Tags: Obama | Solicitor | General | Told | Fed | Drop | Appeal

Obama’s Solicitor General Told Fed to Drop Appeal to Keep Bailouts Secret, Banks Say

Wednesday, 27 October 2010 02:41 PM EDT

The Obama Administration’s top courtroom lawyer directed the Federal Reserve to drop its plan to ask the Supreme Court to block the release of bank bailout records, according to a legal brief filed by a group of the biggest commercial banks.

The Fed did not join the Clearing House Association LLC, a group of 20 banks, which appealed to the high court yesterday. The banks hope to reverse a lower court ruling forcing disclosure of Fed lending programs. Bloomberg LP, the parent of Bloomberg News, sued the central bank for the information.

In papers filed with a federal appeals court in New York, the Clearing House said the Fed had initially sought approval from acting Solicitor General Neal Katyal to petition the Supreme Court.

“The Clearing House was informed on October 22, 2010 -- two business days ago -- that the solicitor general declined to authorize” the appeal, the banks’ group said in the court papers. Katyal declined to comment.

The revelation came in an emergency request by the Clearing House to intervene in a similar case involving News Corp.’s Fox News.

Bloomberg sued the Fed in 2008 after the central bank refused to disclose names of recipients of emergency loans from four programs in response to a request under the Freedom of Information Act, or FOIA. The Clearing House joined the Fed’s defense of the suit after a U.S. District Court judge ruled in Bloomberg’s favor in August 2009. In March, an appeals panel upheld the lower court.

Essential Programs

The Fed’s emergency programs, which were “essential responses to the recent financial crisis,” would be harmed if the central bank is forced to disclose lending records, the Clearing House said in a statement yesterday. “Unless the ruling is overturned by the U.S. Supreme Court, businesses and individuals may decline to participate in these programs, possibly impairing the federal government’s ability to act effectively in times of crisis.”

The New York-based Clearing House, which has processed payments among banks since 1853, includes Bank of America NA, Bank of New York Mellon, Citibank NA, Deutsche Bank Trust Co. Americas, HSBC Bank USA NA, JPMorgan Chase Bank NA, U.S. Bank NA and Wells Fargo Bank NA.

Fox News submitted a FOIA request after Bloomberg’s, seeking information on more lending programs over a longer time frame. Because Fox lost an initial judgment in U.S. District Court, the Clearing House did not intervene in that case, said Greg Berardi, a spokesman for the bank group.

Solicitor General

An appellate court remanded Fox’s case earlier this year. Now that the Fed is no longer appealing Bloomberg’s case, the bank group is trying to intervene in the Fox matter “to make sure its appeal to the Supreme Court is not mooted by the release of the same information to Fox,” Berardi said.

Katyal took over for Elena Kagan after President Barack Obama selected her to serve on the Supreme Court. Like most federal agencies, the Fed must get approval from the solicitor general before filing an appeal at the Supreme Court.

“The court gets about 8,000 petitions and takes only about 75 cases a year,” said Gregory G. Garre, a former solicitor general and now a Washington-based partner at Latham & Watkins LLP. “If the solicitor general is seeking review, the odds the court will agree to take the case go way up. The court takes the large majority of the cases in which the government seeks review.”

Jennifer R. Psaki, a White House spokeswoman, and David Skidmore, a spokesman for the Fed, declined to comment.

The high court is already considering another dispute over corporate privacy rights under FOIA. In that case, which centers on a separate FOIA provision, the solicitor general is urging the release of documents concerning AT&T Inc., the largest U.S. phone company.

© Copyright 2024 Bloomberg News. All rights reserved.


FinanceNews
The Obama Administration s top courtroom lawyer directed the Federal Reserve to drop its plan to ask the Supreme Court to block the release of bank bailout records, according to a legal brief filed by a group of the biggest commercial banks.The Fed did not join the Clearing...
Obama,Solicitor,General,Told,Fed,Drop,Appeal,Keep,Bailouts,Secret
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2010-41-27
Wednesday, 27 October 2010 02:41 PM
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