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When the same political party controls both Houses of Congress as well as

the Presidency, the duty of the minority party to be vigilant in performing its oversight function is enhanced, not diminished. When Executive Branch agencies depart -apparently at the instruction and with the approval of a Committee Chairman from a longstanding precedent of providing information to the minority party, and when that change comes during an investigation that touches upon senior Administration officials, it would be a dereliction of duty for Plaintiff to ignore his oversight responsibilities by acquiescing. Accordingly, Plaintiff has no alternative but to seek judicial intervention. The documents at issue pertain to Madison Guaranty Savings & Loan Association of Little Rock, Arkansas ("Madison Guaranty"), which was placed in conservatorship and resolved by federal regulators at a cost to United States taxpayers of approximately $67 million. As with their supervision of other failed thrift institutions such as Lincoln Savings & Loan Association of Irvine, California; Silverado Savings & Loan Association of Denver, Colorado; Centrust Savings & Loan Association of Miami, Florida; Columbia Savings & Loan Association of Beverly Hills, California; and others -Defendants' handling of Madison Guaranty has come under the scrutiny of the Committee in the performance of the Committee's oversight responsibilities.

In the oversight matters described above, Defendants provided their most sensitive documents upon request to the Ranking Minority Member of the Committee and his staff. In the present case, however, Defendants have improperly asserted numerous grounds for refusing to provide critical documents concerning Madison Guaranty. Defendants' refusal to produce these documents after numerous written

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requests by the Ranking Minority Member of the Committee with oversight responsibilities for their activities is not only unprecedented, but also contrary to law, arbitrary, capricious, and an abuse of discretion. If countenanced, Defendants' refusal to provide the requested documents would undermine the ability of Plaintiff to perform the responsibilities imposed on him by the Constitution, statutes, and House Rules.

In this action, Plaintiff seeks a declaration that Defendants' actions have volated Section 552(b) of the Freedom of Information Act, 5 U.S.C. § 552(b) ("FOIA"); have violated the Federal Home Loan Bank Act, as amended by the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, 12 U.S.C. § 1441a(k) ("FIRREA"); and are arbitrary, capricious, an abuse of discretion, and otherwise not in accordance with law, in violation of the Administrative Procedure Act, 5 U.S.C. § 706 ("APA"). In addition, Plaintiff seeks an order requiring that Defendants immediately produce the requested documents.

BACKGROUND

RTC, OTS, and Madison Guaranty

Defendant RTC is charged by statute with managing and resolving all

cases involving depository institutions insured by the Federal Savings & Loan Insurance Corporation for which a conservator or receiver was appointed between 1989 and 1995. One of those institutions is Madison Guaranty, which was placed in conservatorship by federal regulators in March 1989 and resolved by the RTC in November 1990.

Defendant OTS is charged by statute with providing for the examination, safe and sound operation, and regulation of savings associations. One of the savings

associations regulated by the predecessor of Defendant OTS (the Federal Home Loan Bank Board) was Madison Guaranty. By admission of their most senior officials, both the RTC and the OTS have in their possession, custody, or control nonpublic

As early as 1984, federal regulators noted severe problems with Madison Guaranty's management and financial condition, but Arkansas state regulators who ther had supervisory authority over Madison Guaranty took no action. As a consequence, Madison continued its questionable practices, and grew from a $49 million thrift in 1984 to a $125 million institution in 1986, with a consequential increase in exposure to United States taxpayers. From the time Madison Guaranty was placed in conservatorship to date, its insolvency has cost United States taxpayers approximately $67 million.

A number of questions have been raised by state and federal regulatory authorities, the media, and Congress concerning the practices of James and Susan McDougal, who controlled Madison Guaranty from approximately 1980 to 1986. Additional questions have been raised concerning the propriety of certain extensions of credit to persons closely affiliated with Madison Guaranty or its subsidiaries; the diversion of funds from Madison Guaranty for political and other illegal purposes; regulatory delays in closing Madison Guaranty; potential conflicts of interest in the representation of the Federal Deposit Insurance Corporation by the Rose Law Firm of Little Rock, Arkansas in a suit against Madison Guaranty's accountants, Frost & Company; and other matters that fall squarely within the oversight obligations of Plainti and the Committee. (Declaration of Joseph L. Seidel ("Seidel Decl.") ¶ 4.) ̄

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Plaintiff's Oversight Responsibilities

Plaintiff's oversight obligations with regard to Defendants are not

controvertible. They are implicit in Article I of the Constitution, see U.S. Const. art. I § 1 ("All legislative powers herein granted shall be vested in a Congress of the United States...."), and it has long been established that the power to investigate extends as far as the power to legislate. See Watkins v. United States, 354 U.S. 178, 187 (1957); McGrain v. Daugherty, 273 U.S. 135, 160-167 (1927); Kilbourn v. Thompson, 103 U.S. 168 (1881). See also H.Res. No. 394 (referring to Congress' "Constitutional obligation to conduct oversight of matters relating to the operations of the government.").

In addition, those obligations are set out explicitly in Rule X(2)(b)(1) of the

United States House of Representatives, which states:

"Each standing committee... shall review and study, on a
continuing basis, the application, administration, execution,
and effectiveness of those laws, or parts of laws, the subject
matter of which is within the jurisdiction of that committee and
the organization and operation of the Federal agencies and
entities having responsibilities in or for the administration
and execution thereof, in order to determine whether such
laws and the programs thereunder are being implemented
and carried out in accordance with the intent of the Congress
and whether such programs should be continued, curtailed or
eliminated. In addition, each such committee shall review
and study any conditions or circumstances which may indi-
cate the necessity or desirability of enacting new or additional
legislation within the jurisdiction of that committee (whether or
not any bill or resolution has been introduced with respect
thereto), and shall on a continuing basis undertake future
research and forecasting on matters within the jurisdiction of
that committee. . ."

Rule X gives effect to the broad oversight responsibilities set out in the Legislative
Reorganization Act of 1970, 2 U.S.C. § 190d (the "LRA").

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associations regulated by the predecessor of Defendant OTS (the Federal Home Loan Bank Board) was Madison Guaranty. By admission of their most senior officials, both

the RTC and the OTS have in their possession, custody, or control nonpublic

As early as 1984, federal regulators noted severe problems with Madison Guaranty's management and financial condition, but Arkansas state regulators who then had supervisory authority over Madison Guaranty took no action. As a consequence, Madison continued its questionable practices, and grew from a $49 million thrift in 1984 to a $125 million institution in 1986, with a consequential increase in exposure to United States taxpayers. From the time Madison Guaranty was placed in conservatorship to date, its insolvency has cost United States taxpayers approximately $67 million.

A number of questions have been raised by state and federal regulatory authorities, the media, and Congress concerning the practices of James and Susan McDougal, who controlled Madison Guaranty from approximately 1980 to 1986. Additional questions have been raised concerning the propriety of certain extensions of credit to persons closely affiliated with Madison Guaranty or its subsidiaries; the diversion of funds from Madison Guaranty for political and other illegal purposes; regulatory delays in closing Madison Guaranty; potential conflicts of interest in the representation of the Federal Deposit Insurance Corporation by the Rose Law Firm of Little Rock, Arkansas in a suit against Madison Guaranty's accountants, Frost & Company; and other matters that fall squarely within the oversight obligations of Plaintiff and the Committee. (Declaration of Joseph L. Seidel ("Seidel Decl.") ¶ 4.)