Judge Sweeney Confirms Government Not Allowed To Use Privilege Claims As Fifth Amendment

Judge Sweeney’s order making the documents public has been released, and the enormity of its importance on all aspects of our legal battle is massive:


“Moreover, in its re-examination of the documents attached to Perry Capital appellants’ motion, the court notes that the contents of these documents refer to, among other things, events— including decisions and forecasts—that occurred more than three years ago. For that reason, the court finds that sufficient time has passed to alleviate its initial concerns that disclosure of certain information to the public had the potential to adversely influence United States financial markets. With the passage of time, the court’s initial concern regarding a negative impact on the Nation’s financial markets or financial institutions has dissipated.
At issue here are excerpts from three deposition transcripts, as well as excerpts from four documents that are more than three years old. As a result, the government’s continued reliance on the May 29, 2014 declaration of Federal Housing Finance Agency(“FHFA”) Director Melvin L. Watt no longer retains the same potency that it did when originally supplied to the court in support of the entry of a protective order. Nevertheless, the government reiterates its original arguments when it asserts that “the futures of Fannie Mae and Freddie Mac are still uncertain and subject of vigorous debate,” Def.’s Opp. 5, once again relying on the Declarations of Melvin L. Watt and Michael A. Stegman, the Director of the FHFA and Former Counselor to the Treasury Secretary for Housing Finance Policy at the United States Department of the Treasury, respectively. While the court recognizes that protection of the Nations financial markets and fledgling financial institutions were legitimate goals when the court first entered its order, with the passage of time, the potential for harm to the Nation’s markets and then-fledgling financial institutions no longer exists. Instead of harm to the Nation resulting from disclosure, the only “harm” presented is the potential for criticism of an agency, institution, and the decision-makers of those entities. The court will not condone the misuse of a protective order as a shield to insulate public officials from criticism in the way they execute their public duties. Thus, avoidance of “second-guessing” an agency’s decisions several years after the fact, as described by Mr. Watt, is, with the passage of time no longer a legitimate basis to maintain documents under a protective order. The court notes that from the inception of this litigation, the government has consistently maintained that the court lacks jurisdiction over this case because the United States had no control over the enterprises. Taking the government at its word, it is surprising that defendant is concerned with the unsealing of government officials’ deposition testimony.

Moreover, there can be no serious dispute that it is extremely rare for a document filed under seal in a civil case to remain so for all time. There is no suggestion that the documents subject to the protective order are classified as relating to national security. Nor do these documents contain trade secrets or proprietary information. However, even cases in which trade secrets and proprietary information are filed under seal and subject to a protective order, it is not unusual that after the passage of time, that same information is eventually unsealed because the protective order has outlived its usefulness. Indeed, because the government does not argue that information that it requests remain protected concerns matters involving national security, trade secrets, or proprietary information, or that specific privileges attach to any of the seven documents, it is clear that there is no longer a need to maintain the protected designation for them.”

Judge Sweeney makes it more than clear that she is not buying our government’s absurd logic for keeping their secrets concerning the illegal seizure of Fannie and Freddie hid away. Although earlier on she showed skepticism toward their arguments many feared over the last several months that she was beginning to lose her resolve to stand up to the government, we now know that those fears were unfounded. In a tersely worded order, she made it more than clear that she will not allow the government to improperly use privilege claims to hide their misdeeds. The implications of Sweeney’s order and release are game changing for our legal status, and I am sure are reverberating within the political channels as well.  Also, as we pore through the released depositions and documents, there is now substantial evidence proving that Treasury was calling the shots, and FHFA was an agent and arm of Treasury. I expect to see her demand that the Administration turn over the documents that they have been withholding under privilege claims in her upcoming order on the motion to compel. We know based on everything we have gathered to this point that there are severely incriminating documents and communications leading directly to the White House.

Mulvaney Bill Is Out

The long awaited Mulvaney Bill is out calling for the GSEs to be able to retain capital. We will have more on this as it become available.

Much More To Come
The events over the last few days have been enormous, and we will be updating this post throughout the day to offer further commentary and news as we are able. I cannot over-emphasize the significance of the recent events that at this moment are continuing to unfold. We will be outlining in detail the damage this release has done to the government’s claim that the FHFA was independent of Treasury and also bringing everyone up to speed on the Perry Appeal where we will have representatives live Friday for the oral arguments.


Keep the Faith!