Agency doesn’t have to turn over Fannie Mae, Freddie Mac info

Tuesday, August 23, 2011

Several politicians likely are breathing easier after the recent federal appeals court decision in Judicial Watch, Inc. v. Federal Housing Finance Authority.

On Aug. 5, the U.S. Circuit Court of Appeals for the District of Columbia ruled that the Federal Housing Finance Agency could deny a Freedom of Information Act request for records showing how much money the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) gave to political campaigns in the years leading up to the financial crisis in the housing industry. In doing so, the court said that these records could be withheld because the FHFA had not read or relied on them.

As private corporations, Fannie Mae and Freddie Mac were not subject to the FOIA. In September 2008, however, the organizations were placed under the conservatorship of the FHFA, a federal agency Congress created to ensure the companies’ solvency. In May 2009, Judicial Watch requested under the FOIA that the FHFA disclose all Fannie Mae and Freddie Mac records concerning the corporations’ campaign contributions.

After the FHFA refused the request, Judicial Watch sued. Before the federal district court in D.C., the FHFA acknowledged it had access to the requested documents but argued that they were not “agency records” under the FOIA because the FHFA had not read or relied on them. The district court agreed and granted the FHFA summary judgment.

The D.C. Circuit affirmed the trial court’s ruling, relying almost exclusively on its 1996 decision in Burka v. U.S. Department of Health & Human Services. In Burka, the court adopted a four-part test to determine whether a document in an agency’s possession is an agency record subject to the FOIA.

Under the Burka analysis, a court first should consider whether the document’s creator intended to retain or relinquish control over the record. Second, the court should ask whether the agency is able to use and dispose of the record as it sees fit. Third, the court should consider the extent to which agency personnel have read or relied on the document. Fourth, a court should examine the degree to which the agency has integrated the record into its files.

Applying Burka to the Fannie Mae and Freddie Mac records, the D.C. Circuit held the documents satisfied the first and second criteria but failed the third and fourth. The mere fact that the FHFA possessed the records, the court said, could not overcome the fact that the FHFA had not read or relied on them.

“Although we appreciate Judicial Watch’s interest in how much money Fannie and Freddie gave to which politicians in the years leading up to our current financial crisis,” the court wrote, “satisfying curiosity about the internal decisions of private companies is not the aim of FOIA, and there is no question that disclosure of the requested records would reveal nothing about decisionmaking at the FHFA.

“We therefore hold that where an agency has neither created nor referenced a document in the ‘conduct of its official duties’ … the agency has not exercised the degree of control required to subject the document to disclosure under FOIA.”

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