An appeals court panel today reversed a lower court’s decision and denied a journalist access to corporate monitor records from the insurance giant American International Group, Inc.
The decision of the three-judge panel of the U.S. Court of Appeals for the District of Columbia could prevent the release of records that Sue Reisinger, a senior reporter at Corporate Counsel magazine, argued may shed light on actions that led up to the financial industry meltdown in 2008. AIG was bailed out with taxpayer funds after suffering a liquidity crisis in its credit-default swap transactions in 2008.
The company then became a lightning rod for public anger at perceived Wall Street greed.
An attorney for Reisinger, the records’ requester, said he and his client were reviewing Friday’s decision before deciding what to do next.
Reisinger filed a Freedom of Information Act request in 2011 seeking the release of records generated during a corporate monitorship imposed on AIG as result of 2004 settlements with the Justice Department and Securities and Exchange Commission over alleged accounting violations that helped clients inflate profits.
Corporate monitors are outside consultants hired by companies as a condition of their settlements with the government. The monitors examine company operations to ensure compliance with the terms of a settlement. Monitors submit periodic reports on their work that U.S. authorities review.
AIG retained James M. Cole, then a partner at Bryan Cave LLP, as its monitor. He was succeeded by Therese D. Pritchard of the same firm. Cole is now Deputy Attorney General, the second most senior position at the Department of Justice.
After the SEC and Justice Department denied Reisinger’s FOIA requests in 2011, U.S. District Judge Gladys Kessler last year ordered the documents’ release, saying that the monitorship records had become court documents and therefore were subject to a common-law right of release.
The district court’s decision was reached over the opposition of the SEC and AIG, which had requested in 2006 that a court prohibit the public release of the records.
In a decision on Friday, the appeals court disagreed with Judge Kessler, reviewing the case de novo and finding that the records in question had never given rise to any judicial decision and were therefore not judicial records subject to release.
In an opinion by Judge Janice Rogers Brown, the appeals court panel found that the reports “are not judicial records subject to the right of access because the district court made no decisions about them or that otherwise relied on them.”
The matter was also reviewed by appellate judges Brett M. Kavanaugh and Stephen F. Williams.
“A judicial decision is a function of the underlying record [...] and if a document was never part of that record, it cannot have played any role in the adjudicatory process.”
Reisinger was represented by J. Joshua Wheeler, director of the Thomas Jefferson Center for the Protection of Free Expression, an organization in Charlottesville, Va..
“We are in the process of reviewing the court’s opinion to determine what options are available to us. For now, all I can say is today’s decision does not alter our belief that the public interest would be well served by the release of the reports,” he wrote in an e-mail.
“On behalf of a public that deserves to see these documents, I am obviously disappointed with the ruling,” Reisinger wrote in an email to Reuters.
The case is Securities and Exchange Commission v. American International Group, 12-5141, U.S. Court of Appeals for the District of Columbia.
Previous coverage
Judge Orders Release of AIG Corporate Monitor Reports
Monday, April 16, 2022
Data Show Trend Away from Monitors for Voluntary Disclosures
Thursday, May 31, 2022
