The U.S. Department of Justice's Legal Counsel is under investigation for possible involvement in a controversy at the Federal Deposit Insurance Corporation (FDIC).
According to a Jan. 21 press release, the Functional Government Initiative (FGI) announced that it is investigating the Department of Justice’s role in moves by board members of the Federal Deposit Insurance Corporation to challenge the authority of the FDIC's chair.
The Wall Street Journal reports that Rohit Chopra, a board member of the FDIC who also is the director of the Consumer Financial Protection Bureau, sought a legal opinion from the Justice Department’s Office of Legal Counsel on whether the FDIC chair has to set the agenda for the FDIC, as has been the longstanding procedure and practice.
Chopra also sought to circulate a proposal relating to bank mergers that, according to now-former FDIC Chairman Jelena McWilliams, "was filled with omissions, misrepresentations and technical inaccuracies," but Chopra and other FDIC board members moved to go forward with it anyway. Chairman McWilliams has since announced her resignation from the FDIC.
The FGI's investigation seeks information on recent actions by several federal agencies that may call into question the FDIC’s independence and its adherence to its procedures and practices. McWilliams called it "a hostile takeover" by some of the other FDIC board members, Wall Street Journal reported.
FGI filed a request under the Freedom of Information Act seeking documents from the Office of Legal Counsel (OLC), along with the Consumer Financial Protection Bureau, FDIC, and Treasury.
"The public should know what precedents and existing legal policy Mr. Chopra wants to change as part of his efforts to counter the authority of the FDIC chairman," FGI said in a release.
The Functional Government Initiative is a newly formed organization that focuses on investigations and education to promote transparency in the actions of the federal government.
The Federal Deposit Insurance Corporation itself promotes its role as an independent regulator.
"The Federal Deposit Insurance Corporation is an independent agency created by Congress to maintain stability and public confidence in the nation's financial system," says the agency's website.
The Office of Legal Counsel issues legal advice for the executive branch of the federal government, typically on complex matters involving two or more agencies.
