Mar 06 2009
Federal Reserve refuses to release info on bailout loans
In response to a Bloomberg News lawsuit, the Federal Reserve said that its Board of Governors receives daily reports on the bailout loans for financial institutions, but refuse to make the information public. Releasing the names of borrowers and loans, they say, would cast “a stigma” on those institutions receiving some $1.9 trillion (yes, Trillion) in emergency credit from taxpayers and collateral assets.
On February 26, Ron Paul introduced the Federal Reserve Transparency Act (HR 1207), and this is a perfect example of why it is needed.
Secrecy of the Federal Reserve was the focus of a Senate Banking Committee hearing last Thursday. In a sworn statement, Susan E. McLaughlin, a senior VP in markets group of the Fed bank of NY said the bank provides “select members and staff of the Board of Governors with daily and weekly reports” on Primary Dealer Credit Facility borrowing, which “include the names of the primary dealers that have borrowed from the PDCF, individual loan amounts, composition of securities pledged and rates for specific loans.” But no one on the outside is allowed to see them.
Committee member Richard Shelby (R-AL) declared, “If the American taxpayer’s money is at stake, and it is, big time, I believe the American taxpayers, the people, and this committee, we need to know who benefited, where this money went. There is no transparency here. We are going to find out.”
Last November 7, Bloomberg sued under the Freedom of Information Act, asking for details on 11 Federal Reserve lending programs. Most of the relevant documents are at the Fed Bank of NY, which, according to the Fed, isn’t covered under FOIA law.
Representative Paul’s bill has been referred to the House Committee on Financial Services. It mandates transparency and government-level audits of the Fed and removes all restrictions on the Government Accountability Office, requiring a full audit by the GAO by the end of 2010.
Even if you supported the bailout, don’t you want to know where the money is going? Senator Shebly said “The Fed and the Treasury can be secretive for a while, but not forever.” Unfortunately they can, unless we demand otherwise. HR 1207 is desperately needed now.
Source: Bloomberg News - Fed refuses to release bank data, insists on secrecy March 5, 2009
I’ve called my representative and senators every day since I heard about this bill pledging my support for it. It’s high time we broke the chains of debt, starting with the Fed.