Federal Court Orders Treasury Department To Release Emails Concerning 2009 Government Bailout of General Motors and Chrysler

A federal judge for the District of Columbia yesterday issued a 45- page decision in a Freedom of Information Act case brought by us on behalf of the Center for Auto Safety rejecting the Treasury Department’s claims for withholding hundreds of emails between members of the Presidential Task Force on the Auto Industry concerning the 2009 government bailout of GM and Chrysler.  The government provided more than $ 80 billion in taxpayer bailout money when the giant auto makers teetered on the brink of bankruptcy due to a downturn in the economy and pervasive mismanagement.  Even before the bailouts were finally approved, the Center for Auto Safety sought access to email exchanges between members of the Task Force and the auto manufacturers in an attempt to shed light on why the federal government was allowing the companies to restructure in a way that insulated them from being liable to consumers with certain defective GM and Chrysler cars.  The Obama Treasury Department mounted every barrier to open government to prevent the Center from obtaining access to the documents – it delayed responding to its request for months, then refused to provide the venerable public advocacy group a public interest fee waiver for the documents, forcing the Center to file a lawsuit simply to compel the agency to process its request.  After we filed our opening brief on the fee waiver issue, Treasury relented and agreed to provide a waiver of the almost $40,000 it had requested from the Center.  GM then intervened in the case, and it has taken years to obtain hundreds of responsive documents and to litigate over the remaining hundreds of emails that the agency  has refused to release.  In her opinion yesterday, Judge Beryl Howell rejected almost all of the government’s argument for nondisclosure – including its claim that release of the information would “impair” the government’s ability to obtain similar information in the future.   Adopting our argument, the Judge stated that “[i]t strains credulity to believe that the specter of potential disclosure under FOIA of certain information required to be submitted to Treasury to obtain a company-saving loan would lead a company to choose instead to go out of business,” noting that “[t]here is abundant evidence in the record that GM and Chrysler had to take the government’s bailout or go bankrupt.”   The Court also completely rejected Treasury’s argument that it could withhold any emails concerning the “old” companies’ assets and liabilities and ordered the immediate disclosure of such information.  As to the remaining information at issue, the Court found that neither Treasury nor GM had sustained their burden of proof that the release of any such information was likely to cause the companies “substantial competitive injury” as required by Exemption 4 upon which they relied, particularly when the Center has shown that much of the information is old and outdated, and that the strategy and negotiations employed by the Auto Task Force in restructuring the two companies had already been detailed in a 2010 book by Steven Rattner – the head of the Auto Task Force – called “Overhaul:  An Insider’s Account of the Obama Administration’s Emergency Rescue of the Auto Industry.”  The Court is providing the government and GM one last chance to show how, consistent with her opinion, disclosure of the remaining information atissue could cause either the “new” GM or Chrysler “substantial competitive injury.” A copy of the decision can be found here.