A federal judge in Greenbelt has temporarily blocked enforcement of a new U.S. law that requires online posting of the assets and financial holdings of about 28,000 senior Executive Branch officials, saying the act likely violates their “informational privacy” rights.
In granting a temporary preliminary injunction, Judge Alexander Williams Jr. balanced the 2012 STOCK Act’s goal of discouraging financial corruption in government against the interests of U.S. Foreign Service, law enforcement, health care and national security workers in keeping their holdings from the eyes of anyone with a computer.
Siding with the workers, Williams said their right-to-privacy argument was “likely” to prevail after further court review. He delayed the effective date of the law for executive branch employees, currently set at Sept. 30, until Oct. 31.
Although the officials already must file financial forms, the STOCK act “erodes key safeguards to disclosure” and “ushers in a scheme of unfettered Internet access to the same sensitive information,” Williams wrote in a memorandum opinion accompanying his order in U.S. District Court.
Williams also found a “strong likelihood of irreparable harm” that could not be undone once the information is put online.
“Simply put, the publication of Plantiffs’ financial information is a bell that one cannot unring,” he wrote Thursday.
Williams added that his injunction does not foreclose the possibility that the government could ultimately prove in court that its “compelling interest” in deterring corruption and conflict of interest trumps the workers desire to protect their privacy.
The judge instructed both sides to file additional briefs prior to Oct. 31. He also said the case could be rendered moot if Congress amends the act to exclude Executive Branch employees.
Congress passed the law at issue — the Stop Trading on Congressional Knowledge Act — following an exposé by the CBS news show “60 Minutes” on the financial windfall of some congressional members who legally traded on inside information they gleaned during congressional investigations. President Barack Obama signed the measure into law April 4.
Executive branch workers challenged the law in a suit filed Aug. 2. The plaintiffs included Foreign Service employees, senior executives in the U.S. government, federal immigration judges and scientists at the National Institutes of Health, who would be subject to the online disclosure requirement slated to go into effect Sept. 30.
Jack McKay, an attorney for the plaintiffs, called the law unnecessary Monday insofar as executive branch workers are already required to make financial disclosures to their department chiefs under the Ethics in Government Act and are subject to criminal penalties for illegally trading on private information they learn on the job.
“There is simply no need for this,” said McKay, of Pillsbury Winthrop Shaw Pittman LLP in Washington, D.C. “It is hitting with a blunderbuss. It is a solution in search of a problem.”
Requiring that the workers’ financial disclosure forms “go on the Internet for the whole world to see [is] a gross invasion of their privacy,” added McKay, whose clients include the Senior Executives Association, the American Foreign Service Association and the National Association of Immigration Judges.
U.S. Justice Department attorney Bradley P. Humphreys, who is defending the law in the federal court, referred all questions to the department’s press office. The press office did not respond to a request for comment by press time Monday.
As originally drafted, the STOCK Act applied only to federal legislators and their staff. However, senior executive branch officials covered under the Ethics in Government Act were added to the measure prior to its passage.
Williams, in his opinion Thursday, said the ethics act contains protections against widespread public disclosure of financial information, whereas the STOCK Act calls for the federal departments to make their workers’ information available online.
“[T]he data’s publication portends substantial harm seeing that it stands to affect such a large swath of senior executives,” Williams wrote. “The vehicle of disclosure, cyberspace, exacerbates these risks because it optimizes the accessibility and transferability of the information.”