Rob Reuteman, president of the Society of American Business Editors and Writers, issued this statement Wednesday in reaction to new laws allowing the federal Securities and Exchange Commission to ignore public and press requests for government documents in its possession:
“The Freedom of Information Act, which became law in 1967, has been of immeasurable aid to public understanding of government operations – and sometimes its misdeeds. Often, through the workings of a free press, government agencies have been forced to comply with public information requests even if the information released places those same agencies in a bad light. The public has been served by such practices.
“For instance, we now know that the SEC itself botched investigations of Bernie Madoff, who fleeced investors of tens of billions of dollars and now sits in prison. The SEC has been forced to institute internal reforms as a result of its own investigative shortcomings that came to light. Hopefully the SEC is better able to protect the public from financial crooks as a result.
“But under the provisions in this new law, the SEC no longer has to comply with such requests for information. They claim it will better allow them to obtain the documents they need to prosecute criminals, that such documents will be withheld from them if there is a chance they will see the light of day.
“Don’t fall for that line of reasoning. Government agencies have always been able to censor the documents they are forced to release, in order to withhold such sensitive information. Journalists have been able to construct important stories from heavily redacted government documents for decades.
“But allowing a government agency to ignore such requests for information, as this provision does, appears to roll back 43 years of transparency in government under the Freedom of Information Act. SABEW finds it particularly distressing that this new cloak of secrecy comes in spite of President Obama’s declaration that the new law will ‘increase transparency in financial dealings.’ “
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Has anyone at SABEW, Fox, or anywhere else actually *confirmed* the interpretation they are all assuming is accurate?
To my understanding, the law allows the SEC to withhold records it obtains from examiners who crawl all over broker-dealers. These same records are what the agency would use to sanction broker-dealers who have violated the law. For people to start demanding those records would be akin to submitting a FOIA request to the Justice Department to review records the DoJ is using in a *pending* prosecution. There's no way that would fly, and it's plausible to argue the same shouldn't fly here.
Likewise, the Dodd-Frank Act does *not* suddenly allow the SEC to ignore FOIA requests for, say, the appointment schedules of commissioners or travel records of enforcement staff. Those sorts of requests would still need to be answered in a timely manner.
At least, that's my understanding of this mess. I'm still waiting for the SEC to publish a formal statement about this, or for someone from Congress to announce what the intent of the law actually was.
When my choice is to assume Fox has it right, or to assume we don't yet know what's going on-- well, I choose the latter.