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CONFIDENTIAL - NOT FOR PUBLIC DISTRIBUTION
Agenda for Financial Crisis Inquiry Commission Telephonic “Concluding” Meeting
Wednesday, February 9, 2011
4:30-5:15pm ET
Conference Dial-In Number: 866-692-3582
Participant Access Code: 3387529
Email voting is also permitted
Agenda Item
Presentation
1) Call to Order
Chairman Angelides
2) Roll Call
Chairman Angelides
3) Approval of Minutes of Meeting
of January 24, 2011 (Attached)*
Chairman Angelides
4) Approval of Minutes of Meeting
of January 29, 2011 (Attached)*
Chairman Angelides
5) Executive Directors Report
Wendy Edelberg, Executive Director
6) Extension of Delegation of Authority
(Attached)*
Chairman Angelides and
Wendy Edelberg, Executive Director
7) Discussion and Vote on Referral to Justice - 1
(Attached)*
Deputy General Counsel Cassidy Waskowicz
8) Discussion and Vote on Referrals to Justice - 2
(Attached)*
Deputy General Counsel Cassidy Waskowicz
9) Comments and Questions
from Commissioners
All Commissioners
10) Other Items of Business
All Commissioners
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11) Adjournment
Chairman Angelides
*See attached resolutions below
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Resolutions for adoption at the Commission business meeting of
Wednesday, February 9, 2011.
These Resolutions may be adopted by a vote cast at the meeting, or by e-mail voting transmitted to
Cassidy Waskowicz, cwaskowicz@fcic.gov, Deputy General Counsel, to be received by her on or before
5:15pm EST on February 10, 2011, in accordance with the e-mail voting procedures approved at the
Commission meeting at January 24, 2001.
To vote by e-mail, respond to Ms. Cassidy Waskowicz, cwaskowicz@fcic.gov, and indicate in your
response whether you are voting in favor or against, or not voting with respect to all resolutions, in which
case merely indicate
“I vote in favor of all" or
"I vote against all" or
“I abstain with respect to all”
or indicate one by one how you vote on each resolution individually should you wish to cast different
votes on different resolutions.
************************************************************************
Resolution 1:
Resolved, that the Minutes of the Commission Meeting of January 24, 2011, as provided to the
Commissioners prior to this meeting, are hereby approved.
Resolution 2:
Resolved, that the Minutes of the Commission Meeting of January 29, 2011, as provided to the
Commissioners prior to this meeting, are hereby approved.
Resolution 3:
Resolved, it is hereby delegated to the Chairman of the Commission the authority to approve final
agreements and payments for Commission obligations and agreements on behalf of the Financial Crisis
Inquiry Commission in order to complete the work of the Commission and provide a process for the approval
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of outstanding obligations and invoices submitted after February 13, 2011. This delegation is effective until
the earlier of three years from February 13, 2011, and when remaining Commission funds are returned to the
U.S. Treasury, and
Resolved further, The Chairman may delegate all over or any portion of this authority to Executive
Director Wendy Edelberg in order to expedite the orderly termination of the Commission and approval of
invoices submitted after February 13, 2011, and
Resolved further, that this delegation in no way supersedes the prior delegation of authority to the
Chairman to execute agreements and contracts on behalf of the Financial Crisis Inquiry Commission which
delegation is in effect through February 13, 2011.
Resolution 4:
Whereas, the Commission is instructed to refer to the Attorney General of the United States and any
appropriate State attorney general any person that the Commission finds may have violated the laws of the
United States in relation to [the financial] crisis, and
Whereas, there has been presented to the Commissioners a memorandum concerning possible violations
of the laws of the United States regarding the allegations made by Richard Bowen, and
Whereas, the Commission finds that laws of the United States may have been violated with respect to
such matters,
Now, Therefore, Be It Resolved that the Chairman is authorized on behalf of the Commission to forward
the memorandum and accompanying exhibits to the Attorney General of the United States for further
investigation and possible action.
Resolution 5:
Whereas, the Commission is instructed to refer to the Attorney General of the United States and any
appropriate State attorney general any person that the Commission finds may have violated the laws of the
United States in relation to [the financial crisis], and
Whereas, there has been presented to the Commissioners a memorandum concerning possible violations
of the laws of the United States regarding 36CFR1256.56: Privacy
and
Whereas, the Commission finds that laws of the United States may have been violated with respect to
such matters,
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Now, Therefore, Be It Resolved that the Chairman is authorized on behalf of the Commission to forward
the memorandum and accompanying exhibits to the Attorney General of the United States for further
investigation and possible action.
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Financial Crisis Inquiry Commission
Agenda Item 3 for FCIC Business Meeting of February 9, 2011
Minutes of FCIC Meeting of
January 24, 2011
Agenda Item 1: Call to Order
Chairman Angelides called the meeting to order at 4:03pm ET.
Agenda Item 2: Roll Call
Chairman Angelides asked Gretchen Newsom to call the roll of the Commissioners. Present were Phil
Angelides, Brooksley Born, Byron Georgiou, Doug Holtz-Eakin, Heather Murren, John W. Thompson, and
Peter Wallison. Vice Chairman Bill Thomas joined the meeting during Agenda Item 6 and Commissioner
Keith Hennessey joined the meeting during Agenda Item 4.
Also participating in the meeting were: Wendy Edelberg, Executive Director; Gary Cohen, General Counsel;
Cassidy Waskowicz, Deputy General Counsel; Gretchen Newsom, assistant to Chairman Angelides; Scott
Ganz, assistant to Vice Chairman Thomas; Courtney Mayo, assistant to the Vice Chairman Thomas; and Rob
Bachmann, assistant to Chairman Angelides. Communications Director Tucker Warren joined the meeting
for discussion of Agenda Item 7.
Agenda Item 3: Approval of Minutes of Business Meeting on January 6, 2011
Chairman Angelides introduced the minutes from the FCIC business meeting of January 6, 2011 and asked if
there were any questions or comments.
MOTION:
Graham moved and Wallison seconded a motion to adopt the meeting minutes of
January 6, 2011 (See Attachment 1).
APPROVED: 8-0 (Vice Chairman Thomas and Commissioner Hennessey were absent)
Agenda Item 4: Chairman’s and Vice Chairman’s Report
Chairman Angelides informed the Commission that the Report would be released with accompanying
dissents on January 27th. He also informed the Commission that an event is being planned for the
presentation of the Report and its conclusions with the six Commissioners that approved the Report
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participating at the event. Chairman Angelides indicated that assistance would be available to any
Commissioner whom dissented from the Report that would like assistance in the presentation of their
dissents, and that all media inquiries asking for the views of dissenters would be addressed, routed
appropriately, and handled professionally. Chairman Angelides informed the Commission that the
Government Printing Office would be delivering copies of the Report to Congress and the President on the
morning of the Report’s release.
The Chairman noted that the Vice Chairman sent a letter to the Chairman wherein he raised questions
regarding the Report release event and the Chairman addressed these concerns during his report to the
Commission. Chairman Angelides noted that the Commission retained the services of SKDKnickerbocker to
assist with press and communications related to the release of the Report, and that this was done to addresses
workload concerns within the Communications unit. The firm was recommended to the Chairman and he
informed Wendy Edelberg of the recommendation and she was satisfied with the capabilities of the firm.
The cost of the services provided to the Commission by SKDKnickerbocker are approximately $15,000 – the
Chairman noted that costs incurred for similar services from Edelman by the Iraq Study Group and the 9/11
Commission were much higher. Services provided to the Commission by SKDKnickerbocker are under the
direction of Commission staff.
Wendy Edelberg addressed the Vice Chairman’s set of questions with regard to the status of the Commission
budget. She informed the Commission that staff are working to close and settle all vendor accounts.
Remaining unspent and unallocated funds are currently estimated at approximately $125,000. Additional
major costs expected to be incurred that have not been budgeted include moving expenses for the relocation
of Commission property to GSA as well as staff bonuses, which she plans on awarding in consultation with
the Chairman and Vice Chairman. Unspent Commission funds would be held by GSA for a period of three
years for payment of invoices not yet received at the time the Commission sunsets and then would be
returned to Treasury. Chairman Angelides noted that we should hold some funds for Commissioner travel
post Commission sunset for if and when Commissioners are called to testify at Congressional hearings.
Chairman Angelides asked if any Commissioners had any questions or concerns about the information laid
out in his report. No concerns or questions were raised.
Chairman Angelides informed the Commission that a “thank you” party would be held for staff on the
evening of January 27th. He welcomed Commissioners to join him and others in hosting the party for the
staff.
Agenda Item 5: Executive Director’s Report
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Executive Director Wendy Edelberg did not have a report.
Agenda Item 6: Vote to Approve the Clearance of Documents
Gary Cohen presented his memo titled “Further Considerations with Respect to the Public Release of
Confidential Documents and Materials in the Report, the E-Book and Website.” Scott Ganz raised concerns
on behalf of the Vice Chairman with respect to the posting of documents that have been objected to and/or
wherein interview participants were under the impression that the interview was confidential as well as those
persons whom do not have legal counsel in discussions with Commission staff. Discussion of this matter
ensued amongst Commissioners. The Chairman recommended prudence in the clearance of documents
balanced with public interest for disclosure. The Vice Chairman recommended that staff consult with him
and the Chairman and seek their guidance if needed to formulate a determination.
MOTION:
Thompson moved and Holtz-Eakin seconded a motion to adopt the resolution outlined
in Mr. Cohen’s memo with the addition of a clause wherein staff would consult with
the Chairman and Vice Chairman if guidance was deemed to be needed. (See
Attachment 2).
APPROVED: 10-0
Agenda Item 7: Vote to Approve New FCIC Website
Gary Cohen and Tucker Warren presented two versions of the new FCIC website, one offered for
consideration by the Chairman (Beta Site 1) and one offered for consideration by the Vice Chairman (Beta
Site 2) (see attached). Discussion of the two proposals ensued amongst Commissioners. Wendy Edelberg
informed the Commission that she and senior staff would post to the FCIC website the timeline and
additional cleared documents.
MOTION:
Born moved and Murren seconded a motion to adopt and approve Beta Site 1 as the
new FCIC website. (See Attachment 3).
SUB-MOTION:
Vice Chairman Thomas moved and Holtz-Eakin seconded a substitute motion
to substitute Beta Site 2 for Beta Site 1. See Attachment 4).
FAILED:
4-6
AYE: 4- Thomas, Hennessey, Holtz-Eakin, Wallison
NAY: 6 – Angelides, Born; Georgiou, Graham, Murren, Thompson,
Vice Chairman Thomas recommended a white paper vote on the original motion. Chairman
Angelides asked if there were any objections raised from Commissioners in adopting Beta Site 1 by a white
paper vote. No objections were raised and Beta Site 1 was adopted .
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Agenda Item 8: Discussion and Possible Action on Archives
Gary Cohen presented his archives memo to the Commission and reviewed potential variances of archives
protocol for adoption (See Attachment 5). Discussion ensued among Commissioners on this topic and there
was a general consensus that the 9/11 Commission archives protocol (i.e. the release of documents after 5
years) was preferable.
MOTION:
Graham moved and Born seconded a motion to delegate to the Executive Director, the
General Counsel and Deputy General Counsel the power to prepare and submit to the
National Archives and Records Administration on behalf of the Commission a
document transfer policy that provides, except where the Commission has bound itself
to a longer period, a release schedule for all federal records delivered to the National
Archives of five years from the date the Commission terminates on February 13, 2011;
and that the Commission requests that the transfer to the National Archives include a
provision authorizing immediate access (but not the right to publicly release) to
archive materials to all of the Commissioners, Peter Kadzik, Esq., Gretchen Newsom,
Scott Ganz, Wendy Edelberg, Gary Cohen, Greg Feldberg, Chris Seefer, Maryann
Haggerty and Cassidy Waskowicz
APPROVED: 10-0
Agenda Item 9: Additional voting procedures for remaining Commission actions
Chairman Angelides informed the Commission that he asked Gary Cohen to draft a set of additional voting
procedures to allow for more flexibility in voting upon final Commission business matters. Mr. Cohen
presented the revised voting procedures.
MOTION:
Murren moved and Holtz-Eakin seconded a motion to adopt the revised voting
procedures as outlined by Gary Cohen (see Attachment 6).
APPROVED: 10-0
Agenda Item 10: Comments and Questions from Commissioners
No comments were brought up or questions asked by the Commissioners.
Agenda Item 11: Other Items of Business
Chairman Angelides asked if Commissioner Hennessey would like to have a verbal re-cap of the Chairman’s
response the Vice Chairman’s letter. Commissioner Hennessey declined.
Agenda Item 12: Adjournment
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MOTION:
Thompson moved and Holtz-Eakin seconded a motion to adjourn the meeting at
approximately 5:37pm.
APPROVED: 10-0
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Financial Crisis Inquiry Commission
Agenda Item 3 for FCIC Business Meeting of February 9, 2011
Minutes of FCIC Meeting of
January 24, 2011
ATTACHMENT 1
APPROVED Minutes of FCIC Meeting of
January 6, 2011
Agenda Item 1: Call to Order
Chairman Angelides called the meeting to order at 10:05am ET.
Agenda Item 2: Roll Call
Chairman Angelides asked Gretchen Newsom to call the roll of the Commissioners. Present were Phil
Angelides, Bill Thomas, Brooksley Born, Byron Georgiou, Keith Hennessey, Doug Holtz-Eakin, Heather
Murren, and John W. Thompson. Commissioner Bob Graham joined the meeting during Agenda Item 4.
Commissioner Wallison was absent.
Also participating in the meeting were: Wendy Edelberg, Executive Director; Gary Cohen, General Counsel;
Cassidy Waskowicz, Deputy General Counsel; Gretchen Newsom, assistant to Chairman Angelides; Scott
Ganz, assistant to Vice Chairman Thomas; Courtney Mayo, assistant to the Vice Chair; and Rob Bachmann,
assistant to Chairman Angelides.
Agenda Item 3: Approval of Minutes of Business Meeting on December 23, 2010
Chairman Angelides introduced the minutes from the FCIC business meeting of December 23, 2010.
MOTION:
Georgiou moved and Holtz-Eakin seconded a motion to adopt the meeting minutes of
December 23, 2010 (See Attachment 1).
APPROVED: 8-0 (Commissioners Graham and Wallison absent)
Agenda Item 4: Chairman and Vice Chairman’s Report
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Chairman Angelides informed the Commission that the estimate for the publication and release of the report
was January 26th, but a firm date would be announced shortly. Vice Chairman Thomas requested that Scott
Ganz be notified of further edits to the report post commission approval, with primary focus on the report
glossary. Vice Chairman Thomas raised concerns about the length of the book with respect to the number of
pages allocated to the dissents as well as the timing of the submittal of the dissents. Chairman Angelides
informed the Commission that subsequent business meetings would need to occur to wrap up Commission
business beyond the approval of the report.
Agenda Item 5: Executive Director’s Report
Executive Director Wendy Edelberg did not have a report.
Agenda Item 6: Vote to Approve the Resolution to Reapprove the Report
Chairman Angelides introduced the resolution Mr. Cohen drafted regarding the re-approval of the Report and
welcomed discussion. Mr. Cohen reminded the Commission of the 5:00pm deadline for the submittal of
dissents after the re-approval of the Report and reminded the Commission that the Report and the documents
referenced in the Report remain confidential until the public release of the Report.
MOTION:
Born moved and Thompson seconded a motion to adopt the revised Resolution to ReApprove the Report (see Attachment 2):
APPROVED: 6-4
AYE: 6- Angelides, Born; Georgiou, Graham, Murren, Thompson,
NAY: 4 – Thomas, Hennessey, Holtz-Eakin, Wallison*
(Commissioner Wallison voted nay on the re-approval of the report via email)
Agenda Item 7: Comments and Questions from Commissioners
No comments were brought up or questions asked by the Commissioners.
Agenda Item 8: Other Items of Business
Chairman Angelides informed the Commission that the next business meeting would occur in approximately
10 days to finalize the website and wrap-up other business matters.
Agenda Item 9: Adjournment of Business Meeting
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MOTION:
Georgiou moved and Graham seconded a motion to adjourn the meeting at
approximately 11:09am.
APPROVED: 9-0 (Commissioner Wallison absent)
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Financial Crisis Inquiry Commission
Minutes of FCIC Meeting of
January 24, 2011
ATTACHMENT 2
Background Materials and APPROVED Vote to Approve the Clearance of Documents/Document and
Interview Review/Clearance Process
Memo To:
Commissioners of the FCIC
From:
Gary J. Cohen
Cassidy Waskowicz
cc:
Wendy Edelberg
Maryann Haggerty
Date:
January 21, 2011
Re:
Further Considerations with Respect to the Public Release of Confidential Documents
and Materials in the Report, the E-Book and Website.
On November 16, 2010, we prepared a memorandum for the Commissioners’ consideration entitled
Considerations with Respect to the Public Release of Confidential Documents and Materials in the Report, the E-Book
and Website. A copy of that memorandum is attached. This memorandum is further to, and consistent with, that
document, and provides the current status of the staff’s document clearing process.
On December 23, 2010, at a Commission business meeting, the Commission approved a delegation of
authority to the Executive Director and General Counsel to approve and clear documents used in the Commission's
Report. With that authority, all documents1 referred to in the Report and the dissents have been cleared for use therein
(clearance was confirmed by the Commissioners at their meeting of January 6, 2011), and on the date the Report is
released the Commission's website will be populated by substantially all of the written documents referred to in the
Report.
1
As used in this memorandum documents are broadly construed to include paper documents, electronic documents, audio files, video files, compilations of data
and the like, unless the context clearly indicates otherwise.
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This Memorandum considers and recommends for approval a process for the clearance of documents which
are associated with the Report or dissents for posting on the web and potential use in the Commission's e-book or
enhanced e-pub.
It is the intention of the staff to post on the Commission's website after the Report is released as many of the
more significant documents reviewed by the Commission during its more than year-long investigation as are
appropriate for release and can be processed prior to the termination of the Commission on February 13, 2011.
To this end, the staff proposes the following procedures for clearing and posting the following categories of
documents on the website and for possible use in an e-book or enhanced e-pub. (This list overlaps with some of the
categories approved at the January 6th meeting. This Memorandum is only intended to cover documents that have not
been previously approved for release and posting):
a) all documents, both physical and electronic, e-mails, video files, audio files, transcripts, and materials prepared
or compiled by the FCIC staff, that have already been made public but not approved for posting,
b) documents that previously have been cleared in connection with prior hearings (whether or not used at the
hearings),
c) all preliminary staff reports and similar reports,
d) the timeline and documents referenced in the timeline (Commissioners will be provided with a copy of the
timeline and will be given an opportunity to convey comments to the Executive Director),
e) all video and testimony from the Commission hearings,
f) the roundtable panel discussions hosted by the Commission on November 16, 2009 and October 20, 2009,
so long as no objection is raised by roundtable participants,
g) all MFRs (note that we will not post MFRs where a transcript or audio tape exists), audio tapes and
transcripts of interviews for which confidentiality was not requested or to which no objection has been
raised,
h) all of the documents referenced in PIRs and similar staff documents,
i) all of the documents and follow-up answers to questions asked at public hearings,
j) all MFRs, audio tapes and transcripts of interviews to which objections have been raised after the
objections are resolved or overruled,
k) all survey presentations and underlying survey data upon which conclusions referenced in the Report were
based (Commissioners will be provided with a copy of the survey presentations including the Hedge Fund
Survey, Market Risk Survey, CMLTI 2006-NC2 analysis, and the CDO Library and Chartbooks, and will
be given an opportunity to convey comments to the Executive Director) , and
l) other materials relevant to our inquiry and the Report which were requested, received and reviewed or
prepared by the staff during the course of our investigation and which are not otherwise included in any of
the above categories.
However, it is our recommendation that no confidential documents be released to the website unless:
a) they are or have been reviewed by appropriate Commission staff and approved by the Executive Director,
General Counsel or Deputy General Counsel as appropriate to release
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b) when dealing with documents covered by confidentiality agreements or understandings, after consultation with
(and if required, occasional approval by) the document providers, and
c) they are approved or deemed approved by the Commission in accordance with the procedures adopted and to
be adopted at the Commission meetings of January 6 and 24, 2011.
Any documents constituting federal records not posted on the web on or before February 13, 2011, will be
delivered to the national archives for processing in accordance with a separate memorandum and the decision of the
Commission.
Following the above process will likely result in posting a substantial number of documents (including audio
files, MFR's, answers to requests for information and data submissions) to which objections have been raised by the
document providers. The general categories of objections to posting MFRs, transcripts and audio files, and documents
include the following:
i)
General nonspecific allegations that the material includes business confidential information, the release of
which would prove harmful.
ii) General statements that the interviewees were promised that the interviews would be maintained as
confidential, or were for background purposes only.
iii) Requests that the interviews not be released because they were of lower level staff employees.
iv) Requests by various bank regulatory agencies such as the Fed, the OTS or OCC, the FDIC or the SEC that
bank examination material not be released due to the chilling effect that such release would have on banks’
willingness to be candid in future examinations.
v) Requests for redactions of specific items in certain documents, such as personal information.
vi) Requests that MFRs not be released due to possible material inaccuracies alluded to by counsel to the
interviewees.
vii) Requests that an MFR not be released due to the lack of understanding by the interviewee and counsel that the
interviews would be publically released other than through the archive process (generally contemplated to be
at least five years in the future).
The staff was and will be responsive to specific redaction requests for personal information and trade secret
information the disclosure of which could be materially harmful to the provider, and to well-founded objections based
on inaccuracies in MFRs (for which no transcript or audio file exists). In addition, where it appears that the
interviewee was specifically told that the interview was for background purposes only, or would be maintained as
confidential for a given period of time, or was given specific assurances of confidentiality (as opposed to merely
having the interview covered by a standard confidentiality agreement), the interviews, whether MFR or tape or
transcript, will generally not be released.
Bank regulatory agencies have generally requested that bank examination reports not be released. But what
these examinations revealed comprises a significant portion of the Commission’s Report, and staff believes that
disclosing these materials is merited. In addition, the bank examinations occurred generally more than three years ago
and so agency claims of possible damage to a bank in 2011, caused by release of examination material from 2008 or
earlier, are not credible.
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In the earliest stages of the Commission’s operations staff was not aware of the Commission's intention to
release interview notes and audio files other than through the archives process. This lack of awareness may well have
led to a lack of clarity by some parties that the interviews might become public at the conclusion of the Commission’s
operations. In addition, many early interviews, despite an interview procedure memorandum which expressly provided
for recording absent extraordinary circumstances, were not recorded and MFRs were created after the fact through the
notes of the staff members present. MFRs created through this process have faced claims of inaccuracy. (Quotes
taken from MFRs and used in the Report have been verified independently.)
For these reasons, the staff is paying particular attention to objections to the release of MFRs and other
documents not used in the Report. As part of the release decision the staff is and will weigh the benefit of public
access to the MFR (or audio files and documents, for that matter) and the nature and quality of the materials against
objections to release raising one or more of the issues outlined above.
To formalize this process, we recommend that the Commission adopt the resolution below.
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Adoption of Recommendations by the Executive Director, General Counsel and Deputy General
Counsel Regarding the Use of Interviews and Documents in the Commission’s Website, E-Book and EPub Enhanced E-Book
WHEREAS, in connection with the Commission’s report to the President and to the Congress of a report on the causes
of the current financial and economic crisis in the United States the Commission intends to create a publicly available
website and may cause to be published an e-book and e-pub enhanced e-book (collectively electronic presentations),
and
WHEREAS, the electronic presentations may include confidential interviews, documents and other materials requiring
approval of the Commission prior to public release, and
WHEREAS, to assure that such material is expeditiously cleared and available for inclusion in the electronic
presentations, the General Counsel suggests that the Commission adopt the following resolutions:
RESOLVED, that the Commission delegates to the Executive Director, the General Counsel and Deputy General
Counsel the power to review, resolve or override, on behalf of the Commission, objections made to the public release
of confidential documents or interviews, on a case-by-case basis, after weighing the nature of the objections against the
benefit to the report and the American public of such public release, and to approve the posting of such documents in
the electronic presentations;
RESOLVED, that if the Executive Director, the General Counsel and Deputy General Counsel determine necessary or
appropriate, they may seek the advice of the Chairman and Vice Chairman regarding whether to override objections
made to the public release of confidential documents or interviews;
RESOLVED FURTHER, that the Commission adopts as the action of the Commission the recommendations of the
Executive Director, General Counsel and Deputy General Counsel regarding the release and posting of such
confidential documents, interviews or other materials, as well as public documents, for inclusion in the Commission’s
electronic presentations, and
RESOLVED FURTHER, that the Deputy General Counsel shall inform the Commissioners from time to time upon
their request as confidential documents, interviews or other materials to which objections have been made are
confirmed for public release in the Commission’s electronic presentations.
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Attachment, FCIC Memorandum dated November 16, 2010
Financial Crisis Inquiry Commission
Agenda Item 6 for Business Meeting of November 17, 2010
Document and Interview Review/Clearance Process
Memo To:
Commissioners of the FCIC
From:
Gary J. Cohen
General Counsel, FCIC
cc:
Wendy Edelberg
Maryann Haggerty
Cassidy Waskowicz
Date:
November 16, 2010
Re:
Considerations with Respect to the Public Release of Confidential Documents and
Materials in the Report, the E-Book and Website.
The FCIC was created by the Fraud Enforcement and Recovery Act of 2009, which was signed into law on
May 20, 2009. The FCIC's mission is “to examine the causes, domestic and global, of the current financial and
economic crisis in the United States.” Congress empowered the Commission to “hold hearings,... take testimony,
receive evidence,... and require, by subpoena or otherwise, the attendance and testimony of witnesses and the
production of books, records, correspondence, memoranda, papers, and documents.”
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In connection with its mandate, the Commission has received millions of pages of documents, conducted
numerous surveys, interviewed hundreds of witnesses, held 19 days of hearings, compiled video records of testimony
before the Commissioners, and completed numerous reports, both confidential and public, on various aspects of the
financial crisis. The Commission has received or created approximately 15 terabytes of data, some of which remains
to be examined.
It is our intent to use in the Report and our e-book both public and nonpublic documents and to create on our
website a resource of public and nonpublic documents relevant to the Commission's Report and inquiry, all with the
purpose of meeting our statutory mandate to report to the President, Congress and the public on the causes of the
financial and economic crisis.
This Memorandum proposes a process to make the Commission's work available to the public in a meaningful
and useful way. To this end I consider documents (with a focus on nonpublic documents) that may be made available
in the Commission’s Report and e-book (Report Elements), or website (Web Elements). Release of Commission
internal materials (e.g., Commissioner and staff e-mails, Preliminary Investigative Reports (PIRs) and other work
product and documents), will be the subject of a separate memorandum addressing National Archives issues. You will
note below that I have recommended that all nonpublic material for use in the final Report and the website be run
through an approval process.
A.
I recommend that Report Elements include:
all documents, 2 both physical and electronic, e-mails, video files, audio files, transcripts, and materials
prepared or compiled by the FCIC staff, such as the timeline, surveys and staff memoranda that have been
made public, that are included, referenced or footnoted in the written Report, or included in the e-book and ebook apps.
B.
I recommend that Web Elements for immediate inclusion in the website on the date the Report is
released (in addition to all material previously posted) include:
i)
ii)
iii)
all Report Elements,
all documents that previously have been cleared in connection with prior hearings (whether or not used
at the hearings),
all preliminary staff reports,
2
As used in this memorandum documents should be broadly construed to include paper documents, electronic documents, audio files, video files, compilations of
data and the like, unless the context clearly indicates otherwise.
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iv)
v)
vi)
the expanded timeline and documents referenced in the expanded timeline,
all video and testimony from the Commission hearings, and
all MFRs, audio tapes and transcripts of interviews for which confidentiality was not requested (or which
have already been cleared).
C.
In addition, in addition to material that was previously dealt with pursuant to clause A and B above, I
recommend that Web Elements also include (when and after cleared, if necessary) the following documents:
i)
ii)
iii)
iv)
v)
D.
i)
ii)
iii)
I.
all of the documents referenced in PIRs and similar staff documents,
all of the documents and follow-up answers to questions asked at public hearings ,
all MFRs, audio tapes and transcripts of interviews for which clearance is obtained,
all surveys upon which conclusions referenced in the Report were based, and
materials relevant to our inquiry and the Report which were requested, received and reviewed or
prepared by the staff during the course of our investigation and which are not otherwise included in any
of the above categories.
However, it is my recommendation that no Report Elements or Web Element be released unless:
they are reviewed by appropriate Commission staff and approved by the Executive Director or General
Counsel as appropriate to release (documents already cleared for prior use in hearings do not have to be
re-cleared or authorized),
when dealing with documents covered by confidentiality agreements or understandings, after
consultation with (and if required, occasional approval by) the document providers, and
approved or deemed approved by the Commission (in accordance with the procedures below).
Process.
A.
Choice of Documents for the Report
If there is an e-book with embedded material, at most 1 GB of supplemental material chosen by the FCIC can
be included. The two forms of e-books that include supplemental material, an e-book application (iPad and Droid) and
an enriched e-pub, are each capable of including this amount of supplemental data, although the choice of data for each
platform can differ slightly because of their different capabilities. (In addition to embedded data, e-book platforms can
include hotlinks pointing to external web content. This requires that, at the very least, the portion of the Commission's
website to which the hotlinks point be "live" when the e-book is published.)
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Thus the task ahead for the Report and e-book suggests the following steps:
1.
Staff identifies and physically segregates in electronic form all Report Elements". 3
2.
Staff determines the source of each Report Element and, where these were produced pursuant
to confidentiality or other agreement notifies and seeks (generally as per these agreements 14 days in advance)
comment from the Report Element provider to the use of the Report Element. (While the FCIC does not need
affirmative consent pursuant to most of our Confidentiality Letters, either receiving no response to the notice
letter or an affirmative consent should eliminate any concerns regarding release of trade secret or business
proprietary information.) (This process is already underway, and has resulted in a number of questions and
requests for clarification, objections to disclosure, and requests for further discussion from the recipients.) As
a courtesy, we are also telling providers of Report Elements that we might also use their previously cleared
materials in the Report.
3.
Staff determines if any Report Elements require special affirmative consent due to special
terms of any confidentiality agreements or other previously agreed-upon use restrictions, and pulls the
document if the same is not forthcoming.
4.
Where a request for comments elicits objections to disclosure or a required consent is not
forthcoming, Staff determines if release of the Report Elements raises trade secret, personal privacy, or
regulatory or statutory restrictions on disclosure, collectively "special concerns." If the staff determines that
the special concerns are not valid, subject to the other requirements herein, the documents will be released. If
valid, the staff will consider applicable legal requirements, and will weigh the benefit of disclosure by the
Commission against the potential harm to the provider caused by disclosure of the special concerns, negotiate
redactions if the same will be helpful in resolving disclosure issues and if the Report Element would still be
worthy of disclosure after the redactions, and raise the matter to the Commission if the special concern issues
cannot be resolved by staff and the document provider. Once resolved, the staff will then adjust the
composition of the Report Elements accordingly. The decision about whether to release or redact Report
Elements after valid objection must be made on a case-by-case basis depending upon the nature of the material
under consideration.
3
This Memorandum primarily addresses electronic release of documents, but as these items will likely constitute documents used as the basis for footnotes, the
same considerations as to care in checking and clearance applies to use in the printed Report.
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B.
Choice of Documents for the Website
Documents released via the website make up the next subset. (Choice of the location/hosting of the permanent
website will be the subject of a separate memorandum.) Website decisions for material hot-linked to the web from the
e-book must be made when the e-book is "printed." As a practical matter other website decisions can be delayed until
the end of January 2011 (to allow time to implement the decisions by February 13, 2011), and so the Commission will
have additional time to consider and clear documents not included, or referred to, in the Report.
Thus the task ahead for the Web suggests the following steps (of course in all cases modified to the extent that
items have already been cleared as part of Report Elements):
1.
Staff identifies and physically segregates in electronic form all Web Elements. 4
2.
Staff determines the source of each Web Element and, where these were produced pursuant to
confidentiality or other agreement notifies and seeks (generally as per these agreements 14 days in advance)
comment from the Web Element provider to the use of the Web Element. (While the FCIC does not need
affirmative consent pursuant to most of our Confidentiality Letters, either receiving no response to the notice
letter or an affirmative consent should eliminate any concerns regarding release of trade secret or business
proprietary information.) Staff also determines after consultation with the Web Element provider if there are
any needed redactions. (This process is already underway, and has resulted in a number of questions,
objections to disclosure and requests for clarification and further discussion from the recipients.) As a
courtesy, we are also telling providers of Web Elements that we might also place their previously cleared
materials on the Web.
4
Clearing MFRs and interviews is a very labor intensive process. The highest priority will be be given to MFRs and audio tapes or transcripts of individuals quoted
in the Report. Next, the staff will determine which interviews should have priority for clearance, although as a practical matter we are seeking clearance for all of
them at this time, and prioritization will come into play when dealing with objections. Some interviewees were assured by FCIC staff that the interviews would be
private, or were for background purposes only, and that, of course, will be respected. However, even in those cases , people may change their views and we should
ask about release anyway. If promised confidentiality is not waived, the interview materials should be left to the National Archives unless there is a compelling
reason to disclose documents and override the promise where circumstances permit. (Virtually all interviewees were informed that the interview materials would
be delivered to the National Archives.)
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3.
Staff determines if any Web Elements require special consent due to special terms of any
confidentiality agreements or other previously agreed-upon use restrictions, and seeks consent where needed
and pulls the document if the same is not obtained.
4.
Where a request for comments elicits objections to disclosure or a required consent is not
forthcoming, Staff determines if release of the Web Elements raises special concerns. If the staff determines
that the special concerns are not valid, subject to the other requirements herein, the documents will be released.
If valid, the staff will consider applicable legal requirements, and will weigh the benefit of disclosure by the
Commission against the potential harm to the provider caused by disclosure of the special concerns, negotiate
redactions if the same will be helpful in resolving disclosure issues and if Web Element would still be worthy
of disclosure after the redactions, and raise the matter to the Commission if the special concern issues cannot
be resolved by staff and the document provider. Once resolved, the staff will then adjust the composition of
the Web Elements accordingly. The decision about whether to release or redact Web Elements after valid
objection must be made on a case-by-case basis depending upon the nature of the material under consideration.
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C.
Commission Approval Process
The decision to release publicly confidential documents is one which should be made by the full Commission,
either directly or through a process of delegation. It is unwieldy and impractical to expect that the full Commission will
review all of the Web Elements and Report Elements, so a procedure for approval should be considered. Currently, the
Commissioners are governed by the following:
The Ethics Guidelines for Commissioners provide that the Chairman or the Commission may release
confidential information.
Many of the Commission’s Confidentiality Agreements provide that documents may be released upon the
agreement of the Chairman and the Vice Chairman, or upon a majority vote of the Commission.
In addition, the Commission must approve the Report, which includes the Report Elements and, for our
purposes, Web Elements as well.
As noted above, in those few cases where there is staff discretion (such as under clause C(v) above), I
recommend that the Executive Director or General Counsel determine which documents should be recommended to the
Commission for a determination in accordance with its processes for inclusion in Report Elements or Web Elements.
This will primarily occur in situations where the staff has received objections to disclosure and the determination to
override the objections must be made.
II.
Legal Considerations for the Release of Documents Received by the Commission
There Are Statutory and Regulatory Prohibitions on the Release of Confidential Information, but
Congress has investigative powers which have been held to override these provisions, and the
Commission has the benefit of those powers as a creation of Congress.
18 USC §1905. Disclosure of confidential information generally --
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Whoever, being an officer or employee of the United States or of any department or agency thereof, any
person acting on behalf of the Federal Housing Finance Agency, or agent of the Department of Justice as
defined in the Antitrust Civil Process Act (15 U.S.C. 1311–1314), or being an employee of a private sector
organization who is or was assigned to an agency under chapter 37 of title 5, publishes, divulges, discloses, or
makes known in any manner or to any extent not authorized by law any information coming to him in the
course of his employment or official duties or by reason of any examination or investigation made by, or
return, report or record made to or filed with, such department or agency or officer or employee thereof, which
information concerns or relates to the trade secrets, processes, operations, style of work, or apparatus, or to the
identity, confidential statistical data, amount or source of any income, profits, losses, or expenditures of any
person, firm, partnership, corporation, or association; or permits any income return or copy thereof or any book
containing any abstract or particulars thereof to be seen or examined by any person except as provided by law;
shall be fined under this title, or imprisoned not more than one year, or both; and shall be removed from office
or employment.
In addition, 12 CFR part 261 creates similar limitations on the disclosure of "confidential supervisory
information" of the Federal Reserve Board, 12 CFR part 4 protects "non-public OCC information," 12 CFR part 309
protects "non-public information" of the FDIC and so forth.
The Commission is formed under Congress, and is entitled to the benefit of Congress’s authority and power to
obtain information, including but not limited to proprietary information, is extremely broad. The Commission's
inextricably related ability to release this information arises out of the objectives of the Commission, to issue a report.
While there is no express provision of the Constitution or specific statute authorizing the conduct of congressional
investigations, the Supreme Court has firmly established that such power is so essential to the legislative function as to
be implied from the general vesting of legislative powers in Congress. McGrain v. Daugherty, 273 U.S. 135 (1927);
Watkins v. United States, 354 U.S. 178 (1957); Barenblatt v. United States, 360 U.S. 109 (1959); Eastland v. U.S.
Servicemen’s Fund, 421 U.S. 491 (1975); Nixon v. Administrator of General Services, 433 U.S. 435 (1977). Even the
pendency of civil or criminal litigation cannot delay a committee inquiry. Sinclair v. United States, 279 U.S. 263
(1929).
The federal courts, when applying Congress’s broad investigatory power to obtain access to documents
containing confidential or proprietary information, have expressly held that executive agencies and private parties may
not deny Congress access to such documents, even if they may contain trade secrets or other sensitive information
whose disclosure to the public is otherwise statutorily barred. See, e.g., FTC v. Owens-Corning Fiberglass Corp., 626
F. 2d 966, 970 (D.C. Cir. 1980); Exxon Corp. v.FTC, 589 F. 2d 582, 585-86 (D.C. Cir. 1978), cert. denied, 441 U.S.
943 (1979); Ashland Oil Co., Inc. v. FTC, 548 F. 2d 977, 979 (D.C. Cir. 1976). Specifically, courts have held that
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release of information to a congressional committee is not considered to be disclosure to the general public, see
Owens-Corning Fiberglass Corp., 626 F. 2d at 970; Exxon Corp., 589 F. 2d at 589; Ashland Oil, 548 F. 2d at 979;
Moon v. CIA, 514 F. Supp. 836, 840-41 (D.D.C. SDNY 1981), and once documents are in congressional control, the
courts will presume that committees of Congress will exercise their powers responsibly and with proper regard to the
rights of the parties. See, Owens-corning Fiberglass, 626 F.2d at 974; Exxon Corp., 589 F. 2d at 589; Ashland Oil,
548 F. 2d at 979; Moon v. CIA, 514 F. Supp. at 849-51.
In addition, our statute expressly requires the Commission to seek testimony or information from principals
and other representatives of government agencies and private entities that were significant participants in the United
States and global financial and housing markets during the time period examined by the Commission. As the
Commission’s enabling legislation manifests the clear congressional intent to establish an independent legislative
branch entity with investigative powers, authorities and prerogatives equivalent to those of past and present standing
and special investigatory committees, the decision to release confidential documents or materials as part of its statutory
duty to report on the causes of the crisis rests in the Commission’s discretionary determination that such public release
will further fulfillment of its mandated statutory mission, a decision that cannot be limited by any court ruling or
regulatory or statutory standard. Such decisions must be made responsibly and with proper regard to the rights of the
parties involved. As such,, the disclosure of relevant information by the Commission as part of its Report should be
protected as outlined above.
This broad power to receive and disclose confidential and proprietary information is limited by the purpose for
which the information is obtained, however, and while the use of that information in the report to be delivered to
Congress and the President, and therefore to the American public would be within the powers described above, there is
a question as to whether the same standard would be applied should that information be disclosed in a commercially
released book without express or implied consent of the information provider. While this is an issue for the publisher
and not the Commission, I nonetheless recommend that the FCIC take special care to insure compliance with the
appropriate clearance procedures for all documents referenced of quoted in the Report or included in the enhanced ebooks.
Finally, it appears, based on a 5th Circuit Court of Appeals case, United States v. Wallington, 889 F.2d 573
(5th Cir. 1989) that violations of 18 USC §1905 require mens rea, a guilty mind or conscious intent, and inadvertent
violations are not actionable. (There are very few reported cases referencing §1905.)
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The FCIC Has Entered into Confidentiality Letters Pursuant to Which It Has Received Confidential
Information
The FCIC has entered into at least 69 confidentiality agreements of various forms pursuant to which it has
committed to a process concerning the Commission's use of documents and other information submitted to it by
document providers, including federal agencies and departments, state and local government entities, and business
organizations and individuals. (A list of the parties to those agreements is attached as Appendix A.)
While the confidentiality agreements vary, virtually all of them contain provisions that require the FCIC to
maintain in confidence the documents designated as confidential and to consult with the document provider prior to
disclosing the information (and often specify a 14 day consultation period). The agreements all allow the FCIC to
disclose the confidential information it determines appropriate in any interim or final report or in connection with
public hearings upon the agreement of the Chairman and the Vice Chairman or upon a majority vote of the FCIC.
Many of the agreements specifically reference, for example, certain bank regulatory reports confidentiality provisions,
trade secrets and similar items protected from disclosure by statute or regulation as examples of the types of the
documents entitled to confidential treatment in accordance with the letters. But that does not override the
Commission's ability to release the documents if it so determines. In many of the earlier Confidentiality Letters, the
FCIC has stated that it will ask the National Archives not to release confidential documents submitted to the
Commission for at least five years after the conclusion of the Commission's work (in keeping with a pattern set by the
9/11 Commission).
A typical corporate Confidentiality Letter provides:
In accordance with its statutory mandate and its duty to the American public, the Commission, if it determines
it is in the public interest, may release to the public non-public information obtained from XXX as part of any
interim or final report to the President and Congress, or in any public hearings, if the Commission determines
to do so by a majority vote, or by the decision of the Chairman and Vice Chairman acting together on behalf of
the Commission.
Prior to any release of non-public information under the above paragraph, the Commission will give written
notice to XXX, and allow XXX to consult with the Commission before the Commission uses any of the
XXX’s non-public information in any interim or final report to the President and Congress, or in any public.
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With respect to interviews and related MFRs, it has generally been the practice of counsel to financial
institutions and departments and agencies to note either by e-mail as part of the process by which the interviews were
arranged, or during the interview, that the interviews would also be covered by the confidentiality agreements between
the FCIC and the respective financial institution or agency or department. Interviews conducted with industry
observers who are not affiliated with organizations subject to confidentiality agreements have usually not contained
those types of restrictions, but even in these situations an FCIC staffer should review the tapes to be certain. Some
interviews were conducted with assurances of a confidential treatment or under the explanation that they were "for
background purposes." For these interviews, I would notify the interviewee (and we are trying to notify all
interviewees) and see if he or she objects to disclosure before making a final release decision. And if there is no
objection then disclosure should be appropriate.
Not all entities and agencies have entered into Confidentiality Letters with the FCIC. Some have instead
submitted documents or consented to interviews pursuant to individual requests, letters or e-mails requesting
confidentiality of the applicable material.
Internally, the FCIC recognizes the sensitive nature of its work and has taken precautions to ensure the
confidentiality of nonpublic information that it receives. These steps include requiring all FCIC personnel to sign a
confidentiality and non-disclosure agreement, which protects all nonpublic information and specifically restricts the
dissemination of any trade secrets or other proprietary information.
Given the nature of the Confidentiality Letters into which the FCIC has entered, I believe there may be a
distinction between public release via the Commission's Report or website (which the FCIC will treat as ancillary to
the Report) and public release through the National Archives. As to the former, compliance with the consultation or
consent process described above should eliminate most concerns regarding the disclosure of trade secrets and other
confidential information. As to the latter, delivery to the National Archives with a Commission suggested release
schedule is only the beginning of the analysis to be addressed at a later date.
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Appendix A
Confidentiality Letters [to be updated]
TAB
NAME
1
SEC- Mark Cahn
2
Board of Governors of the Federal Reserve System- Ben Bernanke
3
OCC- Julie Williams
4
FDIC- Michael Bradfiel
5
FHFA- Alfred Pollard
6
DOL- Deborah Greenfield
7
CFTC- Dan Berkovitz
8
OTS- Deborah Dakin
9
DOJ- Ronald Weich
10
Treasury- George Madison
11
Citi- Brad Karp
12
LexisNexis- Kara Hinrichs
13
HUD- Heather Kanovsky
14
FINRA- James Shorris
15
State Street- David Phelan
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16
NY State Banking- Marjorie Gross
17
Goldman Sachs- Richard Klapper
18
Morgan Stanley- Raul Yanes
19
PIMCO- John Sopko
20
Vanguard- Nathan Will
21
Fannie Mae- Jeff Kilduff
22
UBS- John Moon
23
Barclays- Caroline de Onis
24
S&P- Brian Markley
25
CT AG- George O'Connell
26
OH AG- Doreen Johnson
27
omitted
28
AIG- Mitchell Berger
29
Cornwall Capital- William Gussman
30
Magnetar- Steven Ross
31
Moody's- Steven Ross
32
MKP- Patricia Alcamo
33
GSC Group- Daniel Ross
34
NIBC- Albert Lambert
35
Laura Schwartz- Robin Alperstein
36
Scion- Michael Burry
37
ACA- Nathan Erickson
38
UBS- Maite Quino
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39
Alan Roseman- Robert Bennett
40
Charles Gates- Daniel Zinman
41
Markit- Mark Davidson
42
Eric Dinallo- John Kenny
43
TCW - Michael Cahill
44
Andrew Forster- David Brodsky
45
Joe Cassano- Jim Walden
46
Credit Suisse- Daniel Zinman
47
Wachovia- Robert Kelner
48
NCRC- Josh Silver
49
Ally Financial- John Hromy
50
S&P (Special)- Brian Markley
51
PIMCO –
52
Moody's (Special)- Sharon Nelles
53
Wendy Ruberti
54
Fremont General- Jim Caroll
55
NCUA- Robert Fenner
56
Maryland Insurance Administration- Neil Miller
57
David Sambol- Walt Brown
58
ICAP North America Inc.
59
RMIC- John Heitkamp
60
Greg Levine
61
Aladdin Capital- Sharad Samy
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62
Stone Tower- Robert Carangelo
63
Vanderbilt Capital- Peter Simmons
64
PMI- Andrew Cameron
65
Alliance Berstein- Mark Manley
66
Tim Harkness- BlackRock
67
ING- Gerald Lins
68
Deerfield Capital- Jonathan Polkes
69
MGIC- Jeffrey Lane
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Financial Crisis Inquiry Commission
Minutes of FCIC Meeting of
January 24, 2011
ATTACHMENT 3
APPROVED Beta Site 1
See Separate PDF
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Financial Crisis Inquiry Commission
Minutes of FCIC Meeting of
January 24, 2011
ATTACHMENT 4
Beta Site 2
See Separate PDF
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Financial Crisis Inquiry Commission
Minutes of FCIC Meeting of
January 24, 2011
ATTACHMENT 5
Gary Cohen’s Memo on Archive Protocol
Memo To:
The Commissioners of the Financial Crisis Inquiry Commission
From:
Gary J. Cohen
General Counsel
Cassidy Waskowicz
Deputy General Counsel
cc:
Wendy Edelberg, Executive Director
Maryann Haggerty
Date:
January 21, 2011
Re:
Archived Documents
In connection with its mandate “to examine the causes, domestic and global, of the current financial and
economic crisis in the United States,” Congress empowered the Commission to “hold hearings,... take testimony,
receive evidence, ... and require, by subpoena or otherwise, the attendance and testimony of witnesses and the
production of books, records, correspondence, memoranda, papers, and documents.” The Commission has received
millions of pages of documents, conducted numerous surveys, interviewed hundreds of witnesses, held hearings,
compiled hours of video of testimony before the Commissioners, and completed confidential and public reports on
various aspects of the financial crisis. The Commission has received or created approximately 15 terabytes of data.
The subject of this Memorandum is to provide background to the Commissioners when they consider how to
release Commission material submitted to the National Archives and Records Administration (the "National Archives"
or "NARA"). This is not intended to be an action Memorandum at this time.
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We have previously prepared a Memorandum to the Commissioners dated November 16, 2010
"Considerations with Respect to the Public Release of Confidential Documents and Materials in the Report, the EBook and Website" which discusses the public release of documents in the Commission's Report and a follow-up
Memorandum dated January 21, 2011 concerning the public release of documents on the Commission's website.
Terms defined in those Memoranda are similarly defined herein. This Memorandum addresses the release through
NARA of documents which were not released as part of the Report or on the Website.
Precedents for the Release of Sensitive Business Records through NARA
Rather than propose a specific release schedule, we think it better to provide some examples adopted by other
commissions and let the Commissioners make the determination themselves. We have asked the National Archives for
information concerning the release of information by other commissions. They have advised us of the following:
Other than those Commissions which released everything on termination, the 9/11 Commission adopted the
quickest release policy and chose to make everything (including deliberative materials) available after five years from
termination of the Commission (subject to national security concerns).
The Commission on Proliferation of Weapons of Mass Destruction and Prevention of Terrorism opened all
records after 10 years except Commissioner and staff email which is to be opened only after 25 years.
The Judicial Review Commission on Foreign Asset Control established three categories for its records: open
immediately, closed for 15 years, and closed for 75 years (all the records require screening before release). Broadly,
the Press Releases, Reports to Congress, Legal Files, and Hearings were opened immediately; Travel Files, General
Office Program Files, Correspondence, OFAC Briefing Materials and Document Production are to be opened in 15
years; Administrative Files, OFAC Case Files, Commissioner and Staff Files, and Documents Provided by the Senate
Intelligence Committee are to be opened in 75 years.
The Commission to Assess US National Security Space Management and Organization closed its records for
between four and 12 years. But all of its records will be screened for classified information. Most records are to be
opened after 4 years, but the following are to be opened after 12 years: those "specially-designated as sensitive to
policy deliberations; containing policy deliberations themselves; marked as not being releasable outside the
Commission; and properly marked as containing proprietary information."
The other commission records maintained by the Center for Legislative Archives (the NARA group
responsible for the FCIC) were opened immediately upon transfer to NARA. These include the Commission on
Military Training and Gender Issues, Commission on Electronic Commerce, the Commission on the Advancement of
Federal Law Enforcement, the Millenial Housing Commission and the Commission on Affordable Housing and Health
Facility Needs for Seniors in the 21st Century. Even in those cases NARA always screens everything, but, barring
anything personal such as SS#s or medical records, anything closed by statute (ex. tax returns or grand jury info),
everything was opened immediately.
As noted in prior a Memorandum, when deciding on a release schedule, Commissioners should weigh the
public's interest in access to the documents not released by the Commission on its website and documents pertaining to
the internal operations of the Commission as soon as possible against the fact that many of the records submitted to the
FCIC contain proprietary business and financial information, bank examination information and other confidential
material, and that too soon a release of internal deliberative material may focus attention away from the Report.
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Congress has recognized the need to keep confidential information nonpublic. Below is a brief summary of
how records are handled by Congress and the executive branch.
Congressional Records
Records of the U.S. House of Representatives--including investigative records of House committees--remain
closed, by default, for 30 years.[1] Investigative records containing private personal information may remain closed
for 50 years.[2] If the Clerk of the House determines that the availability of any records “would be detrimental to the
public interest,” the records may remain closed even longer.[3]
Senate records remain closed, by default, for 20 years.[4] As in the House, investigative records containing
personal information are closed for 50 years,[5] and the Secretary of the Senate may close records for longer “in the
public interest.”[6]
Executive Records
Presidential and Vice-Presidential records in various categories may be sealed for a period of up to 12
years.[7] Among these categories is one for “trade secrets and commercial or financial information obtained from a
person and privileged or confidential.”[8]
Other Relevant Considerations
More generally, the National Archives maintains legal restrictions on the use of government records, by
default, for a period of 30 years.[9] The Archivist (consulting with the relevant agency head) may choose to maintain
restrictions for a longer period of time.[10] For example, we understand that bank examination records are maintained
as confidential by the National Archives for 50 years. In addition, as to FCIC records received from federal agencies
and departments, NARA has developed working relationships with many of the providers and may have independent
release arrangements with them. To the extent that the FCIC has not received prior clearance, such arrangements will
trump the FCIC's desires regarding release. [11]
The Freedom of Information Act, which promotes government transparency, contains exemptions to protect
certain types of information: properly classified material; limited kinds of purely internal matters; matters exempt from
disclosure by other statutes; trade secrets or commercial or financial information obtained from a person and privileged
or confidential; internal agency communications that represent the deliberative, pre-decisional process, attorney work
product, or attorney-client records; information that would be a clearly unwarranted invasion of personal privacy; law
enforcement records to the extent that one of six specific harms could result from disclosure; bank examination
records; and oil well and similar information.[12] The FCIC is not subject to FOIA but the exemptions provided in the
act are instructive as to the type of material we may wish not to immediately disclose.
The SEC regularly withholds disclosures pursuant to its FOIA compliance regulations,[13] including in the
context of investigating the matters similar to that which are the focus of the FCIC's investigations.
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Possible Alternatives for the FCIC’s Disclosure of its Archived Records
As alternatives are considered, please keep in mind that deciding to release business records under one schedule
does not necessarily require that internal Commission records be released at the same time, or that material received
from agencies be released at the same time as material received from private firms. Given that, here are some
suggestions:
Maintain proprietary records as confidential for 20 or 30 years in accordance with Congressional rules of
the House or Senate. Under these rules, the Commission would not release proprietary documentation for a default
period of 20 or 30 years. The Commission might adopt the House approach of 30 years because its authorizing statute
provides that it sits “in the legislative branch.” This is the preferred approach of counsel to a number of financial
institutions with which the FCIC has dealt.
Some counsel to the banks have suggested a release schedule of 12 years in accordance with the
Presidential Records Act. If the Commission does not wish to adopt the legislative standards in full for all of its
records, but does wish to preserve business confidentiality for more than five years, it could look to the Presidential
Records Act as a compromise. Under that approach, the Commission could seal records, including those containing
trade secrets or other commercial and proprietary financial information, for 12 years, thereby lessening the potential
impact for adverse consequences when release is finally implemented.
Seal records for at least five years. The 9/11 commission met as a group to determine the appropriate time
period before which archived records would be generally available. The 9/11 commission chose five years and the
FCIC, in some confidentiality agreements, has already indicated an intention to request a five-year
nondisclosure period with the National Archives. The 9/11 commission did not distinguish between material received
by the commission or created by the commission, although differing schedules were discussed. Thus all 9/11
commission archived documents started becoming available in 2009, approximately five years after its report was
released (subject to national security holdbacks). However, not all of the material has been processed and so the full
record is not yet available. There were those on the 9/11 commission who desired immediate release while others were
in favor of up to 10 years. They chose 2009 to begin releasing documents to get through two congressional cycles and
to get out of "the news cycle."
Regardless of when the Commission determines that FCIC records may be released in general, NARA will
attempt to review all of the Commission's documents and restrict release if the material is subject to a Confidentiality
Letter and if it clearly contains confidential material or trade secrets, or if it was received from an agency that is the
beneficiary of a statutory or regulatory nondisclosure protection. NARA has told us that it will make its job more
manageable if a longer time period is suggested by the FCIC. (It is my view that material which was neither used in the
Report, nor posted on the website, is not “part of any interim or final Report to the President and Congress, or [used] in
connection with any public hearings” (language allowing immediate release in many of the FCIC’s Confidentiality
Letters). This is also the view of the National Archives after the Commission's staff's meeting with them on September
23, 2010.)
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Conclusions
The Commissioners should decide when they want NARA to disclose archived materials after a full discussion
at the final Commission meeting.
It is possible for the Commissioners to adopt different time periods for release for different categories of
documents, so that third party documents could be released after X years, internal staff memoranda (for example PIRs)
after Y years, and all other materials (including e–mails and notes) after Z years.
So one option would be for the Commission to choose one disclosure period for everything, in which case I
would recommend no sooner than five years (to push the release out past the statute of limitations for lawsuits
involving the financial crisis). Alternatively, the Commission can create categories for release such as a five or ten
year release schedule for submitted documents, and a longer release period for internal Commission workings such as
staff notes, all e-mails and staff memorandum (including PIRs). For simplicity it would be best to choose one period
for everything, but the Commission may wish at least to carve out Commission e-mails for a longer retention period,
since such communications are internal deliberative matters.
As it makes its determination, the Commission should be mindful of its stated views in favor of transparency in
deciding what it posted on the website as too big a contrast with a longer nondisclosure period for the Commission's
own internal documents.
Finally, it is not unusual to provide for immediate access to archive materials for certain individuals. In this
regard I recommend that all of the Commissioners, Peter Kadzik ( outside counsel recently retained by the
Commission ), Gretchen Newson, Scott Ganz, Wendy Edelberg, Gary Cohen, Greg Feldberg, Chris Seefer, Maryann
Haggerty and Cassidy Waskowicz, be granted access to the Commission documents at the National Archives.
[1] House Rule VII(3)(b)(4).
[2] House Rule VII(3)(b)(2).
[3] House Rule VII(4)(a).
[4] S. Res. 474 § 2(a)(2), 96th Congo (1980).
[5] Id. § 2(a)(1).
[6] Id. § 3(b).
[7] 44 U.S.C. §§ 2204, 2207 (2006).
[8] Id. § 2204(a)(4).
[9] Id. § 2108.
[10] Id.
[11] As an example, assume that the FCIC has deposited with NARA a bank examination report as to which no consent to disclose has been sought or received. In
that case NARA may schedule release in 50 years, even if the FCIC chose a 5 year release schedule for its documents in general.
[12] 5 U.S.C. §§ 552(b)(4)-(7), 552(b)(4)(2006).
[13] 17 C.F.R. § 200.80(b)(4) (2010).
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Appendix A
FINANCIAL CRISIS INQUIRY COMMISSION
Records Management Policy.
1. Purpose. This guidance contains mandatory Financial Crisis Inquiry Commission ("FCIC" or the
"Commission") procedures for managing records effectively and efficiently throughout their life cycle. These
procedures will help FCIC successfully accomplish its mission, preserve official records in accordance with
applicable statutory and regulatory requirements, and promote access to information by FCIC staff and the
public, as appropriate.
2. Authority. The FCIC will comply with 44 U.S.C. Chapters 21, 29, 31, and 33 and 18 U.S.C. Chapter 101, and
regulations established by the National Archives and Records Administration (NARA) for managing Federal
records as stated in 36 C.F.R. parts 1220, 1222, 1228, 1234, and 1236.
3. FCIC Responsibilities under the Document Retention Policy. The Executive Director and General Counsel
shall establish and maintain an active, continuing program for the economical and management of the records of
the FCIC (44 U.S.C. § 3101).
4. Policy.
A. FCIC will establish effective management controls over the creation, maintenance, and use of records in
any medium, including electronic and microform media, throughout their life cycle.
B. The provisions of this directive are mandatory and are applicable to all Commissioners and staff of the
FCIC.
C. All Government employees and contractors are required by law to create and preserve records containing
adequate and proper documentation of the organization, functions, policies, decisions, procedures, and
essential transactions of the agency. In addition, Federal regulations govern the life cycle of these records: they
must be properly stored, preserved, and available for retrieval, and may be disposed of only in accordance with
NARA-approved records control schedules.
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D. FCIC will cooperate with NARA and other agencies in applying standards, procedures, and techniques to
improve the management of records; promote the maintenance of those records of continuing value
(permanent); and facilitate the segregation and disposal of temporary records.
E. All records, including electronic and other forms of information will be systematically identified and
appraised.
F. Records are broadly defined by statute and regulation to include all recorded information, regardless of
medium or format, made or received by the FCIC under Federal law or in connection with the transaction of
public business, either preserved or appropriate for preservation because of their administrative, legal, fiscal or
informational value. Records serve as FCIC's memory; they are of critical importance in ensuring that FCIC
continues to function effectively and efficiently.
G. FCIC officials are responsible for incorporating into the records of the Commission all essential
information on their major actions. Significant decisions and commitments reached orally or by informal
electronic mail will be documented and included in the record.
H. Minutes will be taken at all Commission meetings, and these, together with a copy of the agenda and all
documents considered at or resulting from such meetings, shall be incorporated into the FCIC's record and
made available for public inspection.
I. All Commission meetings shall be transcribed or recorded and the recording or transcript shall be
incorporated into the FCIC's records and made available for public inspection.
J. The FCIC will take appropriate action to ensure that all staff and Commissioners are capable of identifying
Federal records. For electronic mail systems, the FCIC will ensure that all staff and Commissioners are
informed of the potential record status of messages, transmittal and receipt data, directories, and distribution
lists.
5. Materials to be managed under this Policy.
A. Determining if Documents are Federal Records, Nonrecords or Personal Papers.
1. Identifying Federal records.
a. Documentary materials are records when they meet both of the following conditions:
i. They are made or received by an agency of the United States Government under Federal
law or in connection with the transaction of agency business; and
ii. They are preserved or are appropriate for preservation as evidence of agency organization
and activities or because of the value of the information they contain.
b. Record status. In addition to the two conditions stated above, use the following criteria as a guide
for determining whether or not a document, such as an email message, meets the statutory definition of
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a Federal record. If the material (whether a document, email, or other recorded information) meets any
of the following criteria, it is considered a Federal record and should be preserved in accordance with
procedures set forth below:
i. It contains unique, valuable information developed in preparing position papers, reports,
studies, etc.
ii. It reflects significant actions taken in the course of conducting FCIC business.
iii. It conveys unique, valuable information about FCIC programs, policies, decisions, or
essential actions.
iv. It conveys statements of policy or the rationale for decisions or actions.
v. It documents oral exchanges (in person or by telephone), during which policy is
formulated.
vi. It adds to the proper understanding of the formulation or execution of FCIC actions or of
FCIC operations and responsibilities.
vii. It documents important meetings.
viii. It makes possible a proper scrutiny by the Congress or other duly authorized agencies of
the Government.
ix. It protects the financial, legal, and other rights of the Government and of persons directly
affected by the Government's actions.
x. It documents the persons, places, things, or matters dealt with by the Commission.
xi. It documents the administration of the Commission, such as personnel, procurement,
payroll, budget, and other "housekeeping" operations (See General Records Schedules for
many types of administrative records created by the Commission).
c. Electronic mail messages. Messages created or received on electronic mail systems may meet the
definition of record in 44 U.S.C. § 3301.
d. Working files and similar materials. Working files, such as preliminary drafts and rough notes,
emails and other similar materials shall be considered Federal records if:
i. They were circulated or made available to employees, other than the creator, for official
purposes such as approval, comment, action, recommendation, follow-up, or to communicate
with FCIC staff about FCIC business; and
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ii. They contain unique information, such as substantive annotations or comments, that add to
a proper understanding of the FCIC's formulation and execution of basic policies, decisions,
actions, or responsibilities.
e. Documents circulated to one or more Commissioners, or from a Commissioner to staff. Drafts,
rough notes, emails, or other documents that are circulated to one or more Commissioners, or from a
Commissioner to staff, are presumed to be Federal records, because such documents may contain
unique information that adds to a proper understanding of the Commission's formulation and execution
of basic policies, decisions, actions, or responsibilities. The presumption that such documents are
Federal records shall be rebutted (and the document shall be considered a nonrecord) if the document
does not contain any information that adds to a proper understanding of the Commission's formulation
and execution of basic policies, decisions, actions, or responsibilities. See infra 5.A.2.b. For example, a
draft version of the final report circulated to Commission members, and the Commissioners' e-mails of
substantive changes back to the staff, would be a Federal record.
f. Documents received from Federal agencies and private and public companies. Records reviewed
by Commissioners and/or staff which are relevant to the mission of the Commission are Federal
records. The records may be referred to in emails, memoranda, white papers, briefings, or reports.
Documents received which are irrelevant or not used by the Commission or staff are nonrecords. The
FCIC must record all Federal records it receives.
2.
Identifying nonrecord materials.
a.
General guidance. Nonrecord materials are Government-owned informational documents
excluded from the definition of "records" or not meeting the requirements of that definition. (see 36
C.F.R. §1222.34(b)). Nonrecord material may be disposed of at any time after its purpose has been
served. Nonrecord material shall not be interfiled with temporary or permanent record material. The
following are specifically excluded from status as records by statute (see 44 U.S.C. § 3301):
i. Library and museum material (but only if such material is made or acquired and preserved
solely for reference or exhibition purposes);
ii. Extra copies of documents (but only if the sole reason such copies are preserved is for
convenience of reference).
b. FCIC policy on identifying nonrecords. Documents will generally be considered federal records,
except when, as set forth above at 5.A.l.e., documents that do not contain unique information that adds
to a proper understanding of the FCIC's formulation and execution of basic policies, decisions, actions,
or responsibilities. Nonrecord material may be disposed of at any time after its purpose has been
served.
i. Documents circulated among staff. Drafts, rough notes, emails and other documents
circulated internally (among staff only, as contrasted to such items circulated to the
Commissioners) may be nonrecords if they do not contain unique information that adds to a
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proper understanding of the FCIC's formulation and execution of basic policies, decisions,
actions, or responsibilities. (It is assumed that substantive actions of the FCIC will have to be
approved by the Commission, so the internal staff commentary on memoranda that do not go
to the Commissioners or are not released to the public will be considered nonrecords.)
Example: If a staff member circulates a memorandum among staff, and another staff member
makes substantive changes which are incorporated into the final memo, then the original
document is nonrecord because the unique information that adds to a proper understanding of
the FCIC’s actions is incorporated into the new document (also see iii below).
ii. Documents circulated to one or more Commissioners, or from a Commissioner to staff. As
provided above in 5.A.l.e., such documents are generally federal records. However, if the
document does not contain unique information that adds to a proper understanding of the
FCIC's formulation and execution of basic policies, decisions, actions, or responsibilities, it is
a nonrecord. Example: An email from a Commissioner to staff notifying them that she cannot
attend a meeting is a nonrecord.
iii. Commissioner and staff notes to self. Personal notes taken during the course of FCIC
activities and not circulated to other Commissioners or staff members are generally considered
nonrecords. Examples: A Commissioner's notes to self during a team meeting is a nonrecord,
but staff notes on a team meeting where official minutes are not kept would be a Federal
record as they represent the only source of information regarding the meeting. Similarly, staff
notes on a witness interview where an official transcript is not created would be a Federal
record.
3.
Identifying personal papers.
a. Personal papers are documentary materials of a private or nonpublic character that do not relate to,
or have an effect upon, the conduct of FCIC business. Personal papers are excluded from the definition
of Federal records and are not owned by the Government. Examples of personal papers include:
i. Materials accumulated by an official before joining Government service that are not used
subsequently in the transaction of Government business;
ii. Materials relating solely to an individual's private affairs, such as outside business pursuits,
professional affiliations, or private political associations that do not relate to FCIC business;
and
iii. Diaries, journals, personal correspondence, or other personal notes that are not prepared or
used for, or circulated or communicated in the course of, transacting Government business.
b. If information about private matters and FCIC business appears in the same document, the
document shall be copied at the time of receipt, with the personal information deleted, and treated as a
Federal record.
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c. Materials labeled "personal," "confidential," or "private," or similarly designated, and used in the
transaction of public business, are Federal records subject to the provisions of pertinent laws and
regulations. The use of a label such as "personal" is not sufficient to determine the status of
documentary materials in a Federal office.
d. If personal papers are maintained at the FCIC office, they shall be clearly designated as such and
filed or otherwise maintained separately from the official records of the office.
e. FCIC officials may not remove any Federal records from FCIC custody while removing their
personal papers and designated nonrecord materials. Before anyone departs from FCIC, they shall
consult with the Executive Director or General Counsel to ensure that official records that may be
included in personal papers are returned to FCIC files. The Executive Director or General Counsel
may approve a request from the departing official to take extra copies of work-related files if the
records do not contain national security-classified information or are otherwise restricted (e.g., Privacy
Act, etc.).
B.
The FCIC has been specifically excluded from the operation of the Federal Advisory Committee Act, thereby
eliminating any document management obligations under FACA.
C.
Categories of Documents Deemed to be Federal Records
1.
Permanent records. Permanent records are those records that NARA appraises as having sufficient
value to warrant continued preservation by the Federal Government as part of the National Archives of the
United States because the records have continuing value as documentation of the organization and functions of
the FCIC or because the records document the nation's history by containing significant information on
persons, things, problems and conditions. FCIC records determined by the FCIC and approved by NARA to be
permanent must be available in a medium and format that conforms to the standards for permanent records.
FCIC permanent records shall be transferred to the National Archives of the United States at the time
designated on a NARA-approved Request for Records Disposition (SF 115). When permanent records are
transferred to National Archives, legal custody of the records is transferred to NARA at this time. NARA takes
measures needed to preserve the records and also provides reference service, including service to FCIC.
2.
Temporary records. Temporary records are records that are designated for either immediate disposal
or for disposal after a specified period of time or an event in accordance with a NARA-approved Request for
Records Disposition (form SF 115) or the General Records Schedule. Temporary Records may document
FCIC business processes or document legal rights of the government or the public, document government
accountability, or contain information of administrative or fiscal value. Records classified as temporary should
not be retained beyond their authorized retention period; nor shall they be destroyed or otherwise disposed of
prior to the end of their authorized retention period. Temporary records shall be maintained and disposed of
only in accordance with the following records control schedule:
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a. Transitory records. Records of short-term interest (180 days or less), including in electronic form
(e.g., e-mail messages), which have minimal or no documentary or evidential value. Included are such
records as:
i. Routine requests for information or publications and copies of replies which require no
administrative action, no policy decision, and no special compilation or research for reply;
ii. Quasi-official notices including memoranda and other records that do not serve as the basis
of official actions, such as notices of holidays or charity and welfare fund appeals, bond
campaigns, and similar records;
iii. Records documenting routine activities containing no substantive information, such as
routine notifications of meetings, scheduling of work-related trips and visits, and other
scheduling related activities;
iv. Suspense and tickler files or 'to-do' and task lists that serve as a reminder that an action is
required on a given date or that a reply to action is expected, and if not received, should be
traced on a given date shall be destroyed immediately, or when no longer needed for reference,
or under a predetermined schedule or business rule (e.g., implementing the auto-delete feature
of "live" electronic mail systems).
b. Non-transitory records. All temporary records that are not transitory records shall be retained until
the Commission ceases to exist. Non-transitory records shall be destroyed or transferred to GSA (as
may be required by GSA regulations) upon termination of the Commission, as appropriate, unless
those records otherwise should be retained with NARA as permanent Federal records pursuant to
Paragraph 5.A.1.
3.
Unscheduled records. Records whose final disposition has not been approved by NARA. Unscheduled
records are potentially permanent and must be treated as if they are permanent.
6.
Records Disposition Program
A.
Goals of the Program. An effective records disposition program is essential to successful records
management and is an integral part of the FCIC's information resources management program. The
goals of the records disposition program are to:
1. Maintain adequate and proper documentation and evidence of the FCIC activities for the time
required to meet programmatic needs.
2. Retire records requiring longer retention to economical storage facilities, providing savings in space
and equipment.
3. Preserve records of continuing or enduring value through transfer to the National Archives.
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B.
Records Disposition Authority. The following are the two basic types of records disposition authorities
for FCIC records:
1. NARA General Records Schedule (GRS). Disposition requirements for administrative or
housekeeping records that are common to most Federal agencies are listed in the GRS published by
NARA. The disposition requirements of the GRS, including records retention periods are mandatory
FCIC-wide unless an exception is obtained from NARA. The GRS does not cover all FCIC records.
2. FCIC Records Control Schedules. The GRS may be supplemented by FCIC-specific schedules
covering records that are unique to program administrations and staff offices. The records series or
systems contained in these records schedules are unique to their organization. Disposition instructions
and retention periods cited in these schedules are mandatory.
C.
Records Management
1. All records maintained by the FCIC shall be reviewed prior to the termination of the Commission.
Records that require review by NARA shall be collected at that point, or earlier. Permanent records
shall be designated as such and transferred to NARA.
2. Any unlawful or accidental destruction, defacing, alteration or removal of FCIC records must be
reported promptly to the Executive Director or General Counsel. The penalty for the willful and
unlawful destruction, damage, or alienation of Federal records is a fine under the provisions of Title
18, U.S.C., or 3 years in prison, or both (18 U.S.C. § 2071).
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Appendix B
Confidentiality Letters
TAB
NAME
1
Board of Governors of the Federal Reserve System- Ben Bernanke
2
OCC- Julie Williams
3
FDIC- Michael Bradfiel
4
FHF A- Alfred Pollard
5
DOL- Deborah Greenfield
6
CFTC- Dan Berkovitz
7
OTS- Deborah Dakin
8
DOJ- Ronald Weich
9
Treasury- George Madison
10
LexisNexis- Kara Hinrichs
11
HUD- Heather Kanovsky
12
FINRA- James Shorris
13
State Street- David Phelan
14
NY State Banking- Marjorie Gross
15
Goldman Sachs- Richard Klapper
16
Morgan Stanley- Raul Yanes
17
PIMCO- John Sopko
18
Vanguard- Nathan Will
19
Fannie Mae- Jeff Kilduff
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20
UBS- John Moon
21
Barclays- Caroline de Onis
22
S&P- Brian Markley
23
CT AG- George O'Connell
24
OH AG- Doreen Johnson
25
Joe Cassono- Jim Walden
26
AIG- Mitchell Berger
27
Cornwall Capital- William Gussman
28
Magnetar- Steven Ross
29
Moody's- Steven Ross
30
MKP- Patricia Alcamo
31
GSC Group- Daniel Ross
32
NIBC- Albert Lambert
33
Laura Schwartz- Robin Alperstein
34
Scion- Michael Burry
35
ACA- Nathan Erickson
36
UBS- Maite Quino
37
Alan Roseman- Robert Bennett
38
Charles Gates- Daniel Zinman
39
Markit- Mark Davidson
40
Eric Dinallo- John Kenny
41
TCW - Michael Cahill
42
Andrew Forster- David Brodsky
43
Joe Cassano- Jim Walden
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44
Credit Suisse- Daniel Zinman
45
Wachovia- Robert Kelner
46
NCRC- Josh Silver
47
Ally Financial- John Hromy
48
S&P (Special)- Brian Markley
49
PIMCO
50
Moody's (Special)- Sharon Nelles
51
Wendy Ruberti
52
Fremont General- Jim Caroll
53
NCUA- Robert Fenner
54
Maryland Insurance Administration- Neil Miller
55
David Sambo l- Walt Brown
56
ICAP North America Inc.
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Financial Crisis Inquiry Commission
Minutes of FCIC Meeting of
January 24, 2011
ATTACHMENT 6
APPROVED Additional voting procedures for remaining Commission actions
Note to Commissioners from Gary Cohen --The Chairman asked me to prepare two additional voting and
quorum procedures for consideration by the Commissioners to insure that matters in the next three weeks as the
Commission winds down can be handled expeditiously. I therefore changed the unanimous written consent to a
majority, and added to the existing 48 hour notice provision for a meeting (which could be exercised by either the
Chairman or Vice Chairman) to include e-mail voting in a manner similar to applied for the Report.
******************
The Commission’s Rules, Part III, Meetings, is hereby amended as follows:
F. Action Without Meeting (replaces existing F.).
Any action required or permitted to be taken by the Commission at a duly called meeting may be
taken without a meeting if a majority of the Commissioners shall consent in writing to such action. Such written
consent or consents shall be filed with the minutes of the proceedings of the Commission. Such action by written
consent shall have the same force and effect as a majority vote of such Commissioners at a duly called meeting.
G. Voting and Quorum By E-Mail (new provision)
1.
For the one or more meetings of the Commission called for the purpose of concluding the business of the
Commission after the date of adoption of this Amendment, either the Chairman or the Vice Chairman may call a
meeting and set the agenda, a date and schedule the beginning and end time for the meeting (which can either be in
person and/or by telephone) on no less than 48 hours notice (a "Concluding Meeting").
2.
The notice of a Concluding Meeting shall include a statement to the effect that email voting shall be available
and shall designate the Deputy General Counsel (cwaskowicz@fcic.gov) to be the recipient of the email votes
accepting or rejecting matters to be presented therein.
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3.
Email votes for or against the matters noticed for the Concluding Meeting may be cast at any time during and
after the Concluding Meeting until the earlier of the time (i) all 10 Commissioners have either voted in person, by
telephone or by email, and (ii) 24 hours after the date and time the Concluding Meeting was scheduled to end.
4.
The email address from which the vote is cast by Commissioners shall be the either the one regularly used by
the Commission to send out "All Commissioners" email notifications, or the Commissioner's fcic.gov address. The
Deputy General Counsel shall confirm to all Commissioners the receipt of email votes.
5.
If there are fewer than 6 Commissioners present at the beginning of a Concluding Meeting, provisional votes
for or against matters under consideration may be called for and cast and the determination of whether a quorum
existed for the Concluding Meeting shall be deferred until the earlier of the time (i) 6 Commissioners shall be present
or deemed present and (ii) time for email voting has passed. A Commissioner timely casting his or her vote by email
shall be deemed to have been present at all times during the Concluding Meeting in determining the existence of a
quorum.
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Financial Crisis Inquiry Commission
Agenda Item 4 for FCIC Business Meeting of February 9, 2011
Minutes of FCIC Meeting of
January 29, 2011
Agenda Item 1: Call to Order
Chairman Angelides called the meeting to order at 5:47pm ET.
Agenda Item 2: Roll Call
Chairman Angelides asked Gretchen Newsom to call the roll of the Commissioners. Present were Phil
Angelides, Brooksley Born, Byron Georgiou, Doug Holtz-Eakin, Heather Murren, and John W. Thompson.
Vice Chairman Thomas and Commissioners Graham, Hennessey, and Wallison were absent.
Also participating in the meeting were: Wendy Edelberg, Executive Director; Gary Cohen, General Counsel;
Cassidy Waskowicz, Deputy General Counsel; Gretchen Newsom, assistant to Chairman Angelides; Scott
Ganz, assistant to Vice Chairman Thomas; Courtney Mayo, assistant to the Vice Chair; and Rob Bachmann,
assistant to Chairman Angelides.
Agenda 3: Executive Directors Report
Executive Director Wendy Edelberg informed the Commission that staff are busy wrapping up Commission
operations, and that staff are also reaching out to various Congressional committees and staff members to
apprise them of the Report.
Agenda Item 4: Discussion and Vote to Establish a Process For Responding to Correspondence and
Related Requests from the House Committee on Oversight and Government Reform and from other
Congressional Committees or from Members
Chairman Angelides introduced the correspondence from Chairman Issa of the Committee on Oversight and
Government Reform. He informed the Commission that he thought it was important to provide an
opportunity for discussion of this matter and to formalize a process wherein the Chairman is granted
authority to respond to such inquiries from Congress.
Chairman Angelides informed the Commission that staff would make a good faith effort to respond to the
inquiry received, but noted that staff levels have been substantially reduced and that resources are limited. He
also noted that the Commission has approximately 400,000 emails that would need to be analyzed in regard
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to the inquiry and that all FCIC records were going to the Archives and GSA where they would be
obtainable. Chairman Angelides asked if there were any comments or concerns. Commissioners did not
raise comments or concerns.
MOTION:
Born moved and Murren seconded a motion to adopt the resolution wherein the vote
would supersede the written consent (See Attachment 1).
APPROVED: 6-0 (Vice Chairman Thomas and Commissioners Graham, Hennessey, and Wallison
were absent)
Agenda Item 5: Comments and Questions from Commissioners
Commissioner Born commended executive director Wendy Edelberg and Commission staff on their work
and extraordinary efforts.
Agenda Item 6: Other Items of Business
Wendy Edelberg noted that the FCIC website would be hosted by Stanford University in addition to the
Cyber Cemetery which has limited search capabilities.
Chairman Angelides informed the Commission that he was invited to appear before the House Financial
Services Committee on February 16th. He also noted that he has reached out to Congressional leadership to
inform them that FCIC staff are available for briefings on the Report.
Agenda Item 7: Adjournment
MOTION:
Born moved and Thompson seconded a motion to adjourn the meeting at
approximately 6:00pm.
APPROVED: 6-0 (Vice Chairman Thomas and Commissioners Graham, Hennessey, and Wallison
were absent)
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Financial Crisis Inquiry Commission
Agenda Item 4 for FCIC Business Meeting of February 9, 2011
Minutes of FCIC Meeting of
January 29, 2011
ATTACHMENT 1
APPROVED Resolution To Establish a Process for Responding to Correspondence and Other
Requests from the House of Representatives Committee on Oversight and Government Reform
and from other Congressional Committees or from Members
WHEREAS, pursuant to the Commission’s Rules, Part III, amended at the Commission Meeting of January
24, 2011, to provide that any action required or permitted to be taken by the Commission at a duly called
meeting may be taken without a meeting if a majority of the Commissioners shall consent in writing to such
action, and
WHEREAS, Darrell Issa, Chairman of the Committee on Oversight and Government Reform, Spencer
Bachus, Chairman of the Committee on Financial Services and Patrick McHenry, Chairman of the
Subcommittee on TARP, Financial Services, and Bailouts of Public and Private Programs, sent a letter dated
January 25, 2011 to the Chairman of the Commission requesting that the Commission respond to a request
for documents and information, and
WHEREAS, to assure that the Commission responds to such correspondence or other requests, or to
requests from other Congressional Committees or similar matters, the Deputy General Counsel recommends
that the Commission adopt the following resolutions:
RESOLVED, that the Commission delegates to the Chairman, working in consultation with the Executive
Director and the Deputy General Counsel, the power to review and respond to, on behalf of the Commission,
such correspondence or other requests, taking into account the limited resources available to the Commission
and after consulting with the Executive Director, Deputy General Counsel and the Commission's outside
legal advisors;
RESOLVED FURTHER, that the Commission grants to the Chairman all necessary power and authority to
act on behalf of the Commission in regards to these matters as the Chairman in the exercise of his discretion
deems advisable, and
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RESOLVED FURTHER, that the Chairman shall inform the Commissioners, from time to time, as such
correspondence or other requests are received, and the Commission's responses thereto.
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Financial Crisis Inquiry Commission
Agenda Item 6 for FCIC Business Meeting of February 9, 2011
Delegation to Execute Agreements and Contracts
on Behalf of the Financial Crisis Inquiry Commission
Resolved, it is hereby delegated to the Chairman of the Commission the authority to approve final
agreements and payments for Commission obligations and agreements on behalf of the Financial Crisis
Inquiry Commission in order to complete the work of the Commission and provide a process for the
approval of outstanding obligations and invoices submitted after February 13, 2011. This delegation is
effective until the earlier of three years from February 13, 2011, and when remaining Commission funds
are returned to the U.S. Treasury, and
Resolved further, The Chairman may delegate all over or any portion of this authority to Executive
Director Wendy Edelberg in order to expedite the orderly termination of the Commission and approval of
invoices submitted after February 13, 2011, and
Resolved further, that this delegation in no way supersedes the prior delegation of authority to the
Chairman to execute agreements and contracts on behalf of the Financial Crisis Inquiry Commission
which delegation is in effect through February 13, 2011.
4827-1803-0344, v. 1
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Financial Crisis Inquiry Commission
Agenda Item 7 for FCIC Business Meeting of February 9, 2011
Discussion and Vote on Referral to Justice – 1
Citigroup’s Purchase and Resale of Prime Mortgages: Breakdowns in Internal Controls: Potential
violation of Sections 13(b)(2) or 10(b) of the Exchange Act
During the course of the FCIC investigation of fraudulent and/or predatory practices in loan origination and
securitization, we interviewed Richard Bowen, III, a former Chief Underwriter in a division of Quality
Assurance at CitiMortgage from mid-2006 to 2007. Citigroup purchased some $40 billion a year in whole
loans, which it resold to Fannie Mae and Freddie Mac. Mr. Bowen alleges that 40-60% of the sample whole
loan files for which his group performed due diligence failed to meet the minimum contractual underwriting
criteria, but were sold to Fannie Mae or Freddie Mac nevertheless. He also alleges that his group sampled a
much smaller portion of loans than internal policy required. Mr. Bowen’s allegations, if true, may evidence
internal control violations of the securities and exchange act (section 13(b)(2)), or fraud (section 10(b)).
Although CitiMortgage had a nominal quality assurance function, it may have lacked meaningful controls to
prevent or detect fraudulent underwriting in the loans it purchased and resold to the GSEs.
Specifically, Mr. Bowen alleged that Citigroup knowingly sold Fannie Mae and Freddie Mac loans that were
not underwritten to the GSE standards and/or failed to contain necessary documentation to support the
quality of the loans. In January 2008, CitiMortgage advised Mr. Bowen that his underwriting responsibilities
had been taken away. Consequently, in April of 2008, Bowen filed a SOX whistleblower complaint, as well
as suing Citigroup for wrongful termination. He subsequently settled his complaint with the firm for
36CFR1256.56: Privacy
In addition to his FCIC interview, Mr. Bowen provided voluntary testimony to the
SEC regarding his allegations. Additionally, CitiMortgage produced related documents to the SEC which
lend support to his allegations. Citigroup performed an internal investigation relating to Mr. Bowen’s
allegations, which we have not seen. Due to limited resources and the broad scope of our mandate, we did
not follow up regarding Mr. Bowen’s specific allegations after our April 2010 hearing.
Background
CitiMortgage actively purchased and resold prime, Alt-A, and some subprime mortgages. From 2000
through February 2010, CitiMortgage purchased and sold hundreds of billions in pools of third-party
originated loans. Nearly $400 billion of these were prime mortgages that CitiMortgage purchased and resold
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as whole loans to Federal Home Loan Mortgage Company (Freddie Mac) and Federal National Mortgage
Association (Fannie Mae).
CitiMortgage did not set the underwriting standards for prime mortgages it purchased from third-party
originators to resell to the GSEs. Rather, the originators underwrote the loans to standards set by the GSEs.
The third-party originators from whom CitiMortgage purchased loans made various contractual warranties
and representations which were negotiated prior to purchase and included the right of CitiMortgage to
perform due diligence on the purchased loans. To facilitate CitiMortgage’s due diligence, the originator
would provide “loan tapes” that included hundreds of data points for each individual borrower, including
most significantly the borrower’s FICO score, income, and the loan-to-value ratio of the mortgage. If
CitiMortgage’s diligence revealed loans that did not meet the originator’s stated underwriting standards,
CitiMortgage retained the right to “kick out” the loan from the purchase pool. Moreover, if CitiMortgage
discovered at a later date that loans did not meet the originator’s contractually stated underwriting standards,
CitiMortgage typically had the right to require the originator to repurchase the loans.
Due diligence was critical to CitiMortgage’s loan pool purchase and resale business because when
CitiMortgage resold the loans, CitiMortgage made warranties and representations about the quality of the
loan pools it sold. If loans sold by CitiMortgage failed to meet its warranties and representations,
CitiMortgage could be contractually required to repurchase the loans.
As Business Chief Underwriter, Richard Bowen, III, repeatedly expressed serious concerns regarding the
quality and underwriting of CitiMortgage’s GSE sales to his direct supervisor, Owen Davis, and others in
CitiMortgage. Ultimately, on November 3, 2007, Mr. Bowen sent an email to Messrs. Robert Rubin, CEO
Chuck Prince, and other senior Citigroup executives expressing concerns about the underwriting and due
diligence surrounding CitiMortgage’s whole loan purchase and resale business.
Mr. Bowen’s Quality Assurance function was responsible for monitoring credit quality by performing due
diligence on the underwriting of a sample of the loans in a pool that CitiMortgage purchased from third-party
originators. The sample size varied by originator and type of loan, but typically was less than 2% of the
entire loan pool, which often was thousands of loans. According to Mr. Bowen, 40-60% of the sample files
for which his group performed diligence failed to meet the minimum contractual underwriting criteria of the
respective loan originator and/or had documentation missing from the files. Moreover, the 40-60% fail rate
was not accurately being reported within CitiMortgage. Rather, the purchasing desk frequently overrode
recommendations by Mr. Bowen’s group to reject certain loan pools.
Mr. Bowen told FCIC staff that when he arrived at CitiMortgage, a typical diligence sampling was less than
2% of the files in a given loan pool. Mr. Bowen repeatedly questioned the adequacy of the sampling size and
ultimately discovered that internal written CitiMortgage policy required the Quality Assurance group to
perform due diligence on a 5% sample of each loan pool. An investigation by the Business Risk and Control
Group of Citigroup confirmed that the problems identified by Bowen in 2006 had existed since about 2003.
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In late 2006, Bowen and his manager Owen Davis communicated these breakdowns of internal controls and
requested resources to better monitor, enforce policy, and restrict this process, which would have been
disruptive to the business. According to Bowen, the business continued to purchase and sell these mortgages
until late 2007, with the defect rate increasing to 80%. In November 3, 2007, Bowen notified Citigroup
executive management, including Robert Rubin, of these breakdowns of risk controls and possible financial
risk to the organization.
Personal Contact Information:
Mr. Richard Bowen
c/o Mr. Steve Kardell, Esq.
Clouse Dunn Khoshbin LLP
1201 Elm Street Suite 5200 Dallas, Texas 75270 - 2142
4833-9600-0264, v. 1
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Financial Crisis Inquiry Commission
Agenda Item 8 for FCIC Business Meeting of February 9, 2011
Discussion and Vote on Referral to Justice – 2
36CFR1256.56: Privacy
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@FedFRASER