Thursday, March 8, 2012

MF Global - CFTC Disrespects My FOIA

On January 23, 2012, I sent a Freedom of Information Act (FOIA) request to the CFTC. I told them I wanted to know how the CFTC made the decision to liquidate MF Global Inc as a "SIPA liquidation".

This decision was made by the CFTC in a very short time, after MF Global informed regulators of missing money. CFTC considered the alternatives for less than 1 day. The decision set into motion a chain of events which may have profound implications for MF Global customers.

The process is pretty simple.

Following the FOIA rules, I faxed my FOIA request on the evening of Jan 23.

The FOIA law 5USC§552(a)(6)(A)(i) says that the CFTC has 20 work days to respond with a determination, telling me what information is available, whether they can deliver it, and what it will cost me. I expected that they would make some excuse, responding perhaps that there was no written record of any meetings, memos, etc on the subject.

What actually happened next was much more interesting: Silence.

The 20 day statutory limit expired on February 21, 2012, and the CFTC didn't respond at all!

The CFTC has an official email address and phone number to get status of FOIA requests. I tried sending email. No response. Tried again a few days later. No response. I tried calling. Got voicemail every time. Left 4 messages asking for status of my FOIA request over several days. No response. Nothing.

They don't answer email. They don't answer the phone. They don't respond to voicemail.

It was as if the CFTC's FOIA office doesn't really want to give anyone the status of anything.

Next I called a CFTC lawyer assigned to the FOIA office. Calling his number got me to voicemail again, but he was nice enough to call me back the next morning and leave me a voicemail message.

His message asked me to "be patient" and explained that these matters were "very complex".

That's an interesting response, but it doesn't come close to being compliant with the law. It doesn't tell me when the CFTC might comply with the law. Doesn't really tell me anything.

Rather than saying "no", the CFTC decided not to answer at all. A brilliant bureaucratic strategy! Do nothing. Hide.

You'd think that in a high profile case, like the MF Global affair, the CFTC would take great care to be compliant with the law. You would be wrong. I'm sure they employ people whose only job is to monitor their compliance and keep them on track. We pay these folks' salary.

I don't buy the complexity argument. My request was straightforward. Even if the CFTC were delayed for a legitimate reason, the statute requires a written response within a precisely defined time, and they haven't responded at all. Just non-compliant.

The statute does allow the time limit to be extended, but that is allowed only in certain specific situations, and would require written notice, which the CFTC has not bothered to give. Just plain ol' non-compliance.


Just to be formal, I've sent them a letter documenting their noncompliance, which I've copied below.

When they finally do say something, I'll share that with you too.

FOIA Compliance Office
Commodity Futures Trading Commission
Three Lafayette Centre
1155 21st Street, NW
Washington, DC 20581

March 8, 2012

FOIA Compliance Officer:

On January 23, 2012, I faxed a FOIA request to the CFTC, which you subsequently identified as 12-00055-FOIA.

Because you have not notified me of a determination, you have been in violation of 5USC§552(a)(6)(A)(i) continuously since February 21, 2012.

The statute requires the CFTC to reach a determination within 20 work days after receipt of a FOIA request, and to then notify me “immediately”. It appears that you have done neither.

I expect that you will correct this noncompliance promptly.

Thank you,

Xxxxxx Xxxxxx
xxxx Xxx Xxxxxx
Xxxxxx, XX xxxxx

Cc: Edwin J. Yoshimura, CFTC FOIA counsel, CFTC Chicago

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