Posted by John Elwood:
Pending OLC Opinion Request On Geithner's Power To Supervise The TARP IG:
http://volokh.com/archives/archive_2009_06_21-2009_06_27.shtml#1245930876
The Judiciary Act of 1789 authorizes the Attorney General to advise
the President and executive agencies on questions of law. The Attorney
General has delegated that responsibility to the Office of Legal
Counsel. It is unusual, but not unprecedented, for people outside the
government to learn of an OLC opinion request before advice is
provided and a decision is made whether to publish the resulting
opinion, a process that can take a year or more. But thanks to an
outspoken Inspector General (there are just enough exceptions to the
stereotype to save that phrase from utter redundancy), the public has
a ringside seat to a pending OLC opinion request by the Department of
the Treasury involving the Secretary's authority to supervise the
Special Inspector General for the Troubled Asset Relief Program
(SIGTARP), Neil Barofsky.
According to a [1]letter from Senator Grassley to Secretary Geithner
(itself apparently based on reports from a source in the SIGTARP
office) with a CC to Barofsky, Barofsky's [2]response to Senator
Grassley and Representative Darrell Issa, and a [3]memo from Barofsky
to Treasury Acting General Counsel Bernard J. Knight, Jr., that has
become public, in probably late March or early April 2009, Treasury
officials balked at providing certain documents SIGTARP had requested
based on concerns that giving them to the IG would constitute a waiver
of attorney-client privilege. The issue came to head in connection
with SIGTARP's planned interview of a Treasury official regarding
payments to AIG's Financial Products unit. As a result, on April 2,
Acting GC Knight emailed Barofsky that he sought to obtain an opinion
from OLC on three subjects:
Whether SIGTARP is within the Department of the Treasury;
Whether the Secretary of the Treasury has supervisory authority
over SIGTARP;
If SIGTARP is not part of Treasury, whether providing Treasury's
attorney-client privileged materials to SIGTARP effectively waives
the privilege.
While Knight quickly addressed Barofsky's request for the documents
(and Barofsky recently has stated that he has received all the
documents he needs from Treasury), Treasury proceeded with its opinion
request. While Barofsky turned over the email traffic involving Knight
and OLC to Senator Grassley and Representative Issa, he redacted
certain portions at OLC's "insistence" "to avoid interfering with its
ongoing consideration of the questions that have been presented to
it." (OLC's request to redact is consistent with long practice, which
is not to release information that can affect the Executive Branch's
deliberative process.)
Based on representations in SIGTARP's April 7 memo, Treasury
apparently takes the position that SIGTARP is within the Executive
Branch, but may question whether SIGTARP is actually within Treasury.
In its April 7 memo, SIGTARP argued that the office is an independent
entity within Treasury that is not subject to supervision by the
Secretary of the Treasury; that privileges do not excuse compliance
with an IG's request for materials; and that response to an IG's
request is not voluntary and thus is not a waiver.
SIGTARP was created by section 121 of [4]the Emergency Economic
Stabilization Act of 2008 (EESA), as amended by [5]Pub. L. 111-15,
enacted earlier this year. Before broadband, you were asking for
trouble to run an allfeds Westlaw search of "act" or "law" w/5 "not a
model of clarity," and that already bloated search result will only
grow as EESA works its way through the courts. Section 121 of the EESA
does not explicitly state what Department the SIGTARP is in, or, for
that matter, whether it is even in the Executive Branch.
It seems likely that if OLC writes an opinion (more on that later), it
will conclude that SIGTARP is within Treasury and thus within the
Executive Branch. SIGTARP performs the traditional functions of an IG,
and section 101 of EESA vests Treasury with the job of administering
TARP; thus, absent a statement to the contrary, one would expect
SIGTARP to be created within the agency it monitors following the
usual model of the IG Act. (The opposite argument, of course, is that
an inference should be drawn from the fact that Congress omitted from
EESA the usual language creating the IG Office within a particular
"establishment" of the Executive Branch.) There is other evidence
SIGTARP is within Treasury, although you have to cull bits and pieces
from EESA, none of it particularly compelling in isolation: Treasury's
budget is the source of SIGTARP's funding; the EESA incorporates the
removal provisions of the IG Act of 1978, which speaks of transferring
the IG to "another position within an establishment," suggesting the
IG position is within the establishment; by incorporating provisions
of the original IG Act of 1978, EESA requires the SIGTARP to keep the
Treasury (as well as Congress) informed about its findings; the
SIGTARP has offices at Treasury (and the original IG Act specifies
that the head of an establishment is to provide the IG office space).
SIGTARP and Treasury have been operating on the understanding that the
office is part of Treasury, and there is precedent that agency
practice is relevant in construing an ambiguous statute, but that
consideration would be given less weight given that EESA is not even a
year old and practice therefore is not longstanding.
The conclusion that SIGTARP is part of the Executive Branch (and,
indeed, is part of Treasury) would ordinarily answer for OLC the
question that appears to have precipitated the opinion request:
whether turning over documents will result in a waiver of
attorney-client privilege. The questions, as framed in the April 7
memo, implicitly recognize that conclusion. Both the attorneys and the
SIGTARP ultimately are agents of the same client, and so provision of
the documents would not result in a waiver of the privilege.
The hardest question is whether SIGTARP is subject to supervision by
the Secretary of the Treasury. Congress was not terribly clear in
incorporating elements from the [6]IG Act of 1978. Congress
incorporated some provisions by specific reference or by duplicating
the language of the original IG Act (e.g., the removal provisions of
IG Act section 3(b); rates of pay; application of a particular Hatch
Act exception for policymakers; powers and authorities; compliance
with Comptroller General audit procedures). So far so good. EESA does
not, however, explicitly incorporate the most relevant provision of
the original IG Act, section 3(a), which states in relevant part that
"[e]ach Inspector General shall report to and be under the general
supervision of the head of the establishment involved or, to the
extent such authority is delegated, the officer next in rank below
such head, but shall not report to, or be subject to supervision by,
any other officer of such establishment."
While the EESA does state that "the Inspector General shall also have
the duties and responsibilities of inspectors general under the
Inspector General Act of 1978," it is not self-evident that the IG
Act's provision for (and limitations on) secretarial supervision
establishes a "duty or responsibility" of inspectors general. Although
SIGTARP seems to be quite adamant that that sentence of 3(a) does not
apply to the office, if it does not, presumably, neither would the
last sentence of the provision: "Neither the head of the establishment
nor the officer next in rank below such head shall prevent or prohibit
the Inspector General from initiating, carrying out, or completing any
audit or investigation, or from issuing any subpena during the course
of any audit or investigation." I am aware of no comparable
noninterference provision in EESA, but it is a big statute.
Although there are question marks over the applicability of the IG
Act's supervision provisions, it strikes me as unlikely that OLC would
conclude that the SIGTARP is completely "independent" of secretarial
supervision. The ordinary presumption is that an agency head
supervises those in the agency, and there are various provisions of
law that embody that background presumption. The explicit provisions
of section 3(a) of the IG Act were designed to define the limits of
supervision within an agency. While SIGTARP notes that the EESA does
not make explicit provision for "supervision," its text is similarly
silent about "independence." In the Executive Branch, it seems likely
that such silence will be construed in favor of supervision rather
than a lack of supervision; if Congress wants to exempt an official
from supervision by the head of an agency, it is easy enough, given
the separation of powers implications of interfering with another
branch's traditional supervision structure, for it to say so
explicitly. I understand that there is some legislative history from
Senator Baucus indicating that he intended for the office to be "truly
independent," and that is something OLC will have to consider. (There
may be more, but I haven't been able to exhaustively search the
legislative history.) I don't imagine that OLC will give the statement
tremendous weight, because individual floor statements rank relatively
low in terms of persuasiveness for legislative history, which is
itself disfavored in an age when plain language is ascendant.
The actual phrasing of the Treasury request is critical, because if it
is quite general (as in the SIGTARP letter: "Whether the Secretary of
the Treasury has supervisory authority over SIGTARP"), OLC may not be
forced to confront far thornier specific applications of that
supervisory authority, such as whether agency head may, for example,
order SIGTARP to redact privileged communications from the version of
the report that is finalized and delivered to Congress. If Treasury
was (as Sen. Grassley's letter suggests) concerned about waiver of
attorney-client privilege, it may not be particularly enthusiastic
about such communications winding up in the final report.
The thorny and politically explosive issue of IG supervision will give
both Treasury and DOJ an incentive to try to resolve the matter short
of a formal opinion. So if the parties have reached an accommodation
that allows Barofsky to move forward with his immediate duties (as
Barofsky's letter suggests), I would not be surprised if a decision is
made not to finalize an OLC opinion on the subjects outlined above.
References
1. %E2http://finance.senate.gov/press/Gpress/2009/prg061809b.pdf%E2
2.
%E2http://www.washingtonpost.com/wp-srv/politics/documents/Letter_to_Congressman_Issa_and_Senator_Grassley.pdf%E2
3.
%E2http://a.abcnews.go.com/images/Politics/SIGTARP_position_within_Treasury.pdf%E2
4.
%E2http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=110_cong_public_laws&docid=f:publ343.110.pdf%E2
5.
%E2http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_public_laws&docid=f:publ015.111.pdf%E2
6. %E2http://www.ignet.gov/pande/leg/igactasof0609.pdf%E2
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