The New York Times published an article last December investigating the U.S. government’s approval of American companies doing business with countries blacklisted for sponsoring terrorism, such as Iran. According to the article, the Treasury Department has granted almost 10,000 licenses for business deals involving these blacklisted nations, some of which were impacted by political influence.

In addition to good reporting, the availability of data was essential to making this such a good investigative piece. That said, much of the underlying data for this article was hard to obtain, and the article itself says that even after the Times filed a FOIA request, “The process took three years, and the government heavily redacted many documents. . . ”

We investigated and have highlighted what data is publicly available and what data isn’t, but in some cases can be obtained through FOIA.

Publicly Available Data

The article highlights how much less business the United States did with Iran than China or Europe did, pointing out that “…in the first quarter of this year, 0.02 percent of American exports went to Iran.” The U.S. Census Bureau provides monthly and annual datasets detailing American foreign trade which provides information such as the data point used in the article. The annual report for 2010 is available here and can be viewed as a PDF or as a zip file for text or excel formats.

The article demonstrates how American exports to Iran have dramatically increased since the passage of legislation in 2000 exempting agricultural and medical humanitarian aid from trade sanctions, explaining that, “While Cuba was the primary focus of the initial legislative push, Iran, with its relative wealth and large population, was also a promising prospect. American exports, virtually nonexistent before the law’s passage, have totaled more than $1.7 billion since." The U.S. Census Bureau also provides data regarding U.S. foreign trade that is organized by country and year. The website provides a downloadable excel document with comprehensive data for all countries and years. The data for U.S. trade with Iran is located here.

The article suggests a connection between licenses granted that allow companies to trade with blacklisted countries and campaign donations, relating that, “While his electrodes were at sea, Mr. Liu had made his first ever political contribution, giving the senator’s campaign $2,000…Two months later, Mr. Liu sent the senator another $2,000 contribution, the maximum allowable.” Campaign donations are public information. Using Sunlight's Transparency Data you can find campaign contributions based on who gave, when they gave, and how much they gave. A search for Samuel Liu’s contributions between 2003-2004 immediately brings up his $2,000 campaign donations to Senator Inouye: one in August of 2003 and the other in February of 2004.

Information Not Made Available to the Public

Much of the data in the article is based on Treasury Department records providing the details of individual licenses granted to companies. To try to find the data we ran a search based on the terms "mccormick" "OFAC" and site:treasury.gov, to limit the search to within the Treasury website. We were able to find heavily redacted lists of licenses granted from the Office of Foreign Assets Control (OFAC) under the Department of the Treasury. The spreadsheets provide the names of companies which have received licenses from OFAC, but do not provide substantive details about the reason for the license, or the amount or type of purchases made. We also found blank reporting and license applications, but not the completed applications from individual companies.

The Treasury Department did not return numerous messages left requesting additional insight into what information is and is not publicly available. More specific information may be available through individual FOIA requests, several of which are currently pending according to FOIA logs provided by Treasury. Based on how little information the Treasury provides online regarding this topic, it is likely that most of the following claims in the article are based on information obtained through FOIA, or just good investigative skills:

• “…the Treasury Department has granted nearly 10,000 licenses for deals involving countries that have been cast into economic purgatory…”
• “…records show that the United States has approved the sale of luxury food items to chain stores owned by blacklisted banks…”
• “In its application to sell salt substitutes, marinades, food colorings and cake sprinkles in Iran, McCormick & Co. listed a number of chain stores that planned to buy its products.”
• “On July 28, 2003, the plant’s owner, Samuel Liu, ordered 200 graphite electrodes from a Chinese government-owned company, China Precision Machinery Import Export Corporation.”
• “Records show that the bank had agreed to confirm a letter of credit guaranteeing payment to a Malaysian exporter upon delivery of what were described as split-system air-conditioners to a Turkish importer.”

• “Records show that an Inouye aide called the licensing office on Mr. Liu’s behalf the same day that Mr. Palmiero recommended denying the application. The senator himself wrote two days later.”
• “The following day, the licensing office’s director at the time asked the State Department to reconsider in an e-mail that prominently noted the senator’s interest.”

"The News Without Transparency" shows you what the news would look like without public access to information. Laws and regulations that force the government to make the data it has publicly available are absolutely vital, along with services that take that raw data and make it easy for reporters to write sentences like the ones we've redacted in the piece above. If you have an article you'd like us to put through the redaction machine, please send us an email at mbuck@sunlightfoundation.com.

Yet another member of Congress has been found pushing the Treasury Department for TARP funds despite having a long-standing relationship with that bank. One year ago, Rep. Luis Gutierrez wrote to Treasury urging them to consider bailing out the Puerto Rico-based Banco Popular labeling it a special and urgent case. This was without revealing that Gutierrez had received tens of thousands of campaign contributions from bank executives over the years and that his wife worked as senior vice president from 2005 to 2007 until she was abruptly fired. The Hill has the full story:

The financial crisis erupted last fall, and Popular recorded a $700 million loss in the fourth quarter alone. The firm had an annual loss of $1.2 billion in 2008.

In October 2008, the bank sent letters to several lawmakers, including Gutierrez, “to ensure participation” in TARP, said Teruca Rullan, senior vice president of corporate communications at Popular. “Communicating directly with members of the U.S. Congress was a prelude to secure capital in this historic financial juncture,” she wrote in an e-mail to The Hill.

Popular was no stranger to Washington’s ways. Gutierrez received close to $15,000 in campaign contributions since 1997 from the bank’s executives, according to the Center for Responsive Politics. The last donation came in 2004.

Apart from the contributions to Gutierrez, bank officials have given more than $113,000 to both Democratic and Republican lawmakers since 1989, according to the center.

As the bank grew, it also hired some of the most prominent firms on K Street, spending close to  $2.9 million on lobbying since 2003.

Not sure what I think about this, but former TARP czar Neil Kashkari, appointed under President Bush, told the TARP Inspector General that he thought that the lobbying rules announced earlier this year for TARP recipients were political in nature. The lobbying rules have yet to be fully written and implemented, but are expected to closely track those imposed on lobbyists seeking stimulus funding. It appears that this is simply Kashkari's opinion on the rules and not any admittance of fact.

The Washington Times reports the statement by Kashkari in a way that makes it seem that he is revealing something more than his own opinion. (This makes me think of this great post by Michael Scherer at the Time Magazine blog on the media's obsession with simulacrum.) That being said, Kashkari's opinion on the rules does raise questions considering the Treasury Department has yet to announce a full set of rules for lobbyists and has yet to implement them nearly eight months after announcing them.

Considering that the administration also announced rules for the stimulus spending that were met with intense opposition from lobbyist groups, the likelihood that these rules were announced solely for political purposes seems doubtful. What I'm really wondering is: why has the Treasury Department slow-walked the implementation of lobbying rules and who is behind that?

But this is his bank, so it is his problem.

Sen. Daniel Inouye pressured the Treasury Department and the FDIC to approve a bailout contract with Central Pacific Financial, a bank Inouye founded and where he held most of his wealth. The bank was also in trouble with the FDIC and did not appear to meet criteria for bailout funds:

The bank, Central Pacific Financial, was an unlikely candidate for a program designed by the Treasury Department to bolster healthy banks. The firm's losses were depleting its capital reserves. Its primary regulator, the Federal Deposit Insurance Corp., already had decided that it didn't meet the criteria for receiving a favorable recommendation and had forwarded the application to a council that reviewed marginal cases, according to agency documents.

Two weeks after the inquiry from Inouye's office, Central Pacific announced that the Treasury would inject $135 million.

...

The bank faced long odds. More than 1,600 banks submitted applications to the FDIC in the three months after the program was announced, according to a report by the FDIC's inspector general's office. The agency forwarded 408 applications to Treasury, which approved only 267, or roughly 16 percent of the total.

Central Pacific's situation was even bleaker because it was in trouble with the FDIC. Regulators had raised concerns about the bank earlier in the year. The bank would soon sign an agreement with its state regulator and the FDIC requiring it to raise an additional $40 million in capital and to improve its management practices.

Also, why does it seem that all senators who've been in office for 30 or 40 years act like they can do whatever they want.

Yesterday, John Wonderlich wrote an important post here about Sunlight's meeting with the White House (with a bunch of other organizations) regarding the stimulus lobbying rules. The most important thing that John wrote is this:

To me, this looks like an imperfect law (the Lobbying Disclosure Act) being used as a foundation for imperfect lobbying restrictions, in the face of enormous and unprecedented stimulus spending. Whether the restrictions are proportional to the sudden need for competent spending is certainly up for debate. There seems to be little debate, however over whether the LDA is a sufficient vehicle for lobbying regulation. It isn’t. The LDA requirements are easily skirted, enforcement is lax, and many terms are insufficiently defined. (It’s probably fair to say that position was the consensus of the groups present, but certainly not presented as administration policy.)

Stress-test results showing major banks need to raise new capital were finalized after intense negotiation between the government and the banks, Treasury Secretary Tim Geithner told Charlie Rose in an interview taped on Wednesday.

The LDA does not cover many paid influencers that go to executive branch agencies or Capitol Hill, does not require the disclosure of contacts, and has loose and diffuse enforcement mechanisms. As the debate over influence increases in Washington, there will likely be a need to revisit this Act and consider many of the proposals that were left on the cutting room floor when the bill was adopted in 1995. Proposals that were dropped included disclosure of contacts, widened registration net, and better, more professional enforcement and oversight. It's about time to consider these ideas, as they appear to be the real meat for real reform.

One way that transparency can directly affect outcomes is when information is released in ways that preempt bad decisions. In the case of the federal bailouts, the possibility of transparency averting the impolitic decisions of bonuses and bogus assertions seems particularly acute. Transparency could also help consumers by providing information prior to and during a decision-making process, like purchasing a home. I thought this quote from Timothy Day, vice president of government affairs with data analytics firm Teradata, in this NextGov post summed it up pretty well:

"If a bank had shown more information [last year] as it relates to their mortgages, people making $100,000 salaries would not be getting $500,000 mortgages," he said. "The government is never really going to have true transparency and true accountability unless there is more data in a centralized database."

Since the passage of the Emergency Economic Stabilization Act of 2008 authorized the $700 billion bailout of the financial sector there has been a consistent refrain from critics that the program is shrouded in secrecy and only nods and winks at the notion of transparency. Just see my colleague Anupama Narayanswamy's attempts to figure out who is running the program -- known as the Troubled Asset Relief Program (TARP).

A trio of senators are trying to change that by mandating a bit of transparency for the TARP program. Sens. Mark Warner, Mel Martinez, and Sherrod Brown introduced the TARP Transparency Act today. Here's the details:

The TARP Transparency Act directs the U.S. Department of the Treasury to more aggressively compile and disclose how TARP funds have been used – information that currently is submitted in a variety of formats to several federal agencies – for review by the TARP Inspector General, the Congressional Oversight Panel and the public.

The TARP Transparency Act will allow regulators and Congress to use a single database, in a standardized format, to provide a more complete picture of the actions of TARP fund recipients and contractors.  The information could be collected and disseminated in near real-time, enhancing its value as a regulatory audit tool and also as a preventative oversight tool.

You can read the actual bill text on Sen. Warner's blog (where he uses Scribd to embed a pdf of the bill).

If ever we saw the fruits, and possibilities, of disclosure and transparency, it is in this New York Times profile of Treasury Secretary Timothy Geithner. The article is based largely off of the Freedom of Information Act (FOIA) release of Geithner's 2007-2008 schedule when he served as president of the New York Federal Reserve Bank. The 658-page schedule is a monument, not only to the FOIA system (and to the new "presumption towards disclosure" ordered by President Obama and AG Holder), but also to what active disclosure could look like. Imagine these records released as the meetings were happening.

While the schedule rarely explains the contents of the meetings, the running list of financial titans tells its own story. As Joseph Stiglitz explains in the Times article:

“I don’t think that Tim Geithner was motivated by anything other than concern to get the financial system working again,” Mr. Stiglitz said. “But I think that mindsets can be shaped by people you associate with, and you come to think that what’s good for Wall Street is good for America.”

In Washington, the disclosure of these kinds of contacts would also be vitally important, not only for public consumption but for the awareness of lawmakers. If we were allowed to see the schedules of contacts made by lobbyists and influencers, stories like these -- pulling back the curtain -- would proliferate. Imagine every contact by a registered lobbyist or influencer to a congressional office and executive branch agency reported into a database, made into a schedule, and made available online.

This kind of transparency would alter the way the public sees politics in Washington. It would also provide lawmakers and others an important view into the pressure tactics of interest groups and lobbyists, something that they ought to be privvy to, to help make better decisions in their representative capacity. The more real-time disclosure we have the more likely stories like the Geithner profile will be able to come out while decisions are being made and not through when we are looking through the rear-view mirror.

Yesterday, the House followed the Senate by passing a bill to provide the Special Inspector General for the Troubled Assets Relief Program (TARP) broader authority to investigate and more specific reporting requirements. In the disclosure and reporting department, the bill mandates quarterly reports to Congress from the office of the Special Inspector General and the posting of all reports on TARP recipients online within 24 hours after issuance. Good for Congress for passing this bill.

I should say how this bill came to my attention. Congressman Erik Paulsen, an original sponsor of the bill, wrote a pat-on-the-back blog post for The Hill today, but he never mentioned which bill the House had just approved. Luckily, the congressman is on Twitter so I just tweeted him and asked and he got right back with the bill number--S. 383, by the way. It really is that easy to talk to a congressman nowadays. (It's also helpful if the answer you want is under 140 characters.)