SEC Denies FOIA Request for AIG Records
The Securities and Exchange Commission is storing 46 boxes of information about insurance giant American International Group Inc., plus 39,612 electronic files. But the public apparently isn’t going to see them.
This week the SEC told Corporate Counsel, which had sought information under the Freedom of Information Act, that the request was denied [PDF] because searching such “voluminous records” would be "unreasonably burdensome" on the agency staff.
Corporate Counsel had filed the request in June, asking a simple question: How many reports did corporate monitor James Cole file on AIG between 2005 and 2009, and on what dates?
The agency responded: “Please be advised that the FOIA does not require an agency to review every document or file in its possession to locate potentially responsive records, or to conduct ‘unreasonably burdensome’ searches for records,” according to the letter, signed by FOI research specialist Ollie Wade, who did not immediately respond to follow-up questions.
Scott Hodes, an FOIA expert practicing law in Washington, D.C., told CorpCounsel.com that there is no exemption under FOIA for “unreasonably burdensome” searches. “If they say it’s too voluminous, they need to back that up,” he added, “and not just by citing numbers.”
But Hodes, who formerly worked as an FOIA and Privacy Act attorney for the Department of Justice and the Federal Bureau of Investigation, said the SEC is “technically correct because under the statute, agencies are not required to create a record of their documents.”
But he added that under President Barack Obama’s transparency policy, the agency should be working with requesters to get answers.
“They should have a list or a log somewhere showing when those documents came in,” Hodes said. The agency should be reading the request broadly, he explained, “and if they have a log, they should find it and produce it to you.”
But the government has consistently guarded information about AIG’s wrongdoing and the monitor reports written by Cole, who is now deputy U.S. attorney general at the Justice Department.
For example, the 2004 criminal case against AIG that led to the appointment of a monitor in the first place still remains under seal—with the government’s blessing—in U.S. District Court in Pittsburgh. The deferred and non-prosecution agreements signed by AIG and its subsidiaries in the case, however, have been made public.
The SEC also joined AIG in fighting ALM Media, the parent of Corporate Counsel, last year over our request to see the monitor’s reports written before and leading up to the financial crisis of 2008.
ALM initially won its case for the records in U.S. District Court in Washington, D.C., with District Judge Gladys Kessler writing:
“Given the financial meltdown of 2008, the recession it spawned, and the suffering the country has endured because of it, and given the role that AIG played in that financial meltdown, the public needs to know whether the obligations AIG undertook in [a 2004] consent order were complied with, whether the SEC was carrying out its enforcement and monitoring responsibilities . . . and what, if any, role the compliance—or noncompliance—with the consent order may have played in the devastating events of 2008.”
However, AIG appealed that ruling—without the SEC’s help this time. And the appeals court overturned the decision in February.
Bottom line: The monitor’s reports and all information about them remain locked up in the SEC’s boxes and computers.