FDIC sends a big F-U: completely blacked out documents in response to WaMu takeover freedom of information requests

Discuss

31 Responses to “FDIC sends a big F-U: completely blacked out documents in response to WaMu takeover freedom of information requests”

  1. Anonymous says:

    For 2009, I am turning in my tax forms this way.

  2. LILemming says:

    Note to the University of East Anglia:

    This is actually a much better way to avoid FOIA than deleting files. ;) Still clumsy though.

    Seriously though, as someone who has to live with FOIA I’m just amazed at how foolish some people are. I mean, did anybody really think this kind of nonsense is going to work? That any reasonable judge would let this stand?

  3. Anonymous says:

    Like several other posters, I have handled federal FOIA requests. The law mandates and requires disclosure, with several exceptions, most of which are narrow. Unlike the above posters, I believe that the review will not give more meaningful disclosure.

    There is one very large FOIA exception which is almost never used outside of agencies that regulate banks, and most FOIA officers are therefore not familiar with it: the financial institution exception. For many very good reasons, records involving financial institutions are not FOIAable, and this request seems to fall smack into the middle of that exception. Essentially, you have a right to know what the government is doing, and the government has a right to know what the banks are doing (in return for allowing them to be banks), but you as a private citizen do not transitively have a right to know what the banks are doing.

    I agree with my colleagues who believe this response was unprofessional and overbroad. Upon review however, little of that black ink will disappear.

  4. Anonymous says:

    Given enough chemistry or Xray or carbon dating technology, couldn’t whatever’s obscured by the sharpie be revealed. Sounds like it could be a fun experiment for a bored graduate student with access to the right toys. Of course, that would only mean the next document sent out in response to FOIA would be redacted with an exacto knife.

    Dan

  5. Anonymous says:

    boy, i read things like this, and I’m shocked that we can still speculate about them openly on the internet here in the us.

    Did you clear that comment?

  6. WaMuWd says:

    The OTS/FDIC claimed WaMu was suffering from a liquidity crisis when they seized and sold the 300 billion dollar bank to JP Morgan Chase for 1.8 billion dollars.

    Unfortunately WaMu had over 30 billion dollars in liquidity when it was seized.

    http://www.youtube.com/watch?v=Zx-BNk4QnTY
    http://www.youtube.com/watch?v=Lra79RZztrM
    http://www.youtube.com/watch?v=7HW7JjnoqGo

    The FDIC is required via the FDI Act to maximize the value they get for assets in their receivership and as such they’ve been sued for selling hundreds of billions in assets for less than $2 billion. JPM was also gifted assets that didn’t even belong to the bank, but rather to the bank’s holding company. There are currently lawsuits in Delaware, Texas, and DC as WaMu tries to get compensation for it’s property. The FDIC didn’t even give WaMu’s holding company the 1.8 billion they got for the bank.

    Sheila Bair told the world the transfer of WaMu Bank to JPMC cost the FDIC nothing and as such it was a great success. It appears the “success” was sooo great that the FDIC managed to score themselves 1.8 billion in profit.

    Remember, shareholders and bondholders were wiped out in this ordeal and it played a huge role in taking down the economy in September of 2008. Ironically, it DIDN’T even have to happen.

    For many of the facts read through:
    http://www.wamuequity.org/welcome-to-wamuequity-org/
    http://wamuqd.com/

    Also note… JP Morgan is being investigated as we speak. WaMu’s legal team is going through thousands upon thousands of documents in search of proof that JP Morgan colluded with moles at WaMu, violated confidentiality agreements signed with the heads of WaMu stating they wouldn’t buy the banks assets from anyone but the holding company, and manipulated the press to create panic surrounding Washington Mutual to make it possible for Chase to “steal” the assets through the FDIC.

    Pay attention to this story. The media has ignored it for a year and a half, but now… it’s beginning to get ugly. At some point, the regulators are going to have to PROVE why they seized the bank and why they lied about the circumstances used to justify it in the first place… hence the heavy redactions.

  7. F says:

    I worked for the Department of State’s FOIA office for a couple of years. It was a serious office, with lots of prior training and review processes, and I flatter myself that we did a good job of preventing the release of stuff that needed to be kept out of the public domain, and released a lot of stuff that on casual glance appeared to be something we might have wanted kept out of the public eye (frequently because it did not paint the DOS in a particularly good light). Our default position was “release unless compelling reasons exist to withhold” and I released material I wish I had not had to release.

    I am not able to read the handwritten list of exemptions at the top of the document, so I cannot judge their accuracy, but I’m guessing that there are NOT 5 exemptions that can be cited to black out this entire document. If I were the recipient you can bet I would ask for review. At the DOS this was a two-step process: a senior reviewer would re-read the records and see if he concurred, and if that did not satisfy the requester he or she could ask for judicial review (which on the few occasions that I saw it happen generally released additional material.)

    And BTW, the FOIA does NOT require release of records in 20 days; it requires a reply. We used to have a boiler plate reply that we sent right away saying we had found x number of records and would send them along as soon as they had been reviewed and redacted as appropriate. F

    • CANTFIGHTTHEDITE says:

      Thanks for the details! I didn’t know that you could request a judicial review. Were there any special requirements for getting a judicial review?

  8. Anonymous says:

    As a Department of Defense employee who has had to respond to FOIA requests on a couple of occasions, I can say from experience that FOIA exclusions are relatively few and relatively narrow in definition. I would guess that this is a pretty egregious abuse of the law. It should be pursued.

  9. Anonymous says:

    Thanks for posting that. I appreciate it when people let us know how things really work from the trench perspective :)

  10. Anonymous says:

    Very nice to see comments on the WAMU side.

  11. Anonymous says:

    When the government releases redacted documents, I wonder why the government even uses paper documents. No paper, no paper trail right? That said, maybe WaMu had something to do with aliens, cause that doc looks a lot like, well any doc pertaining to UFOs. :)

  12. Anonymous says:

    How is this lack of transparency hurting us all? It goes to the heart of why banks are NOT providing credit. (1) they can borrow at zero percent from the gov’t and invest in liquid trading securities at a much higher rate, so why lend? (2) banks see what happened to Wamu — i.e., the gov’t can swoop in and wipe you out even if you exceed all so the so-called regulatory requirement and are perfectly solvent (http://www.portfolio.com/industry-news/banking-finance/2009/12/07/why-federal-regulators-closed-washington-mutual/) — so why add any risk to your book if you can’t trust an erratic gov’t with no transparency (http://seattlebubble.com/blog/2009/12/11/an-unprecedented-level-of-openness-in-government/#comment-89511)?

    Who knows what the gov’t is going to do? Uncertainty relating to the elephant in the room (the gov’t) that just may stomp on and squash you is causing banks and businesses to freeze all long term risk taking, i.e., no hiring, no lending, … It’s a vicious circle that won’t end until the government provides openness/transparency and private-sector-friendly policies. Otherwise, those of us out of work are going to be destroyed as jobs don’t materialize, and those of you working are going to see your investments decline before too long unless you pull out of risk assets too.

    The solution to creating jobs again is simple: IT’S UP TO THE GOV’T TO REALLY PROVIDE TRANSPARENCY AND CERTAINTY RE POLICIES THAT ARE PRIVATE SECTOR FRIENDLY.

  13. Sork says:

    They tried to release documents in electronic form but the sharpie just stuck on the monitor.

  14. Anonymous says:

    So they’re covering up JPM Morgan banking shenanigans… exactly what I’d expect from the FDIC.

  15. mdh says:

    Used to be the government was transparent to the people. And now it’s backwards.

  16. Revan343 says:

    Too bad they actually learned their lesson, for once, eh? It woulda been funny if they had done what the TSA did. Hey, that looks like it was scribbled out with a Sharpie…

  17. Anonymous says:

    Next time CMS wants to see my medicare charts or I get sued I am gonna try the black marker method. I think a standard is being set here. And when the state medical board tells me I have ten days to comply…I’ll just tell them I am “drowning in paperwork”..yah, come visit me in jail.

  18. Anonymous says:

    There is something smelly lurking here. One is thankful that these clowns over did it in their censorship. This will assure more probing. It’s always the cover-up and not the crime that gets one in hot water.

  19. mdh says:

    How seriously they take their responsibility to us – it’s spelled out in black and white.

    Just look at it.

  20. Anonymous says:

    The exemption list under FIOA limits what can be given to the public (usually for security reasons, or to protect an individuals personal privacy), but this is just ridiculous. Hopefully somebody takes this to court.

    At the very least somebody should be able to get an in camera inspection.

  21. IamInnocent says:

    As long as there isn’t any oversight of what gets censored any kind freedom of information act become the negation of itself. This much is obvious.

  22. CANTFIGHTTHEDITE says:

    Couldn’t they, at the very least, given us some “the”, “that”, “of”, “or”, “and”, and the like amongst the redactions to placate the gentry?

  23. Anonymous says:

    On the plus side, there is very little text remaining, so as long as your imagination matches there line lengths, they can hardly complain about taking things out of context.

  24. Anonymous says:

    The Shrub doctrine still works.

  25. Anonymous says:

    The FDIC’s response is not only arrogant, unproffesional and spiteful, it’s an affront to the law and a waste of paper.
    Their chosen way of saying “fuck you” could have been done with those two words in an email to whoever sent the Freedom of Information Act request.

  26. Phikus says:

    “We’re drowning in paperwork” -Somebody’s got to mark out all this text before we can release it…

  27. RevEng says:

    Yes, you have a right to know what your government is doing. And yes, you have a law pronouncing that right. Now all that stands in your way is the government.

    The police, the courts, and certainly the government agencies themselves don’t care. Nobody wants to air their dirty laundry in public, especially not the corrupt police, courts, and other government bodies. Why would one of them take the stand to defend your right to know, when they could be next?

    It’s not a conspiracy, it’s just a group mentality. It’s not in their best interest to tell you (at the least it’s extra work and at worst it shows the mess they’ve made) and, since none of them want to have to be transparent, none of them will help you fight for transparency.

    Ironically, they expect us to do the same. None of us would fight to have CCTV cameras all over our streets and homes, monitored by unknown people, recording unknown information, all without our knowledge, but the government not only tells you its for your own good, they turn around and do it without your permission.

    We can’t even fight for our rights, but they can write their own. Now tell me, who will be the first to pick up the pitchforks?

  28. zandar says:

    boy, i read things like this, and I’m shocked that we can still speculate about them openly on the internet here in the us.

  29. Anonymous says:

    Well agencies are required to RESPOND to a FOIA request in 20 days. Certainly many FOIA requests are either so broad, or require so much review that it would be impossible to provide the documents in 20 days. So the response can be a simple as a letter explaining that “we’re still looking.”

Leave a Reply