Thanks in part to Freedom of Information Act (FOIA) requests, a long-time bulwark against governmental secrecy, we now know that the Securities and Exchange Commission (SEC) repeatedly failed to act on numerous warnings, dating back to 1992, that Bernie Madoff was engaged in a $65 billion Ponzi scheme. Likewise, the SEC also failed to act on tips dating back 12 years that should have exposed Allen Stanford’s billion-dollar Ponzi scheme.
But have no fear, big government is here.
Chris Dodd and Barney Frank have successfully passed, and President Obama recently signed into law, the Dodd-Frank Wall Street Reform and Consumer Protection Act. To hear President Obama describe it, the linchpin of the new law is even greater transparency. Even the White House’s website assures us that the new financial reform law will “increase transparency in financial dealings.” This shouldn’t be surprising. After all, President Obama repeatedly promised the American people the most transparent administration in history.
But no sooner had the financial reform bill passed than the SEC boldly declared itself exempt from FOIA requests. That’s right, folks. The Dodd-Frank financial reform law carves out an exemption for the SEC from the public disclosure requirements of FOIA. In other words, tucked away inside the reform bill was a Trojan horse of opacity, which completely insulates the SEC from outsiders who may want to shed light on its backroom dealings.
Who knew? Many lawmakers have expressed shock and even outrage at learning about the exemption. A bipartisan coalition has just co-sponsored a bill to revoke the exemption. Meanwhile, the unflappable Barney Frank, the law’s lead sponsor in the House, doesn’t see what all the fuss is about.
The central aim behind FOIA is to enable an informed citizenry to hold its government accountable. Every American should be asking, who is seeking to thwart that laudable goal and why.