The Administration

Making transparency great again in the Trump administration

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Donald Trump won the presidency without offering a platform addressing every question under the sun. While this gives him flexibility in reversing Obama policies, or distancing himself from Republican Party orthodoxy, it also concerns those who worry about Trump’s possible misuse of presidential power.  

The new administration can signal its commitment to restoring a presidency within its proper constitutional bounds by changing the White House attitude toward executive privilege.

{mosads}In his eight years in White House, President Barack Obama pressed claims of secrecy from the courts and Congress to unacceptable limits. Even though the Constitution protects executive communications only when they relate to the President’s military, diplomatic, and law enforcement functions, the Obama White House has used executive privilege to shield his administration’s activities from proper oversight by Congress and the courts.  

His administration, for example, refused to cooperate with proper congressional inquiries into the failed “Fast and Furious” gun-running sting operation, which resulted in the death of U.S. Border Patrol Agent Brian Terry. The White House’s refusal to cooperate forced Congress to issue the first contempt citation of a sitting Attorney General.

Obama has even gone so far as to claim privilege to withhold documents in lawsuits over the federal takeover of Freddie Mac and Fannie Mae during the 2008 financial crisis. These cases involve the federal government’s seizure of the value of shares held in the two government-backed mortgage companies. These financial transactions involved no state secrets of great import, unlike military plans or diplomatic negotiations, but their exercise infringed upon the individual right of private property. Upon taking office, President Trump and Attorney General Jeff Sessions can signal a commitment to a more restrained executive branch by dropping the Obama administration’s stubborn refusal to reveal what it knows about the takings of property in these cases.

Shareholders in Fannie Mae and Freddie Mac brought suit three years ago against the Obama administration’s decision to divert Fannie and Freddie’s earnings to the government. At the time, investors said what has come to be called the “Net Worth Sweep” constituted a governmental “taking” of private property, for which they are owed just compensation under the Fifth Amendment to the U.S. Constitution.

Fannie and Freddie are chartered by the U.S. government, but owned by shareholders. They are housing finance companies that buy mortgages on the secondary market with the implicit backing of the federal government. They were put into conservatorship amid the turmoil of the 2008 financial crisis. The Federal Housing Finance Agency (FHFA), the agency designated as conservator (at the apparent urging of the Treasury Department) ordered the seizure of their profits once they were back on their feet. The FHFA argued that the government was owed the funds because the companies were still in financial peril and would likely require more taxpayer money to keep them afloat.

Filing suit in federal court, investors claimed that the government had no authority to seize the profits of Fannie Mae and Freddie Mac, which essentially rendered their shares worthless. The feds provided access to some documents as part of the normal discovery process in civil lawsuits, but then sought and received a protective order to prevent the disclosure of thousands of other documents. Only lawyers for the plaintiffs, and not the public, could review the documents covered by the protective order.  On top of that, government lawyers asserted various forms of executive privilege over roughly 12,000 additional documents.  They suggested that the information was so sensitive that not even plaintiffs’ lawyers could review them. This was an unprecedentedly large number of documents and completely challenged the traditional concept of executive privilege.

The 1973 case that established the modern standard on “executive privilege” forced President Richard Nixon to disclose the Watergate tapes. The U.S. Supreme Court acknowledged the need to keep high-level communications private in the interest of making sure presidents would receive candid advice, and it emphasized the need to protect discussions involving foreign policy and national security. Nevertheless, the justices overrode Nixon’s claim of privilege in favor of the constitutional right of the Watergate burglars to use the tapes in their defense to criminal charges — a right guaranteed by the Sixth Amendment. The Court refused to provide a blanket privilege that could be invoked by the President to deny the public or Congress access to government communications and directives.

For nearly eight years, the White House has asserted that disclosure of its role and direction in the ‘sweep’ must be withheld because either it could be disruptive to the financial markets or alternatively could threaten national security. There is little chance that discussions between government bureaucrats on Fannie and Freddie’s financial health would destabilize capital markets — and even if they might, that is not a constitutional ground for executive privilege. This information is nearly 10 years old. It could not have any relevance to national security or diplomacy. Its disclosure is necessary for investors to defend their constitutional right against a government taking of private property without just compensation.

Judge Margaret Sweeney of the U.S. Court of Federal Claims has taken a consistently skeptical view of the government’s assertions almost from the start. Last spring, when the Feds attempted to regroup and set aside a much smaller portion of the 12,000 documents as protected, she rejected the request. “The court will not condone the misuse of a protective order as a shield to insulate public officials from criticism in the way they execute their public duties,” she wrote.

Last fall, she granted plaintiffs’ motion to compel the government to produce 56 randomly selected documents over which the government had asserted various forms of privilege. She reviewed each document and concluded the government failed to demonstrate that the privilege applied in any of the documents.  

Even if, hypothetically, various forms of privilege did apply, she affirmed that the shareholders’ right to access the information would have to prevail on each and every document. This was sharp blow to the government’s position but it was consistent with rulings since Nixon: Only in narrow cases can the public’s right to know about their government’s actions and a plaintiff’s right to press a case against the government’s possibly unconstitutional conduct be subordinate to government claims of secrecy.    

Indeed, a select number of documents that have been unsealed during the litigation have cast doubt on the government’s rationale for the Net Worth Sweep and whether it violated the law that established the conservatorship, the Housing and Economic Recovery Act of 2008. These releases also reflected poorly on the government’s reasons for such a sweeping assertion of secrecy. These revelations and issues of transparency are likely to have a bearing on a pending decision by a three-judge panel in the U.S. Court of Appeals for the District of Columbia on another shareholder suit against the government. An opinion in that case could come any day.

In the meantime, the best approach would be for the Federal Government to withdraw its claim of privilege, which could be hiding law breaking, political interference or any other activity that should be subject to public review and critique. When Attorney General Sessions is confirmed, this will be one of his first decisions.

Regardless of how the litigation unfolds or what the Trump Administration’s policy will be with regard to housing finance and Fannie and Freddie, the principle of transparency in government must be upheld. The public’s right to know about the operations of government transcends partisan politics. With Attorney General Sessions, the White House and the Judiciary all in agreement we can make transparency in government great again.

John Yoo is the Emanuel Heller professor of law at the University of California Berkeley and a visiting scholar at the American Enterprise Institute. Horace Cooper is a fellow with the National Center for Public Policy Research.  

The views expressed by contributors are their own and not the views of The Hill.

Tags Barack Obama Donald Trump Donald Trump Jeff Sessions Trump administration

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