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RTC

RESOLUTION TRUST CORPORATION

Resolving The Crisis
Restoring The Confidence

May 2, 1994

Honorable James A. Leach
Ranking Minority Member
Committee on Banking, Finance

and Urban Affairs

House of Representatives
Washington, D.C. 20515

Re: Freedom of Information Act Appeal No. RTC-94-1014

Dear Mr. Leach:

This is in response to your letter of April 11, 1994, appealing the Resolution Trust Corporation's response dated March 11, 1994, to your request for information related to Madison Guaranty Savings & Loan Association. While your initial request for information, dated December 9, 1993, was opened as a request made through our office of Governmental Relations and not a request made pursuant to the Freedom of Information Act (FOIA), 5 U.S.C. S 552, because of your status as an individual Member of Congress, you were afforded no greater access than would have been afforded the general public under the FOIA. In your letter dated March 7, 1994, you specifically requested information regarding what "further recourse" was available to you within the agency to obtain access to the information you sought. The RTC responded in its letter of March 11, 1994, by explaining the RTC's FOIA appeal process.

Consequently, we are treating your letter dated April 11, 1994, to be an appeal, pursuant to the FOIA, of our previous responses to your requests for records.

Scope of Request

By letter dated December 9, 1993, you requested "all documents related to Madison and its subsidiaries." Your request went on to state that:

Such documents would include, but not be limited to,
administrative files, examination reports, interoffice
memorandum (sic), notes and minutes of meetings
(including telephonic meetings), correspondence,
electronic mail and agreements the RTC entered into

801 17th Street, NW. Washington, DC. 20434

Honorable James A. Leach

Page 2

with private sector contractors during the resolution
of Madison. In addition to documents in possession at
RTC-Washington, I request access to all documents
related to Madison held at RTC field offices.

We interpreted this request to include all records created by the RTC and records in possession of the institution at the time it was put into receivership and still in the possession of the RTC. Because your initial request encompassed approximately 500 boxes of records, the RTC supplied your staff with a number of inventories pertaining to records of the RTC which relate to Madison Guaranty and Madison Financial Corporation. In an effort to expedite your request and avoid supplying you with information in which you had little or no interest, we asked your staff to utilize the inventories and indicate which records were being sought.

In the ensuing discussions, your staff identified certain categories of records which they specifically requested. During other discussions with your staff, certain general categories of records were indicated as being of interest. As a result of these discussions, the RTC reviewed the appropriateness of disclosing the requested categories or specific files of information. Access to certain of these categories was denied, while access was granted in whole or in part to other categories. A substantial number of records were not specifically requested by your staff and accordingly were not addressed. As a courtesy, we have supplied your staff with copies of any Madison-related record processed pursuant to any other FOIA request, even though your staff did not indicate any special interest in that record. As a result of this procedure, the RTC has disclosed over 8,000 pages of information to your staff, and it has placed copies of that information in the RTC's Reading Room for public access. For your convenience, we have enclosed another copy of the inventory of Madison related records. (Attachment A)

Based on our previous dialogue with your staff, and noting the categories or specific files they requested, we have interpreted your request and your appeal to be limited to the following categories of information which were specified by your staff or were supplied to your staff as a result of processing other FOIA requests. As indicated below, you were denied access to certain categories of these records in whole or in part. These denials, in addition to your claim to absolute access by virtue of your status as a Member of the Congress, are the subject of your appeal.

1. Investigatory files pertaining to the RTC's investigation of Madison, Professional Liability Section (PLS) litigation files pertaining to Madison, and any criminal referrals or correspondence with the Department of Justice pertaining to Madison. [Access was denied because to disclose this information could reasonably be expected to interfere with an enforcement proceeding.]

Honorable Janes A. Leach
Page 3

2. Loan or personal banking records pertaining to individuals or corporations/partnerships. [Access was denied because to disclose this information would constitute a clearly unwarranted intrusion into an individual's personal privacy or would reveal confidential commercial or financial information. This category includes requests for financial records which may relate to specific individuals or corporations and to portions of certain inventories of documents and assets which have been supplied to your staff--e.g., no. 622 on the attached inventory.]

3. Minutes of Madison Guaranty. [Portions were withheld because to disclose this information would constitute a clearly unwarranted intrusion into an individual's personal privacy or would reveal confidential commercial or financial information.] 4. Minutes of Madison's subsidiary, Madison Financial Corporation. [Access was denied because to disclose this information could reasonably be expected to interfere with an enforcement proceeding.]

5. Resolution documents pertaining to Madison. [Access granted in their entirety.]

[On

6. Documents in Legal files located in Kansas City. December 30th your staff was given a copy of the Kansas City RLIS (RTC Legal Information System) printout and then requested access to 18 files, portions of which were withheld as privileged. addition, seven itens on the printout were redacted as privileged.')

In

[Access

7. Congressional correspondence pertaining to Madison. to portions were withheld to protect the identity of the constituents, the disclosure of which would constitute a clearly unwarranted intrusion of their personal privacy.]

8. Gerrish Report. [Access was denied because this document is protected under the attorney-client privilege, and to disclose this document could reasonably be expected to interfere with an enforcement proceeding.]

9.

Contract information. [On December 30th, your staff selected certain contracts off of the RTC's Kansas City CARS (Contracting Activity Reporting System) and those contracts were disclosed in their entirety.]

10. Bidders Information Package. [Document no. 67 on the attached inventory. Access to salaries of Madison employees was denied, the disclosure of which would constitute a clearly unwarranted intrusion of their personal privacy. Access to

is

1 Upon review, we have determined that this information is no longer privileged. Accordingly, attached. (Attachment B)

a

supplemental release

Honorable James A. Leach

Page 4

portions which identified certain depositors was also denied because to disclose this information would reveal confidential commercial or financial information.']

11. Bank Board Examination Reports of Madison. [These reports were denied because they related to reports prepared by a financial institution regulatory agency which requested they be withheld.]

If you are interested in obtaining access to types of documents other than those listed above or which have been disclosed to you previously, please refer to the inventories which have been supplied to your staff and contact the FOIA/PA Branch, International Place, 1735 North Lynn Street, Rossyln, Virginia 22209.

Access by Individual Members of the Congress

In your letter dated March 7, 1994, you indicated that based upon your status as an individual Member of Congress you are entitled to total access to all records under the control of the agency, notwithstanding the fact that the records may be privileged, protected by the Privacy Act, or protected by the Trade Secrets Act. In effect, you disputed our position that you were entitled only to the same access as would be afforded to a member of the general public pursuant to the FOIA. Previously, on January 14, 1994, your staff submitted a memorandum which concluded that as Ranking Minority Member, you appeared to "have the appropriate institutional status to obtain records within the Committee's jurisdiction upon request and without limitation." See Memorandum to Representative Janes A. Leach, from the Minority Staff, subject "Rights of a Ranking Minority Member for Access to Agency Records," January 14, 1993 (sic) (hereafter referred to as the Minority Staff "Opinion"), at 1. Your staff came to this conclusion based on their assertion that a Ranking Minority Member has all the rights of a Committee and that subsection (d) of the FOIA, 552 U.S.c. § 552(d), precludes the invocation of FOIA exemptions to withhold records from you.

We have reviewed this memorandum and the relevant case law and have concluded you are only entitled to the same access as would be available to any member of the general public under the FOIA. Furthermore, we have concluded that as long as your status is that of an individual Member of Congress, we would be prohibited from disclosing information potentially covered by the Privacy Act and the Trade Secrets Act. Moreover, we believe that disclosing privileged information to you could raise questions of

2

Access to portions which identified parties who sold Madison a participation interest was also denied. Upon review, we have determined this information may be disclosed. Accordingly, a onepage supplemental release is attached. (Attachment C)

Honorable James A. Leach
Page 5

waiver and could detrimentally affect any further legal action that may be contemplated regarding Madison. In sum, we have concluded that the RTC may appropriately withhold information from you pursuant to FOIA exemptions.

COMMITTEE STATUS

The Minority Staff's Opinion that as Ranking Minority Member you have authority commensurate with that of a Committee is based on four arguments: (1) the position stated in an Amicus Curias Brief submitted by the Speaker and Bipartisan leadership Group of the House of Representatives in the matter of United States v. McDade, Crim. Action No. 92-249 (E.D. Pa.); (2) Congress has the right to investigate and the majority should not suppress the minority's efforts in this area; (3) various rules of the House and the Banking Committee grant you independent investigatory authority commensurate to that of the Banking Committee; and (4) there is sufficient "institutional imprimatur" to afford your effort Committee status.

We have reviewed the brief and opinion filed in the United States v. McDade, and we do not consider your staff's reliance upon the statement made in the Amicus Brief that the Ranking Minority Member is "the functional counterpart of the Chairman" to be on point. Nothing in the brief or the Court's written opinion on the case addresses the issue of a Member's right of access to agency information, nor do they infer that a Ranking Minority Member has all the authority of a Committee. The characterization of the Ranking Member as the "functional counterpart of the Chairman" is in terms of preparing the minority's proposed legislation and amendments to the majority's proposals, and managing the minority staff, etc., and not in terms of the authority of the individual Member to compel access to information from agencies. This very narrow characterization is for a particular purpose and has been taken entirely out of context.

As to your staff's assertion that the rules of the House and the Banking Committee support your independent status, all of the references simply prove that the minority can participate in the legislative process. The Opinion does not cite case law or a specific legislative rule that grants the Ranking Minority Meaber Committee status or the independent authority to compel the production of documents. This is in stark contrast to the Banking Committee's own rules on the issuance of subpoenas (which normally does form a basis to compel production of documents), which may be authorized only by a majority of the members voting, a majority being present, and not solely by the Ranking Minority Menbar. See House Banking Rule II.3.

Congress' right to investigate matters related to alleged waste and fraud is not in dispute. The real issue is whether the Ranking Minority Member, on the authority of that position

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