Today, Senators Patrick Leahy (D-VT), Charles Grassley (R-IA), John Cornyn (R-TX), and Ted Kaufman (D-DE) introduced a bipartisan bill to strike a troubling provision in the newly enacted financial reform legislation that would allow the Securities and Exchange Commission (SEC) to unnecessarily withhold records from the public. The Project On Government Oversight (POGO) strongly supports this bill, which will eliminate the exemptions to the Freedom of Information Act (FOIA) created in Section 929I of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
"As the SEC gains new powers to regulate Wall Street, the public has a right to know whether the agency is taking the necessary steps to avoid another financial crisis," said POGO Executive Director Danielle Brian. "This bill will ensure that the public can access the records it needs to hold the agency accountable."
The bill introduced today strikes exemptions that give the SEC a blanket authority to withhold records on the companies it regulates, and could severely limit the public's ability to obtain information on the SEC's oversight activities. The exemptions are also unnecessary, since FOIA already protects against the release of sensitive financial information. The bill clarifies that an existing FOIA exemption will protect against the release of confidential information contained in the records of hedge funds and other firms that will now be regulated by the SEC under the Dodd-Frank Act, eliminating the need for any new blanket exemptions.
Earlier this week, a broad coalition of groups including POGO wrote to Senator Christopher Dodd (D-CT) and Representative Barney Frank (D-MA) calling on them to repeal the unnecessary FOIA exemptions, and to examine the SEC's overall record on withholding information from the public.
Senator Leahy has fought for greater transparency throughout the Dodd-Frank bill, including his efforts to remove a poison pill secrecy measure on information provided to the SEC by whistleblowers. Senators Leahy, Cornyn, and Grassley have each received awards from POGO for their long-standing commitment to good government reforms.