29 de enero de 2019
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By letter of August 10, 2018, you submitted a Freedom of Information Act (FOIA) request. You requested documents regarding a financial entry on the December 2017 consolidated Asset Management Estate (AME) financial statements labelled "Liquidation Expenses: NGN Maturity Related," totaling $767 million distributed among the five liquidation estates. You requested documents regarding this entry including memos, emails, valuations and transactions entries showing the basis for these five amounts.
By letter of October 4, 2018, a senior attorney advisor in the NCUA's Office of General Counsel responded to your request and advised that your request was granted in part. Four pages of publicly releasable responsive records were attached in full; however, additional information was withheld as exempt from FOIA release under one or more of the exemptions at 5 U.S.C. § 552(b)(4), (5), and (8). The senior attorney advisor's response explained that exemption 4 protects trade secrets and commercial or financial information obtained from a person that is privileged or confidential. Exemption 5 protects inter-agency or intra-agency memoranda or letters which would not be available by law to a party other than an agency in litigation with the agency. Exemption 8 protects matters that are contained in or related to examination, operating, or condition reports prepared by, on behalf of, or for the use of an agency responsible for the regulation or supervision of financial institutions.
You appealed this determination in a correspondence dated December 28, 2018. Your appeal is denied, as discussed more fully below.
In your appeal, you asserted that the October 4, 2018 letter was not responsive to your request because rather than original documents it provided a newly created "public relations" summary document, explaining but not documenting the $767 million expense accounting entries. In fact, however, the information provided with the October 4 letter is responsive to your request. The FOIA does not require agencies to respond to requests by creating records or otherwise modifying exempt information to make it disclosable.1 However, the FOIA likewise does not prevent agencies from creating responsive, releasable records.2 The summary document provided explained that the Corporate AME Recoveries and Claims report for Q4 2017 included, under the Liquidation Expenses category, a new line item "Liquidation Expenses - NGN Maturity Related," to distinguish these involuntary funding requirements from claims attributable to the maturity of an NGN trust. The document further explained that, prior to Q4 2017, NGN Maturity Related amounts pertaining to NGN trust maturities were located in the "Liquidation Expenses - Other" line item. However, during Q4 2017, an NGN optional purchase3 was completed and three NGN trusts were closed. The document included a breakdown of each respective AME's amounts, reflecting the $767 million expense accounting entries. The document described and clarified these activities and the new line entry and is, as you requested, a "document regarding [the NGN Maturity Related Liquidation Expenses] entry."
Your appeal also asserted that the documents withheld by the agency under exemptions 4, 5, and 8 under 5 U.S.C. § 552 should be made available because such documents relate to the "NCUA's fiduciary role in the administration of assets of failed institutions," and the fiduciary assets that are the subject of your FOIA request are "not assets of the federal government." You argued that, as fiduciary assets as opposed to government assets, the FOIA exemptions do not apply and the related documents should therefore be released. However, we find this argument self-defeating. If this assertion were true (i.e., that assets managed by the NCUA in its fiduciary capacity are not government assets), then it would follow that the related documents are not subject to the FOIA in any regard. The FOIA establishes a statutory framework for public requests for agency records and imposes requirements on agencies to make such records promptly available.4 The FOIA applies to agencies within the Executive Branch of the federal government, independent regulatory agencies, and some components within the Executive Office of the President.5 If, as you asserted, documents related to fiduciary assets are not governmental in nature (i.e., agency records), then not only would the FOIA exemptions not apply, but the FOIA itself would not apply.
We disagree with your contention that the assets of failed institutions managed by the NCUA in its fiduciary capacity renders those assets non-governmental. Assets managed by the NCUA, an independent regulatory agency, in its fiduciary capacity or otherwise, are still government assets and the agency's October 4 letter responding to your August 10 FOIA request confirms our interpretation that the subject assets are government assets and the FOIA applies to documents related to management of those assets.
Our October 4 letter explained that additional information was withheld based on exemptions 4, 5, and 8 of the FOIA. Exemption 4 protects commercial or financial information obtained from a person that is privileged or confidential.6 The term “commercial” has been broadly interpreted to include anything “pertaining or relating to or dealing with commerce.”7 Documents underlying an NGN optional purchase fit within this broad definition.
Given the nature of the transaction, to the extent information responsive to your request is in the possession of the agency, it would only be the result of having been provided voluntarily by the trustee. Under controlling case law, financial information voluntarily provided to an agency is exempt from disclosure under FOIA if it is of a type that the provider would ordinarily preserve in confidence and not make public.8 Since the information involved in this case falls into that category, there is a basis for withholding it, to the extent the information exists.
A review of our files reveals that agency personnel considered and deliberated the NGN optional purchase. Documents to deliberate the transaction include some material that is arguably responsive to your request. However, exemption 5 of the FOIA shields those deliberations from disclosure.9 Exemption 5 incorporates the privileges available to a governmental agency in civil litigation, notably the deliberative process privilege (sometimes called the executive privilege), the attorney-client privilege, and the attorney work product privilege.10
To qualify for the deliberative process privilege, an agency must show that the documents are both "pre-decisional" and "deliberative." Documents are pre-decisional when they precede an agency decision and are prepared in order to assist an agency in arriving at its decision, and documents are deliberative when they comprise part of the process by which government decisions are made.11 If a document is generated as part of such a continuing process of agency decision-making, courts have found exemption 5 can be applicable.12 The rationale underlying the privilege is to allow agencies freely to explore alternative avenues of action and to engage in internal debates without fear of public scrutiny.13 The communications among agency staff deliberating the NGN optional purchase therefore qualify for withholding.
On the other hand, post-decisional documents that explain actions that an agency has already taken, for example, are generally not exempted.14 Thus, the summary document explaining the $767 million expense accounting entries provided with the October 4 letter was both responsive and properly releasable.
Finally, as the October 4 letter correctly noted, exemption 8 of the FOIA provides for protection against release of information “contained in or related to examination, operating or condition reports prepared by, on behalf of, or for the use of an agency responsible for the regulation or supervision of financial institutions.”15 Courts have interpreted exemption 8 broadly and have declined to restrict its all-inclusive scope.16 The fact that an institution has been closed for liquidation does not, in itself, render the exemption inapplicable.17 Indeed, courts have held that even records pertaining to institutions that are no longer in operation are protected under exemption 8 to serve the public policy of promoting “frank cooperation” between institution and agency officials.18 Therefore, information relative to liquidated institutions was properly withheld under exemption 8.
Pursuant to 5 U.S.C. §552(a)(4)(B) of FOIA, you may seek judicial review of this determination by filing suit against the NCUA. Such a suit may be filed in the United States District Court where you reside, where your principal place of business is located, the District of Columbia, or where the documents are located (the Eastern District of Virginia).
The 2007 FOIA amendments created the Office of Government Information Services (OGIS) to offer mediation services to resolve disputes between FOIA requesters and Federal agencies as a non-exclusive alternative to litigation. Using OGIS services does not affect your right to pursue litigation. You may contact OGIS in any of the following ways:
Office of Government Information Services
National Archives and Records Administration
8601 Adelphi Road - OGIS
College Park, MD 20740-6001
Web: https://www.archives.gov/ogis (se abre en una ventana nueva)
Telephone: 202-741-5770; Toll-free: 877-684-6448
Michael J. McKenna
1 See, e.g. LaRoche v. SEC, 289 F App’x 231, 231 (9th Cir. 2008); American Civil Liberties Union v. DOJ, 681 F.3d 61, 71 (2nd Cir. 2012).
2 The document is also publicly available on the NCUA website.
3 The document also described three primary types of activities that occur as an NGN reaches maturity, which may create a B1 claim for the NCUSIF. One of these three types of activities is an optional purchase, in which "cash required to purchase NGN collateral is provided by NCUSIF in the month prior to final maturity and then allocated and repaid as funds become available by each respective AME." This option can "improve the efficiency of NGN wind-down transactions when asset cash flows have not fully met NGN obligations" and avoid a guarantor payment in such cases
4 See 5 U.S.C. § 552(a)(3)(A).
5 See 5 U.S.C. § 552(f)(1). Amtrak is also subject to the FOIA by statute. See 49 U.S.C. § 24301(e).
6 5 U.S.C. §552(b)(4).
7 American Airlines, Inc. v. National Mediation Board, 588 F. 2d 863, 870 (2d Cir. 1978).
8 See Critical Mass Energy Project v. NRC, 975 F. 2d 871 (D.C. Cir 1992).
9See 5 U.S.C. §552(b)(5).
11 Phillips v. Immigration and Customs Enforcement, 385 F. Supp. 2d 296 (S.D. N.Y. 2005).
12 See, e.g., ACLU of Wash. v. DOJ, No. 09-0642, 2011 WL 887731, at *5 (W.D. Wash. Mar. 10, 2011).
13 See Assembly of State of Cal. v. United States Dep't of Commerce, 968 F.2d 916, 920 (9th Cir. 1992).
14 See e.g., Nat'l Day Laborer Organizing Network v. ICE, 811 F. Supp. 2d 713, 741 (S.D.N.Y. 2011).
15 5 U.S.C. §552(b)(8).
16 See Consumers Union of United States, Inc. v. Heimann, 589 F. 2d 531 (D.C. Cir. 1978).
17See Gregory v. FDIC, 631 F. 2d 896, 899 (D.C. Cir. 1980).
18 Id.; see also Berliner, Zisser, Walter & Gallegos v. SEC, 962 F. Supp. 1348, 1353 (D. Colo. 1997).