Fannie Mae: Is the Butler Gonna Claim Privilege Next? by Todd Sullivan, Value Plays
UPDATE AT END
So it seems as though everyone in Washington was involved in the drafting and implementation of the 3rd amendment (NWS) to Fannie Mae and Freddie Mac’s conservatorship . Want proof?
Attached is Fairholme’s filing challenging the government’s designation of certain documents as “protected”(and by “certain” I mean “every single one”).
Go to appendix A,B,C and you’ll note there are 62 pages.
The usual names are there, Obama, Geithner, DeMarco, Ugoletti, Lockhart, Miller, DeLeo, Mudd, Deese, Bowler, Stegman etc….
After that the scope of the number of people involved is staggering (all of them are also claiming privilege). One has to assuredly wander down into the bowels of Treasury/FHFA to find out who these folks are. It is becoming far clearer now why Treasury is stonewalling and desperately trying to limit information and access. There is no conceivable way all these folks give the same narrative under deposition. No way…… once holes in stories start to appear, things unravel pretty quickly.
Peter Chapman opines:
Cutting through the parties’ gamesmanship — which refers to both the Government and Fairholme — we now have a copy of the Government’s Privilege Log dated Jan. 16, 2015 (reproduced at pp. 61 through 81 of the attached document). I would anticipate that Fairholme wants to depose virtually every person named in the privilege log about what they knew and what they perceived as the Third Amendment was crafted, deliberated, evaluated, presented to FHFA, negotiated, revised, and finally executed. I’m personally surprised by how many people were involved and how many documents actually exist.
The government has filed its response (below). I’d say it is 70/30 they win this motion. Fairholme got accomplished with this what it wanted to. They let anyone interested know who is trying to claim their information is protected and the sheer vastness of the scope of this. Don’t think for a second people in Congress aren’t taking notice about this and will begin asking questions. The government is basically saying “we are eventually going to do all this anyway so don’t make us go back and do it now”.
They are also peeved at Fairholme for releasing earlier rounds of documents but oddly are not complaining about the 62 pages of them included in the motion.
At the end of the day this motion is not a big deal as far as who wins, Fairholme got what it wanted out in the public domain.
Fannie Mae: Government Response
Defendant’s Response To Plaintiffs’ Motion To Remove The “Protected Information” Designation From Defendant’s Provisional Privilege Logs
The Court should deny the motion by Fairholme Funds, Inc. (Fairholme) to remove the “Protected Information” designation from provisional privilege logs produced by the United States.1 The provisional privilege logs contain confidential information meeting the definition of “Protected Information” under the protective order. Moreover, the provisional logs represent the Government’s preliminary judgments about privilege claims and were provided to plaintiffs as an accommodation and in the interests of expediting the discovery process. The logs have changed from week to week as the Government continues reviewing documents initially identified as potentially privileged. Thus, many of the entries are now obsolete and inaccurate.
Fairholme cannot articulate any legitimate, litigation-related rationale for the relief it seeks where (1) Fairholme counsel has access to the provisional logs under the protective order, and (2) the Government intends to produce a public version of the final privilege log. There is no legitimate justification or proper purpose for permitting Fairholme to publicize provisional logs containing preliminary and now obsolete information. For these reasons, Fairholme’s motion is not only without merit, but is also a waste of the Court’s and the parties’ time.
Background
After the Government filed its motion to dismiss Fairholme’s complaint pursuant to Rules 12(b)(1) and 12(b)(6) of the Rules of the Court of Federal Claims (RCFC), Fairholme requested limited, jurisdictional discovery regarding three issues for the purpose of responding to the Government’s motion. The Court granted Fairholme’s request. To date, the Government has produced over 600,000 pages of documents, and the parties have completed two depositions.
To facilitate the production of documents, the Court issued a protective order on July 16, 2014. Prot. Order (July 16, 2014), ECF No. 73. The protective order defines “Protected Information” to include any “proprietary, confidential, trade secret, or market-sensitive information, as well as information that is otherwise protected from public disclosure under applicable law.” Id. ¶ 2. The protective order also incorporates a process for a receiving party to challenge the designation of materials as “Protected Information.” Significantly, the receiving party bears the burden of showing that the designation was improper. Id. ¶ 17.
See full PDF below.
