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Watchdogs’ Bark Is As Dangerous As Their Bite

Watchdogs’ Bark Is As Dangerous As Their Bite

Led by the Competitive Enterprise Institute, 17 groups signed a letter to U.S. Representatives Patrick McHenry and Al Green asking them to put pressure on the U.S. Treasury to release documents that will provide insight and, maybe, Treasury’s legal reasoning behind its creation of the Third Amendment sweep. News broke this afternoon by Jon Prior of POLITICO, “the groups said that the change announced in 2012 that requires Fannie and Freddie to send their profits to the government was “an unprecedented power grab” and that the legal rationale developed by Treasury at the time should be made public.”

Chairman McHenry and Representative Green sit at a unique intersection in Congress to makes these kinds of demands to Treasury: McHenry is the Chairman of the Oversight and Investigations Subcommittee on the Financial Services Committee and both he and Green are members of the Committee on Oversight and Government Reform. Also, Congress tends to take a pretty dim view when the Administrative branch ignores its efforts at checks and balances.

Other coverage of the letter can be found HousingWireValueWalk, and Seeking Alpha.

The letter lays things out pretty clearly:

Not only is this Third Amendment an unprecedented power grab that violates shareholder property rights, but the process used by the Treasury Department to develop the Amendment provided neither an opportunity for public comment nor the customary transparency safeguards that permit we the people to hold our government accountable. To this day, the Amendment’s provenance remains secret.

The potential seizure of private assets has spawned numerous lawsuits challenging both its constitutionality and lack of statutory authority. Needless to say, it should be incumbent upon the Treasury Department and any other agencies involved to make public all relevant documents associated with the Amendment’s development. Information that comes to light due to the on-going litigation should be made available to the public, but members of Congress also have a responsibility to when they perform the vital function of oversight.

We urge you to demand greater transparency and accountability on this matter by requesting that the Treasury Department turn over to your committee, or otherwise make public, any and all documents shedding light on the alleged need for and legal rationale justifying the Third Amendment, as well as all documents detailing the Amendment’s development and evolution, such as those customarily contained in the administrative docket for an agency rulemaking.

So the watchdog mover-and-shaker groups that signed this letter send a clear signal that the government’s actions concerning the conservatorship and Third Amendment sweep are not above-board and are not acceptable.