IRS, DOJ, SEC: Three-Letter Abbreviations For ‘Federal Bully’
Photo Credit: Shutterstock.com/Carlos Yudica
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Government entities that use three-letter abbreviations, like the Internal Revenue Service (IRS), Department of Justice (DOJ) and Securities and Exchange Commission (SEC) increasingly embody all the truant characteristics of playground bullies.
First, there’s the DOJ probing journalists for national "security" reasons while ceasing investigations into various banks and CEOs for their role in effectively embezzling trillions of dollars from the rest of the world. To them, banks are too big to bully.
Then we have the latest (publicly revealed, anyway) IRS maneuver of battening down on non-profit groups that utilize the wrong words in their name (given the relatively small size of these groups, this is a glaring perspective problem, whether they represent the Tea Party or the communist party) instead of the hundreds of billions of dollars stashed in the offshore tax havens that President Obama campaigned he’d do something about.
And now, the SEC has fallen further into bully territory. Enter Kathleen Furey, a 10-year veteran SEC staff attorney. Furey officially blew an internal whistle on the director of the SEC's New York office after he refused to bring cases against investment management companies under the Investment Advisers Act of 1940 and Investment Company Act of 1940, 15 months before we were media-slammed by the poster-boy of the Ponzi school of investment management, Bernard Madoff.
Furey’s official complaint reminds us exactly why her case is in the public interest. A section in Title 17 of the US Code of Federal Regulations states, “Members of the Securities and Exchange Commission are entrusted” with “powers and duties of great social and economic significance to the American people” and is tasked by Congress with ensuring that the “private enterprise system serves the welfare of all citizens.” If only.
Furey’s Fight for the Financial Safety of Americans
Furey’s saga began when she took this notion of entrustment seriously. And vocally. Between January 2002 to December 2008, Furey alerted her boss, an assistant director at the NY Regional Office (NYRO) of the SEC about the possibility of shady dealings going on at some investment management companies. Her boss responded “We do not follow IM (investment management) cases.”
Not satisfied with that brush-off, in late 2007, Furey stepped up the ladder and informed her superiors about his stance. Rather than do anything about the substance of her concerns, Furey’s superiors told her to take the matter up to the Inspector General. When she did just that, she suffered the kind of reprisals designed to shut her up, like the ways a bully might gut-punch a small kid at recess time implicitly (or explicitly) threatening worse if the kid tells on him.
Furey was no slacker. She had received three years of straight promotions, raises and other monetary awards between September 2004 and 2006 for her exemplary work -- before she blew the whistle. Right afterward, all that stopped.
And yet, her workload increased, reflective of a higher-grade level within the SEC grid, just not with the pay or title that work entailed. Her career trajectory halted in the tracks of the SEC’s desire to cover its own ass even as the Bernie Madoff case publicly erupted, as per her earlier warnings. When Furey asked why she was getting less than someone below her share of duties, given that her fears had proven prescient and accurate, her high performance scores from June to September 2010 were altered as later exhibits revealed -- after she had signed them. Some of her higher marks were actually whited-out and replaced with lower ones.
So on January 30, 2012, Furey filed an official complaint with the US Office of Special Counsel (OSC). As with other federal employee whistleblower cases, the OSC doesn’t decide the case, but decides whether to bring it before the Merit System Protection Board. Furey also made requests to the SEC under FOIA and the Privacy Act to obtain her personnel records, supervisors’ communications about her, and other supportive information for her claims. Mostly, the SEC refused to produce those records.