What is Obama Hiding? Appeal Filed in Fannie Freddie Lawsuit

Judicial Watch’s pursuit of records detailing Fannie Mae and Freddie Mac’s political contributions continues. We recently filed an appeal with the U.S. Court of Appeals for the District of Columbia Circuit in our lawsuit against the Obama Federal Housing Finance Agency (FHFA).



According to officials at FHFA, the agency might possess documents responsive to our Freedom of Information (FOIA) request, but they won’t give them up without a fight. In fact, the agency claims it is not obligated to release any such documents to the public. Our position is that now that Fannie Mae and Freddie Mac are wholly operated by the federal government these records are subject to FOIA law. Here’s a squib from our appeal:
...the boards of both Fannie Mae and Freddie Mac accepted conservatorship by the FHFA with the full knowledge that the FHFA would obtain all rights, titles, powers, and privileges of the enterprises, including legal title to their books and records.

Since that time, the FHFA, a federal agency subject to FOIA, has had full legal custody and control over all of the records of Fannie Mae and Freddie Mac.

Because the FHFA obtained these records and has exercised full legal control over them since it placed Fannie Mae and Freddie Mac into conservatorship, the requested records became subject to FOIA just like any other agency records.

We filed our original FOIA request on May 29, 2009. The FHFA acknowledged receipt of the request July 1, 2009. The agency claimed that while Fannie Mae and Freddie Mac might have the records, the FHFA was not obligated to release them under FOIA because the agency does not “control” them.

As the Obama administration said in its court filing, “...Any records created by or held in the custody of the Enterprises [Fannie Mae and Freddie Mac] reflecting their political campaign contributions or policies, stipulations and requirements concerning campaign contributions necessarily are private corporate documents. They are not ‘agency records’ subject to disclosure under FOIA.”



Unfortunately, this thin legal argument found favor in the District Court, but it was a close call. The court agreed in large part with Judicial Watch’s legal argument. However, in what we have described as a “split decision,” the court ruled that the FHFA did not ultimately control the records and therefore denied the American people access to them.

Let’s take a quick look at the court’s analysis.

There were two main questions in determining whether the FHFA records relating to Fannie and Freddie are subject to FOIA.

First, were the records created or obtained by a federal agency? The Court answered “yes” to this question and in favor of Judicial Watch’s position.

Second, does the FHFA control the records? The Court applied a four-pronged test to determine whether or not a federal agency has “control” over records:
(1) the intent of the document’s creator to [either] retain or relinquish control over the records; (2) the ability of the agency to use and dispose of the record as it sees fit; (3) the extent to which agency personnel have read or relied upon the document; and (4) the degree to which the document was integrated into the agency’s record system or files.

The District Court ruled in favor of Judicial Watch on the first two factors. However, the court ruled the latter two factors did not demonstrate control by FHFA and concluded that these factors outweighed the first two.

We countered this in our most recent appeal.

Our lawyers pointed out that it is not necessary for the court to apply the four-pronged test in this case because none of the previous cases referenced by the District Court involved records transferred to a government agency by the plain language of a congressional statute: “In every meaningful way, the FHFA is lawfully in control of these records. There is nothing contingent, hypothetical, indefinite, or limiting about this plain statutory language vesting the FHFA with both legal custody and lawful control over the records.”

Nonetheless, according to Judicial Watch’s analysis, taken together at least three of the four factors demonstrate the FHFA’s full control over the records.

Why are we so intent on gaining possession of these records?

Members of Congress have received more than $4.8 million in political contributions from Fannie Mae and Freddie Mac over the last ten years. According to OpenSecrets.org, from 1998 through 2008, the top ten recipients of Fannie Mae and Freddie Mac’s political largess are as follows: Senator Dodd (D-CT), then-Senator Obama (D-IL), Senator Kerry (D-MA), Senator Bennett (R-UT), Rep. Bachus (R-AL), Rep. Blunt (R-MO), Rep. Kanjorski (D-PA), Senator Bond (R-MO), Senator Shelby (R-AL), Senator Reed (D-RI).

Senator Dodd, the top recipient of Fannie Mae and Freddie Mac campaign contributions, was Chairman of the U.S. Senate Committee on Banking, Housing, and Urban Affairs, which is responsible for regulating the mortgage industry. Notably, President Obama was a top recipient of campaign monies despite being in the Senate for only three years.

Fannie and Freddie used these political contributions to protect themselves from being held accountable as the housing market was set up for collapse. Now, as a result, taxpayers are on the hook to Fannie and Freddie for at least $400 billion — and $5 trillion in mortgage liabilities. Simply put: We believe the American people deserve to know the full truth about the partnership between Fannie and Freddie and their allies on Capitol Hill.

Certainly this administration has the political interests of Obama in mind when it tells the American people not one thing about how taxpayer-backed entitles helped fund his political rise.

To stop and expose this corruption, Judicial Watch has gone to court after court. Now we hope the appellate court puts a stop to the Obama administration’s unprecedented secrecy and releases these documents.

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