STATEMENT OF SABEW EXECUTIVE COMMITTEE:

PHOENIX, July 28, 2010 — The Society of American Business Editors and Writers is deeply concerned about a little-noticed provision of the new financial reform legislation that could be utilized by the Securities and Exchange Commission to turn back legitimate requests for information made by the public or news organizations. Our understanding is it already has been invoked by the agency in at least one instance.
The Freedom of Information Act, which became law in 1967, has been of immeasurable aid to  public understanding of government operations – and sometimes its misdeeds. It often has obliged  government agencies to accede to public information requests even when the information placed the agencies in a bad light. The public has been served by such practices.
Respect for the act’s authority is critical to maintaining a sense of public accountability. Without that sense, for instance, the SEC itself may not have felt the need to acknowledge in detail its failures in investigating Bernard Madoff, now in prison for fleecing investors out of billions of dollars.
The new provision appears to give the SEC extensive authority to reject requests for information it has gathered in the course of investigations. It argues the agency will be better able to obtain the documents it needs to prosecute criminals if they can be kept confidential. But the blanket nature of the provision appears to extend that power far beyond the needs of a government agency that always has been able to censor the documents they are by law obliged to release, in order to protect sensitive information. Journalists have been able to construct important stories from heavily redacted government documents for decades.
Giving an agency extensive authority to ignore requests for information, as this provision suggests, would roll back 43 years of transparency in government under the Freedom of Information Act. It is particularly distressing in light of President Obama’s declaration that the new law will “increase transparency in financial dealings.” More transparency is precisely what is needed, not less. – SABEW President Rob Reuteman (freelance business reporter, Denver), Vice President Kevin Noblet (Dow Jones Newswires), Treasurer Jill Jorden Spitz (Arizona Daily Star), Secretary Beth Hunt (American City Business Journals), Martin Wolk (MSNBC.com), Lisa Gibbs (Money magazine)

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By RAY HENNESSEY, Managing Editor, FoxBusiness.com; SABEW board member

NEW YORK, July 28, 2010 — We at FoxBusiness.com reported news today that is pretty scary for all of us who hold down paychecks as business journalists, so I thought I would pass it along.

Ray Hennessey, SABEW board member

The recently passed financial regulation reform contains a provision that exempts the U.S. Securities and Exchange Commission from complying with Freedom of Information Act requests. That’s right – no more embarrassing e-mails, investigation notes, etc., a la the ones we got after Madoff and Stanford.

In fact, lawyers tell us the language is so broad that the SEC can cite the law to hold back anything. Judge for yourselves:

“(T)he Commission shall not be compelled to disclose any records or information provided to the Commission under this section, or records or information based upon or derived from such records or information, if such records or information have been obtained by the Commission for use in furtherance of the purposes of this title, including surveillance, risk assessments, or other regulatory and oversight activities.”

We at FOX Business obviously have a dog in this fight, since we sued the SEC for information and we’re the first ones they cited the new law to. (They also say they don’t plan a blanket exemption, but the law does allow one.) But I think you can see how chilling this might be for business journalists.

Here’s the web story we did. http://www.foxbusiness.com/markets/2010/07/28/sec-says-new-finreg-law-exempts-public-disclosure/