We don’t ask for much. Really. We’ve been trying to follow the recent SEC Inspector General reports slamming the Enforcement Division that seem to pop up weekly now, and we thought we knew where to look for a copy: the SEC Office of Inspector General’s website (here). But despite being discussed on the front pages of the country’s leading newspapers, these reports cannot be found on the SEC website. We contacted the SEC about getting a copy of the Aguirre/Pequot report and were directed to the Senate Finance Committee’s website, where we did locate a copy online.
Days later the IG’s report in the Bear Stearns matter made national news. Again we looked on the SEC’s website and again … nada. After spending way too much time searching we finally found a copy on the Miami Herald’s website, of all places.
The critical nature of the reports might cause a cynic to at least entertain the thought that the SEC was conveniently not updating the OIG website to avoid further publicizing the reports, but that just seems too blatant. But if that is not it, why are the reports still not posted?
Last night we read an interview with SEC IG David Kotz in the Corporate Crime Reporter, and saw the quote below:
“Our audit reports go on the web almost immediately when they are issued. That law requires us to do that. We don’t normally have much contact with the press at all. We just issue our reports. And whatever happens happens. We don’t have anybody in this office who deals with the press. And we don’t work through the SEC press office.”
Now completely confused, we decide to reach out to Mr. Kotz himself for an explanation. He told us the following:
- Please be assured that the Office of Inspector General (OIG) is not attempting to hide any reports from the public.
- OIG “investigative reports” such as in the Aguirre and Bear Stearns matters are different from the OIG audit reports that are regularly posted on the OIG website. Investigative reports typically focus on the conduct of individual agency employees or contractors, and are often quite sensitive in nature and may implicate individuals’ privacy rights. Often times, these reports recommend disciplinary action and/or possible criminal prosecution of certain individuals.
- Audit reports, on the other hand, focus on programs and operations, rather than individual conduct, and are therefore publicly available and posted on the OIG’s website. Their practice of posting audit reports, and not investigative reports, on their public website is consistent with the practice of Federal Offices of Inspectors General.
- OIG investigative reports may be requested by making a request under the Freedom of Information Act.
Why, then, are investigative reports such as the Aguirre/Pequot report publicly available on the Senate website? Mr. Kotz said his office “cannot speak for the Senate with regard to the releasing of information to the public, but would assume that Members of Congress have their own policies or procedures that apply to such matters. You will note, however, that the investigative report that was posted on the Senate website does contain redactions.”