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The FOI Advocate is a compendium of ideas, edited story excerpts and other materials from a variety of Web sites, as well as original concepts and analysis. When the information comes directly from another source, it will be attributed and a link will be provided whenever possible. The blog relies on the accuracy and integrity of the original sources cited. We will correct errors and inaccuracies when we become aware of them.

Thursday, April 16, 2009

Bloomberg argues that taxpayers are 'involuntary investors' who need bailout info

Yesterday, Bloomberg News filed its Memo of Law for Summary Judgment, which argues that as "involuntary investors," taxpayers should have access to information on which U.S. banks were provided emergency funding. Banks have opposed the release of this data because of its potential to "fuel market speculation and rumors." Bloomberg replied that “these speculative injuries relate only to the reactions of customers, shareholders and other members of the public, not to competitors’ use of the borrowers’ proprietary information to their advantage,” the exception to disclosure under the FOIA law. Bloomberg data indicates that more than $12.8 trillion in government loans, spending or guarantees have been used to rescue the financial system since August 2007.
The Federal Reserve should identify U.S. banks funded by its emergency lending because taxpayers are “involuntary investors” who need to know the risks, Bloomberg LP said today in a court filing.

The Fed refuses to name the borrowers, the amounts of loans or assets banks put up as collateral under 11 programs, arguing that doing so might set off a run by depositors and unsettle shareholders. Bloomberg, the closely held New York-based company majority-owned by Mayor Michael Bloomberg, sued Nov. 7 under the Freedom of Information Act on behalf of its Bloomberg News unit.

“The Board’s arguments are based on wispy speculation, lack evidentiary support and are contradicted by economic theory,” said Thomas Golden and Jared Cohen, lawyers with New York-based Willkie Farr & Gallagher LLP, in a motion asking the judge to require disclosure. “These government actions, which have been shrouded in secrecy, are at the heart of Bloomberg’s FOIA requests.”


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