Watchdog Sues FHFA Over Fannie and Freddie Records
A watchdog group is fighting a legal battle with the Federal Housing Finance Agency (FHFA) over attempts to secure records of political contributions made by Fannie Mae (FNM) and Freddie Mac (FRE) since 2005. Judicial Watch filed its suit after the FHFA denied a May 29, 2009 Freedom of Information Act (FOIA) request, the group said in a press statement. According to the Judicial Watch, the FHFA claimed that while Fannie Mae and Freddie Mac might possess the requested documents, the FHFA was not obligated to release them under FOIA because the agency does not “control” them. Judicial Watch argues that as conservator, it assumed “all rights, titles, powers, and privileges of [Fannie Mae and Freddie Mac], and of any stockholder, officer, or director,” and as such, the government-sponsored enterprises (GSE) are subject to FOIA disclosures. “Until they were seized by FHFA in September 2008, Fannie Mae and Freddie Mac were private corporations with independent directors, officers, and shareholders. Since that time, FHFA, a federal agency subject to FOIA, has assumed full legal custody and control of the records of these previously independent entities. Hence, these records are subject to FOIA like any other agency records,” Judicial Watch said in its filing. According to Judicial Watch’s legal filings, FHFA’s claims that it has merely “stepped into the shoes” of the GSEs is inconsistent with prior FOIA lawsuits. “Apparently, American taxpayers are paying the tab for the collapse of Fannie and Freddie, but are not allowed to ask any questions about why it happened. When it comes to Fannie and Freddie, the Obama Administration is saying, in effect, ‘None of your business,’” said Judicial Watch president Tom Fitton. “Obama Administration officials and their lawyers can argue until they are blue in the face that Fannie and Freddie are not federal agencies, but their reasoning is straight out of ‘Alice in Wonderland,’” Fitton continued. “There is nothing ambiguous about the government’s absolute control of Fannie and Freddie.” The FOIA applies to certain records held by federal agencies, but there are nine exemptions and three exclusions the federal agencies can use to deny claims. The exemptions range from national defense and foreign relations considerations, to “geological and geophysical information and data, including maps, concerning wells.” But the exemptions that would seem to apply in this case are exemption four, “Trade secrets and commercial or financial information obtained from a person that is privileged or confidential,” and exemption eight, “Records that are contained in or related to examination, operating, or condition reports prepared by, on behalf of, or for the use of any agency responsible for the regulation or supervision of financial institutions.” The case is being heard in the US District Court for the District of Columbia. FHFA’s spokesperson did not immediately respond to HousingWire’s request for comment. Write to Austin Kilgore. The author held no relevant investments.