Steve_Berk

we should take bets on when the opinion comes out. I'll go with late September

really great information--much appreciated dont mean to beat on a dead horse, but it could go back to the word "may" that steve_berk pointed out, i.e. its permissive not mandatory that the conservator take action necessary to put the agency in sound and solvent. so, if fhfa thought theres no way to liquidate this huge portfolio, they could still lawfully do a slow wind down as conservator. motivation matters here, and g's salting the earth comment tells me he has plenty of reservation about giving the fhfa a free pass by not requiring a full admin record "may" as permissive is certainly how fhfa spun it. there is the counterargument, contained in perry briefs, that it is orthodox statutory costruction that when a statute grants powers to an agency, it uses the word "may" as an instance of what the agency is empowered to do, and powers that the agency aren't granted with "may" are powers that agency can't do. this gets right at the fhfa/doj argument that a conservator may wind down. you saw ginsburg's resistance to that construction, saying in effect that the listing of powers of receiver and conservator in one section doesnt imply that each has all such powers, because the rest of the statute makes clear that the powers are separate for C and R, and so the word respectively is implicit. in effect ginsburg will have to do a 180 if he concludes that a C can wind down, and need not conserve. while not impossible, i just dont see that as likely @steve_berk this is a good analysis, and i wont quibble with it. but i want to give you some perspective that may affect how you see #1. you can take it or leave it. there are various "liberal" legal commentators who have decried that the DC circuit court of appeals is too conservative, and that too many senior judges are members of this conservative wing. some have called this wing the "constitution in exile" wing, after an innocuous reference in a book review done many years ago by ginsburg. part of the reason the DC circuit is considered "too conservative" is that the senate has been slow walking obama judicial appointments to vacancies. ginsburg of course is a senior judge. now, i think ginsburg is aware of this criticism, and i think he would like to have any decision that he makes or participates in that calls for remand and further fact finding to be viewed as"neutral", insofar as the facts discovered on remand could swing one way or the other, and getting his "friend" olson to agree to that is the best way to evidence that this was a judicial decision (ie more facts needed to do justice) rather than an ideological decision. when olson says that it is possible, but this is what happens when one has to speculate about the record, ginsburg jumps in to agree, meaning the harm by lamberth was in not requiring the record, a judicial error, not an ideological error. fwiw, i believe olson is quite willing to start digging for facts w/o too much fear of P regret

BTW, not to monday morning quarter back this, but I agree with that college kid who called into the investor call run featuring Hume. The regs are the best evidence we have that the statute intended for a conservator always to perform actions intended to bring the entity to a sound a solvent state. This was raised in the briefs but should have been hammered home in the oral arguments.

This goes to the heart of what's puzzling about where Ginsburg stands. Here are things that it seems like he may believe based on the oral argument: 1) that a full record may reveal some kind of lawful intent that justifies the conservator's actions (he seems quite sure of this) 2) that the actions of the conservator constituted or appeared to be a winding down of the entities (he seems somewhat sure of this--I wouldn't say that he's certain of it though, because even though he uses strong language--the salt of the earth comments--in his questioning of Olson he seems more flexible on his interpretation of the facts) 3) that the statute seems to indicate that a conservator and receiver have different powers--that respectively can be read implicitly in the statute (he seems somewhat sure of this--doesn't really press the issue when the FHFA says he's wrong), and that essentially a conservator can't act as a receiver and wind down an entity. OK, if I'm right about these things, are they consistent? Well if he believes 2&3, then game over, and inconsistent with #1. If he believes in 1&3, then maybe he's open to the possibility that the conservator wasn't winding down the entities, but they were doing something else that wasn't what a receiver would do (but maybe still doesn't aim towards sound and solvent)--e.g. just pressing pause and waiting for congressional action. If he believes 1&2, maybe he's open to reading the statute in a way that would allow a conservator to do certain things a receiver would normally do. I am most certain that he believes in 1, but am not sure whether he'd believe in 1&2 or 1&3. If I had to guess, I would say he probably believes in 1&3, based on his dialogue with Olson. dont mean to beat on a dead horse, but it could go back to the word "may" that steve_berk pointed out, i.e. its permissive not mandatory that the conservator take action necessary to put the agency in sound and solvent. so, if fhfa thought theres no way to liquidate this huge portfolio, they could still lawfully do a slow wind down as conservator. motivation matters here, and g's salting the earth comment tells me he has plenty of reservation about giving the fhfa a free pass by not requiring a full admin record "may" as permissive is certainly how fhfa spun it. there is the counterargument, contained in perry briefs, that it is orthodox statutory costruction that when a statute grants powers to an agency, it uses the word "may" as an instance of what the agency is empowered to do, and powers that the agency aren't granted with "may" are powers that agency can't do. this gets right at the fhfa/doj argument that a conservator may wind down. you saw ginsburg's resistance to that construction, saying in effect that the listing of powers of receiver and conservator in one section doesnt imply that each has all such powers, because the rest of the statute makes clear that the powers are separate for C and R, and so the word respectively is implicit. in effect ginsburg will have to do a 180 if he concludes that a C can wind down, and need not conserve. while not impossible, i just dont see that as likely

The only thing I'll add to this, which isn't really a disagreement but just something to consider: I have seen knock-down, drag-out fights over the privilege of documents that are pretty much meaningless and not legally harmful to the party asserting the privilege. I don't read too much into the fact that the FHFA is fighting tooth and nail to prevent the documents from being disclosed. I presume that there are pieces of information and documents that could be embarrassing, but I don't presume that there's a smoking gun hidden within.

Here it is: MR. STERN: Well, it's not a liquidation, and the statute, I mean, first of all, the statute specifically contemplates, like, the wind down as being a power that can be asserted, like, in the conservatorship, you know. But it's, like, what -- JUDGE GINSBURG: Does it? Where is that? MR. STERN: It's in, it's 4617(a)(2), which allows the conservator as well as the receiver to take actions for the purposes of reorganizing, rehabilitating, or winding up the affairs of the GSEs. JUDGE GINSBURG: Yes, well, as I read that, it's, the word respectively is implicit in there. MR. STERN: I disagree, Your Honor, because there are a lot of powers that are set out specifically for the conservator and the receiver in the statute, this one doesn't make that. But I think more fundamentally there is, like what the, I believe that the Third Amendment talks about an acceleration of, like, the, of like of the enterprises reducing or retaining mortgage portfolios, and in that sense that's a kind of winding up. The, like, what you have in terms just of their ongoing functionality is not, like, in any sort of particular, sort of, like way, it's winding up, what Treasury does think, you know, is that given the difficulties that are involved in sort of like a recapitalization of any conservatorship, and, you know, we've said this many times that legislation is appropriate. But -- JUDGE GINSBURG: But when the Third Amendment was announced the Treasury said we're going to wind this thing down, we're going to kill it, we're going to drive a stake through its heart, and we're going to salt the earth so it can never grow back. MR. STERN: I don't remember that language. JUDGE GINSBURG: Yes. You may be confusing it with Tortego (phonetic sp.). But that was the gist of it, we're not going to allow it to be recapitalized in any way, and we're going to look to a future in which the GSEs don't play a role. MR. STERN: Well, I think what Treasury has said repeatedly is that it thinks that congressional action is appropriate, and we've discussed, like, the difficulties of recapital -- JUDGE GINSBURG: But defending the congressional action it has to live within the statute it's got. MR. STERN: Yes, and it is. I mean, because the alternatives are not good ones, I mean, it's not, like, what they had wasn't a good alternative, I mean, that wasn't doing well. What's happened now it's like they're all sort of things to deal with a very difficult situation, and -- JUDGE GINSBURG: Well, I think they had two alternatives to act as a conservator, which they didn't want to do, or to act as a receiver, and move towards liquidation. MR. STERN: No, Your Honor, I don't think that this is a move towards liquidation, there has not been a liquidation, and again -- JUDGE GINSBURG: Well, they could move slowly considering the size of the portfolio -- MR. STERN: Well, but -- JUDGE GINSBURG: -- they would have to move slowly. MR. STERN: -- and they could legitimately do that, like, if that's what they wanted to do, they could do that. agreed. there was discussion, however, of the whole notion of "winding down", which the treasury admits is the effect of the NWS, and which the statute refers to in the context of receivership. i believe this was when treasury argued that the winding down power was that of both conservator and receiver, and ginsburg interjected that he thought the world respectively was implicit (ie winding down a receiver only function). but if my recollection is correct, this exchange was at the behest of ginsburg questioning DOJ, not olson being effective

And btw, my degree of confidence on my 25% prediction is about 15%. So it's pretty much meaningless.

it's not anything close to a science. My % is only on the APA claim (I don't know how to put a number on the contract claim) -- if you'll see the post I made in response to chezerca, I'm referring to the dialogue between Ginsburg and Olson where Ginsburg makes it seem like he's open to the possibility that the record would demonstrate some kind of lawful purpose on the part of the conservator. That, coupled with his repeated reference to the 10Q's, Grant Thornton and his characterization that there were 'competing views' at the time the NWS was implemented, leaves open the possibility that when he goes back and writes the opinion, he will apply the deferential standard towards the conservator, decide that there's enough on the record that it doesn't have to be supplemented. Now I don't actually think that will happen based on other things he focused on, but I do think there is a good enough chance to bring me to 25%. Anyhow, I'm just making up numbers.

I'm was only thinking about the APA issue, so I should just qualify--I honestly don't know how to assess the probability on the contract issue, because I feel like the questioning was much less revealing. On the APA issue, Milstein makes it seem like she could go for reversal for reasons I've already articulated--we don't know anything about Brown (other than her prior record). And then you have Ginsburg, who makes it reasonably clear that he wants a remand. But I'm still troubled by his questioning of Olson where he essentially says that a full record could reveal that the conservator acted with a permissible purpose, so I think that leaves the door open for him to determine based on the APA standard of deference that there's enough (citing the 10Q, etc, building a case that there were 'competing views'). I assess affirmance as more likely than reversal because unlike affirmance, I don't see any part of the argument that really leaves the door open for reversal on the APA issue. if i were giving odds, i would give 5-10% affirmance, 15-20% reversal and 70-80% remand. the reason why i would give grater odds for reversal than affirmance is that i believe judges showed absolutely no willingness to drink the anti-injunction/lamberth kool aid, while i think they took seriously the conservator sound and solvent notion, but were pushing back. millett at one point said, where does the statute talk about rehabilitation, when olson used the term. so i think she wont get to reversal. the others might @steve_berk what did you see/hear in ginsburg or brown that made you think affirmance was even a 25% possibility?

I'll go with 25% chance of affirmance, 10% chance of reversal and 65% remand. Which using Luke's method of calculation a price of $4.37, only 16% over the current price. if i were giving odds, i would give 5-10% affirmance, 15-20% reversal and 70-80% remand. the reason why i would give grater odds for reversal than affirmance is that i believe judges showed absolutely no willingness to drink the anti-injunction/lamberth kool aid, while i think they took seriously the conservator sound and solvent notion, but were pushing back. millett at one point said, where does the statute talk about rehabilitation, when olson used the term. so i think she wont get to reversal. the others might

The discussion of due process is really interesting. You see how Judge Brown framed the issue in that case. here is how Brown lays out the due process/fairness issue: The specific fairness question we face here is whether an economically self-interested entity may exercise regulatory authority over its rivals.... We agree with the freight operators. Our view of this case can be reduced to a neat syllogism: if giving a selfinterested entity regulatory authority over its competitors violates due process (major premise); and PRIIA gives a selfinterested entity regulatory authority over its competitors (minor premise); then PRIIA violates due process. -- the court is concerned with providing regulatory authority to an entity that has a conflict of interest/self interest. Of course we're not talking about the exact same type of conflict of interest, but we still are making a case where the Treasury is not acting in the interest of Fannie/Freddie or even the taxpayers, but in its own interest. And if that is the case, at least there should be an opportunity to litigate... because you can't have a statute that carves out basic due process of the law.

yeah, that could be the equivalent of judicial trash talk, too. I've seen it more than once. Yea. The implication is that there wouldn't be a reason to move to Kentucky if he was going to dismiss the original case given that it just means that he'd take on an increased case load, but the alternative theory is he could just dismiss all of them on 4617(f). It's interesting that Judge Thapar mentions in his filing that he agrees with the plaintiff that "justice delayed is justice denied." Image attached. Sure, but he could view justice through the eyes of the government. Always remember, no man is the villain of his own life story. There are always people on the other side who believe just as fervently that they are on the side of righteousness.

well that was entertaining. it would have been fun to hear their inner thoughts behind the diplomatic presentation from both guys

I'm going to listen to that corker exchange later on. But reviewing the oral arguments, I think there are some who still believe there may be hope that Millet could come around because she asks tough questions of the FHFA and Treasury. But one telling thing I noticed is that the way she asks her questions is different depending on who she's asking the questions to. When she questioned Olson and Hume, her questions were direct, skeptical and pointed. However, when she questions Cayne and Stern she repeatedly begins her questions by saying "they (plaintiffs) would say..." To me she's doing this not purposely but because she doesn't believe the arguments she's presenting and is trying to elicit a response. There's conviction in her questioning of plaintiffs, but couching in her questions to the defendants. I know many already see Millet as a lost cause so maybe this is unimportant. But it stood out to me as I started to look at her questions carefully

Even if the GSE's are necessary doesn't mean that they will be recapitalized. If the Treasury is allowed to get away with it, from their standpoint, why not allow them to reap the benefits of all profits and sweep away to their hearts' content?

I was focusing more on the extent to which the court questioned either the FHFA or the Treasury aggressively on the contract issues, taking on Hume's argument. And I didn't think that happened so much. You're probably smart to just be in the preferred. I have a lot of common and some preferred. But only bc I think this is so speculative that I might as well go big.

The point that I was trying to make is that we only have Ginsburg supporting remand for a record, and not outright reversal on violation of the statute. That even though he says things that are supportive of a finding that the statute was violated that he thinks we have to go back to the record and that some lawful motivation might make it so that we understand the actions of the FHFA to be compliant. So I'm in agreement that we stand a good chance of getting a remand for an administrative record, but nothing beyond that. I agree that the 'respectively' argument is a good one. But I still think that if "may" means "can" that a conservator isn't obligated to bring the entity to a sound a solvent state--that it can preserve and conserve. And that you can at least make an argument that that's what they were trying to do, in light of the opinions in the 10Q, Grant Thornton, etc. But then, Olson takes advantage of the exchange and says something like 'that is what happens when the record is incomplete, we are here speculating' and the judge says 'that is exactly right, I don't think we need to go further than that'. As for Cayne, that only liquidation is the additional power of the receiver, I am having a hard time seeing how J. Ginsburg would interpret this as a conservator being able to wind down and a receiver being able to rehabilitate since -according to Cayne and liquidation aside- all the powers granted by statute are shared. This is why I think J. Ginsuburg used the *implied* word "respectively". Meaning powers are distinct and separate.

I agree that a remand for a full and complete record is the most likely positive result for us. I just wonder what other things the judge might rule on, e.g. going out of its way to interpret that statute defining a conservator. I'm not at all optimistic about the APA claim after studying it. And as I noted, even if Ginsburg is inclined to believe that the FHFA didn't act as a conservator, I think he has clearly said that he holds the view that notwithstanding the actions of the FHFA that the record may still reveal a lawful motivation. Olson really should have done a better job here to explain that a violation of the statute doesn't require proof of unlawful motivation, just unlawful action outside the scope of the statute. And that a demonstration of bad faith would be another, independent way to show that they weren't acting lawfully as a conservator. With respect to the contract claims, I thought Hume's comments during the investors call was interesting. He said that it's good that the court spent so much time on the argument, because it means that they're really taking it seriously and grappling with it. But they spent the vast majority of time on the APA claim. Now it doesn't logically follow that their not questioning or taking time on the contract claims means they're not taking it seriously, but there's that risk. In my experience with appellate courts, when judges don't aggressively question, that means that they're more likely to affirm the lower court. Because if they're going to overturn, even if they already made up their minds, they're going to want to demonstrate a proper justification for overturning the lower court--I don't think any appellate courts take overturning the lower court lightly. So aggressive questioning would accompany a predisposition to overturn (although aggressive questioning doesn't always mean that). I am more discouraged by their silence on the contract claim than anything.

The one thing that even has me concerned about Ginsburg is that even though he was skeptical of the FHFA's actions, to me one of the most revealing things that he said in oral arguments came during the initial questioning Olson. Most of the time when judges are questioning someone there's a good chance that they are simply probing and not revealing their views. However, Ginsburg goes a little farther than that when he says something to the effect of I don't see how it's consistent to say we need a record and to ask for reversal, since the record could show some lawful purpose ("I don't see how that's consistent with saying that the record's inadequate"). That's taking more ownership of the question and expressing it in a way that one can interpret to be his view. Unfortunately at that point Olson all but concedes even though he had a chance to explain why the positions of asking for reversal and a record are consistent.

Re, whether the judges agree with the FHFA's spin.... I've been re-reading the oral argument of Cayne and also getting a sense of where the court stands on the argument related to the scope/boundaries of responsibility of the conservator. It's striking that there are few questions when he says that the only thing a conservator is not allowed to do that a receiver can do is to liquidate. And that otherwise the conservator has broad powers that it shares in common with a receiver. Nobody questions him about whether the conservator had to bring the entity into a sound and solvent state, and nobody challenged his narrative that Congress basically wanted to press pause until 2018, for it to remain in conservatorship, at which point Congress would reserve the right to act. Are others more optimistic about the possibility that the court could reverse on the basis that the FHFA acted beyond its authority as a conservator? In Millet's questioning of Stern, she does raise the question about whether a conservator could take away all future profits and still lead the entity towards a sound a solvent state, but she doesn't even ask a follow up question after the answer. Of course Ginsburg is more aggressive with the questioning and Brown does occasionally chime in with a question about ultra vires. But what do others think about the likelihood of success on reversal on the point that the FHFA exceeded its authority as a conservator. I have no reason to be optimistic, since it's not at all clear what Brown thinks and we don't have Millet, but might have Ginsburg. Maybe I'm misreading other posts in this thread, but I got the sense that some were optimistic about this point based on the oral arguments. I'd like to be more hopeful, but am not sure I see where that hope would come from.

I started taking some notes before I got sidetracked with work. Nothing new or terribly interesting in my notes, but I take them to avoid getting distracted: Breach of contract for common and preferred Breach of fiduciary duty Taking of private property under the fifth amendment --- made in the court of federal claims—the takings claim, did not go up on appeal to DC circuit—the only place it's being adjudicated is in the court of federal claims Not bringing an APA claim like Perry capital is. No reason for the APA claim to be in the class action. We think we should win, even if they lose their claim. Big picture—while there was tough questioning from the panel; significant to emphasize we had almost three hours of argument. Sometimes they let us go way over the time limit and spend time. shows they recognize the significance of the case, and it wasn’t a slam dunk case to affirm the district court. Put before them significant arguments. Positive sign for shareholders While there are a lot of technical legal defenses, it was unjust The three judges all seemed to be more preoccupied with the APA claim that Perry is making. Clear with Millet that she had thought a lot about them and had tough questions and some skepticism. When they turned to the common law claims, there was some questioning about the legal obstacles and succession provision, but very little questioning on the core merits of the common law claim. which says they spent less time thinking about them. Lamberth dismissed on the merits. Panel had no questions here. Defendant had no answers to the simple points on the merits of the common law claim. the central point is that under breach of contract claim, when you have an implied covenant claim (duty of both sides to act in good faith and fair dealing), when the court decides breach, court needs to look at the basic economic substance. Should be substance that should be considered over form. Central concept. Here’s what happened. Under the contract as originally structured, the treasury had a right to 10% dividend, and if it wanted dividend about that, the contract said all they had to do is exercise a warrant for 80% of company for 10-15k. August 2012, entities making profits, and instead of Treasury exercising warrant, it does the NWS, and the result of that is that 130 billion paid from the companies to the Treasury in excess of the 10% dividend – they paid that, and another 130 billion paid out. If they exercised the warrant then they would have had to pay the junior preferred their dividend first. Just under 8 billion. The remaining would have been split 80-20 with common shareholders. Instead of honoring those terms, the Treasury breached so 100% would go to treasury and avoid paying dividend to preferred and common shareholders. Judge didn’t ask about this. The key point is that the breach of K is a breach whether or not there is an APA violation—even if they reject everything that Perry argues. Judge millet was very focused on what the FHFA really knew about the future profitability of fannie and Freddie when it agreed to the NWS. Focused on the possibility that if they were not certain of the profits, wasn’t it within their discretion. What if they believed there was no profits? Wouldn’t it be better for the company? Olson said no, whatever they thought, still inconsistent with acting as a conservator. He says that’s not what they thought and they knew it was going to be deferred tax asset write off. They were resistant, and Hume tried to point back to the projections that they knew they would be profitable. Ginsburg focused on If Perry wins, then it’ll benefit all existing shareholders—it’ll make fannie and Freddie more valuable and benefit shareholders. No payment of money directly. But value to the enterprises. If Class wins breach of contract claim or takings claim, that is seeking direct payment of dollars to the shareholders. The benefit of that, you need to be in the class, but you will get plenty of notice opting into the class. If you don’t opt into the class, you could bring a claim on your own. Where money will come directly to the shareholders you have to be in the class. There’s a difference—the takings claim—people who have more than $10,000—not in class unless you decide to opt in (takings claim). For breach of contract claim, you’ll get notice and will automatically be in class unless you say you want to be out of the class.

Seems like a lot of you guys are way ahead of me, so feel free to ignore. But many of you seem very comfortable concluding that the FHFA has exceeded its authority and have acted in a capacity that could not be defined as a conservator, based on the statute. I agree that there's no way that its actions could lead the entity to a sound and solvent state, but the statute says the agency MAY, as conservator, take such action as MAY be necessary to put the regulated entity in a sound and solvent condition. The FHFA is arguing that this is permissive, not mandatory. I know the counterargument is that the word MAY is used to communicate the exclusive powers of the conservator, but isn't there at least a chance that the court would rule that it's permissive? And if it's permissive, then the FHFA could just show that it made a reasonable attempt to preserve and conserve. Yes, we know that the decision to create the NWS ultimately wasn't a good deal at all for the GSE's, but then don't they just have to show that there were competing views--some believed that entities were still in trouble (e.g. the 10Q) and some believed they were turning the corner? If they show they honestly believed that the GSE's were in trouble, isn't there still a reasonable argument to be made that they did what they could to preserve the assets by relieving the GSE's from having to pay the 10%? Now, I know that they had other options to avoid paying the 10%, but I want to avoid making arguments about what would have been the best thing for the FHFA to have done, because I don't think that brings us to a per se violation of the statute. I still believe the court will remand for a full record, but am struggling to reach the level of confidence that some of you have on the violation of the statute.

it's weird--here's what Cayne said during his argument: And I would, I said to my colleagues I applauded the member of the Panel, or the Clerk who saw this, but it just supplements what we have said.... I am still unclear of Genesis of argument. Isn't it that court asked parties to address it at orals at last moment? If so it is hard for anyone to criticize this panel if it rules against govt given court went out of its way to raise a possible jurisdictional bar. Having said that it seems the language and structure of stat heavily favors Ps.

I've been doing background reading and went back to the language of the statute. There's nothing there that directly supports this transitional conservator who is gearing the institution towards receivership. In fact, when you look at the statute, 4617 lays out pretty clearly the powers of the conservator, as distinguishable from receiver. And the powers of the conservator has the sound and solvent language in it. Although the one thing that gives me pause is that I am looking at the statute and 4617 (b) (2) (D) talks about the power of the conservator and 4617 (b) (2) (E) says "ADDITIONAL" powers as receiver. Why is the word "additional" there and has this been addressed? I would like for the statute to mean that you have to either act as a conservator or a receiver, and not both. But if the "additional powers" language means you can act as both, then the court could rule that there was just a notice problem. Am I missing something here? I hope so. It seems a low bar for the judges to agree that the nws prevents fnma from becoming sound and solvent (g tipped his hand on this one). But does it necessarily follow from a statutory standpoint that they're in liquidation, and hence in receivership? i think millett was struggling with this and I'm not clear on it either You ask good questions hardincap. As far as I can see it is enough for nws to be incompatible with conservatorship. Not necessary to cross into receivership if it is invalid on its face as a conservator act

I agree with this--I wish Olson had done a bit better job with this argument when Ginsburg was pressing him about the record and the intent point. I think Ginsburg at that point was making it seem like a complete record (further facts) could show a permissible intent, therefore undermining the argument to reverse instead of remanding for a full record. Olson does make the argument that he's got enough on the record to demonstrate that the conservator was not acting towards bringing the entity to a sound and solvent state, but he comes across like he's conceding that a full record could prove anything so let's get that first. I still haven't completely sorted out a bunch of the arguments that Millet made about sound and solvent. She seems to sometimes concede in the premise of her questions that you could never reach that state if you're taking away all profits indefinitely; but then she also seems to get hung up on the point that the conservator is permitted to do whatever it needs to in order to act in the interests of the agency.