Charles Glasser, global media counsel for Bloomberg News; James Nobles, legislative auditor for the State of Minnesota; and Rebecca Otto, auditor for the State of Minnesota spoke about the secrecy surrounding the bank bailout and other fiscal transparency issues. Jane Kirtley, Silha professor of media ethics and law at the University of Minnesota School of Journalism & Mass Communication moderated. Here are the notes from this NFOIC Summit session:
Charles Glasser on the Bloomberg lawsuit:
- Glasser explains the "great freak-out of 2008" as follows. A network of banks borrow money from the Federal Reserve each night. The money's distributed through a discount window. Bank X says we need $200,000 until tomorrow so our checks clear. That discount window number is public. It's released every morning by the Treasury. The number usually hovers between $1 and $4 million a night. For the federal government, that’s not big money.
- Mark Pittman saw this number climbing. He noticed that the overnight window ballooned to $400 million inside two weeks. He called the Federal Reserve, which said that information is proprietary and can't be released. The Federal Reserve is lending public money to private banks but saying it doesn't have to disclose the criteria for collateral. What did the federal government take in return as a promise for your money? And on what terms was your money given and to whom?
- Bloomberg filed the lawsuit in November, and it's still under advisement. The suit's been assigned to a friend-of-the-press judge in the southern district, so Bloomberg is hopeful.
- Glasser said the fact that Bloomberg had to file this suit is something in and of itself that should raise your ire.
- Great credit goes to Matt Winkler and Mike Bloomberg, who from day one told reporters and editors to do the right thing and they'd deal with the cost later. So far the cost is estimated at $125,000.
- Two weeks after Bloomberg filed the lawsuit, FOX News announced that it was suing the federal government without any mention of Bloomberg. "The boat is always big enough," Glasser said. The more people involved, the better.
- The best federal agency to comply with FOIA requests was the Department of Defense, and this was under the Bush administration. The Securities and Exchange Commission rated the worst. It's the one federal agency that was created to promote transparency and fairness in the market.
- Bloomberg filed a FOIA letter to the Board of Governors for records on how much money was lent in a certain time period and under what terms. It resulted in a de facto denial. The board didn't respond. Bloomberg kept at them and received a response 30 days late. It said the material is considered proprietary trade secret and would cause harm to the parties involved. The Fed was basically saying if the public knew which banks were in trouble, the banks would get in trouble because of a run. In the meantime, the Troubled Asset Relief Program was announced. Bloomberg noticed that when a company announced that it was applying for TARP, its stock would jump. Investors felt better with a company that had the backing of the federal government. Therefore, this argument that knowing what banks were bailed out would cause competitive harm makes no sense.
- Bloomberg is now hoping to at least prove that the Board of Governors is FOIA-able.
- Bloomberg has launched a new iniative that has tasked all investigative reporters to use FOIA aggressively. In the Bloomberg terminals are built-in internal functions called FOIA Go, which provides guidelines and templates for FOI requests in most states and some nations.
- Rebecca Otto oversees local government spending. She helped revamp reports by telling her staff that if no one understands them, we're not doing our job. She aimed to make them understandable and nonpartisan. Her office did that by creating easy-to-read executive summaries with the report's most important information and references to page numbers of the report.
- Her office as overhauled the Web site so that audits and special investigations were easy to find online. She asked the media to sign up the her office's weekly newsletter, and she works closely with reporters to help them ensure their stories are accurate.
- When her office audits local governments, the audits are public. It's not as transparent when private CPAs audit local government. Their papers are sometimes proprietary. The same thing with special investigations done by her office versus by private investigators.
- James Nobles audits state government and outline four things needed for good government.
- Strong laws that require records to be open. Minnesota has a presumption that all government data is public unless specifically classified by law as otherwise. Nobles would like to get to the point where citizens would have access to raw data related to the state's accounting system. The problem is how to also protect for privacy.
- Active, vigorous citizen participation in government.
- A vigorous media. Nobles worries about the diminished resources of media and whether investigative work will continue.
- Paid agents of accountability. It's important in every state that there are independent agents to dig out data about how the government is spending money.