Privilege Logs Offer a Glimpse into Library of Secrecy

In the interest of transparency in governmental decision making, we are posting some documents related to the litigation concerning the Third Amendment Sweep.

Investors Unite is the largest organization of Fannie Mae and Freddie Mac shareholders. As such, we were able to obtain the logs of documents related to the Sweep for which the U.S. Treasury Department and the Federal Housing Financial Agency seek privilege – that is, concealed from public view.

As we have noted, the government’s effort to conceal documents and communications related to the 2012 decision to sweep the revenues of Fannie and Freddie into the general revenue stream has emerged as an issue of concern independent of the Sweep itself. Fairholme Funds has been stonewalled in the effort to demonstrate the government’s misapplication of the Housing and Economic Recovery Act. John Yoo, a distinguished law professor and top official in the Administration of President George W. Bush, believes the use of executive privilege in this case is unwarranted and overbroad. Writing in the San Francisco Chronicle on March 13, he warned of an “unprecedented and disturbing obsession with secrecy.”

Reporters and commentators on the controversial policies undertaken during the conservatorship of the GSEs have mentioned the enormous volume of documents the government has tried to shroud under executive privilege in this case.  The inordinate level of secrecy has also raised concerns by Senate Judiciary Committee Chairman Charles Grassley.  The New York Times has also gone to court to gain access to some documents.

Currently, Federal Claims Courts Judge Margaret Sweeney is reviewing Fairholme’s motion to unseal many documents.  At the very least, we hope Judge Sweeney’s ruling will result in additional restrictions and more clarity on which documents, if any, justify protection by executive privilege and why.

Regardless of that ruling, which is expected in the very near future, we believe the privilege logs submitted by Treasury and FHFA prompt concerns and skepticism about the very broad assertion of executive privilege.  Just the list of documents, emails and other correspondence for which the government seeks privilege runs for roughly 1,200 pages.  The documents themselves run to roughly 180,000 pages. In addition, even a casual perusal of these logs reveals what seem to be a lot of very routine communications that occur within the government every day, and not simply a handful of high-level memos on policy options under review.

We have long argued the Sweep cannot be justified legally or as a policy matter.  We hope these privilege logs will invite new scrutiny. The government should welcome the chance to detail why its internal deliberations made sense and yielded the policy it did.