain crisis – an issue FGI will also be digging into in the weeks ahead. Together these factors seem to have caused higher demand and lower supply – a perfect recipe for higher prices.

As oil prices exceed $100 per barrel for the first time in nearly a decade, the U.S. government’s move away from energy independence – a US policy goal dating back at least 50 years – appears to be adding fuel to the fire. For instance, actions to pause new oil and gas leases, restrict pipeline development, and force climate change analysis into all federal government actions have been identified as potentially exacerbating the spike in energy prices, and subsequently most food and consumer product costs. FGI will be exploring the disparate and sometimes contradictory reactions by federal agencies. The areas of inquiry will include the following:

  • Actions to slow gas price hikes using emergency powers;
  • Calls for investigating the meat and energy industries;
  • Efforts to hinder domestic fossil fuel production, halt pipeline approvals, and shut down American mines; and
  • Considerations behind the decision to re-nominate a Federal Reserve Chairman who has presided over 40-year highs in inflation.

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

“For years Washington’s dysfunction has enraged the American public. The Functional Government Initiative exists to explore what is driving that dysfunction and shine a light on the key decisions causing it. Right now, inflation is front and center in this discussion.  The public almost certainly understands that the pandemic has played a part in driving inflation but if it turns out government policies are supercharging that spike in their cost of living, then they deserve to know. A strong economy and a healthy America are goals all Americans share. As we get records back on these key decisions impacting inflation, we will soon find out whether actions of the federal government are aiding or impeding those goals.”

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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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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.