On Tuesday January 12th 2010, the Federal Reserve, in a last ditch effort, asked a U.S. Court of appeals to block a lower court decision that would finally shed some light on where and how trillions of dollars of the public’s money was spent.
The decision stemmed from a lawsuit filed by popular financial source, Bloomberg.com. The newspaper had sued the Fed in November because top officials there refused to release the names of the banks to which it gave money and, more importantly, how the officials made the decisions.
But, despite the court’s decision, the Federal Reserve still refused to divulge the information about how and where it dispenses the taxpayers’ money. Which is not surprising, since the Fed has a long history at shrouding itself in secrecy.
Recently, Federal Reserve Chairman, Ben Bernanke, testified on Capitol Hill that he would not release the names of the banks that benefit from Fed largesse, because if he did so “it would destroy the value of the program… that banks would not come to [them].”
In response, Congressman Ron Paul (R-TX) and Senator Bernie Sanders (I-VT) introduced H.R. 1207 and S. 604, respectively, known as “The Federal Reserve Transparency (Sunshine) Act of 2009.” This bill would simply allow the Comptroller General to audit the books of the Fed and insure that there weren’t any conflicts of interest.
Understandably, these bills gained massive popular support, with the final count of total co-sponsors 319 in the House and 31 in the Senate. By November, Representatives Ron Paul (R-TX) and Alan Grayson (D-FL) were able to pass an amendment, based on H.R. 1207, through the House Financial Service Committee 43-26 and though the language was weaker, it still demanded greater Fed openness.
Now, as all of this unfolds, Federal Reserve Chairman Ben Bernanke has been renominated by Barack Obama and is waiting Senate confirmation.
Barack Obama, in a Memorandum to “the Heads of Executive Departments and Agencies,” stated that his “Administration is committed to creating an unprecedented level of openness in Government” and that “Openness will strengthen our democracy and promote efficiency and effectiveness in Government.”
Now it may be true that The Federal Reserve is not technically an “Executive Department,” but one would think that if the Administration were truly “committed” to “openness,” it would not renominate someone who is so vehemently opposed to transparency.
This paper agrees with the President that transparency will strengthen the United States’ democracy. But Obama’s decision to renominate Chairman Bernanke shows that openness in this Administration has clearly become little more than transparent duplicity.
So now, it’s the Senate’s turn. With eight newly elected Democrat Senators who adopted the Obama mantra of transparency — and many other Senators on both sides — touting openness, it is time for them to stand up against Obama’s appointment and send Fed Chairman Ben Bernanke back to academia where he can operate in the shadows of obscure Ivy Towers.
Then, the Fed can begin letting the sunshine in – starting by withdrawing its appeal in the Bloomberg lawsuit.
