Reason.com
Report: Fed Leadership Riddled With Conflicts of Interest
Wait, so an opaque, largely
unaccountable system with its hands all over the money spigot is a
ripe for corrupt dealing?
Do tell!
Multiple directors or former directors of the Federal Reserve banks who played a key role in the 2008 bailouts had an apparent conflict of interest, according to a Government Accountability Office (GAO) report. These directors had business relationships with companies and banks that received large infusions of government money.
The office of Sen. Bernie Sanders, I-Vt., who caucuses with the Democrats, noted that the report did not name any names, "but unambiguously described several individual cases involving Fed directors that created the appearance of a conflict of interest." The group of 18 people connected to both the Federal Reserve and a bailed out company included: the CEO of General Electric, Jeffrey Immelt (who is now President Obama's jobs czar); Stephen Friedman of Goldman Sachs Group Inc.; and Jamie Dimon, the CEO of JP Morgan Chase.
Friedman chaired the Federal Reserve Bank of New York in 2008, when the New York Federal Reserve approved Goldman Sachs as a bank holding company, which Sanders' office explains "[gave] it access to cheap Fed loans." Friedman received a waiver from the Federal Reserve to keep his chairmanship, even though he was "a current board member and shareholder of Goldman Sachs Group Inc." When Friedman received this waiver, "the Federal Reserve Board was unaware that the then-FRBNY chairman had purchased additional shares in Goldman Sachs via an automatic stock purchase program," according to the full report (here).
Whole D.C. Examiner story here; link via Instapundit. Re-read Reason's classic (and prescient) November 2006 roundtable: "Can We Bank on the Federal Reserve?"
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Jordan|10.20.11 @ 10:09AM|#
Just remember, we're the crazy ones for not defending this institution! Useful idiots love the Fed. That would be the same institution that has just allowed BoA to shift trillions of dollars worth of shit onto taxpayers.
Maxxx|10.20.11 @ 10:15AM|#
Duh
Having the leaders of the largest banks working together for mutual benefit was the whole point of creating the FED in the first place.
Mr Whipple|10.20.11 @ 10:17AM|#
Friedman chaired the Federal Reserve Bank of New York in 2008, when the New York Federal Reserve approved Goldman Sachs as a bank holding company
...and we all know who the president of the FRBNY was.
Mr Whipple|10.20.11 @ 10:18AM|#
No, it wasn't Hitler!
Mr Whipple|10.20.11 @ 10:22AM|#
NEIN, NEIN, NEIN!
http://www.youtube.com/watch?v.....re=related
Montani Semper Liberi|10.20.11 @ 10:20AM|#
Multiple directors or former directors of the Federal Reserve banks who played a key role in the 2008 bailouts had an apparent conflict of interest
Mind is blown!
|10.20.11 @ 10:42AM|#
THAT'S HOW CARTELS WORK!
...also:
How interesting sir. I did not know you could purchase the services of prostitutes at a brothel.
|10.20.11 @ 10:42AM|#
What about Geithner?!?
free2booze|10.20.11 @ 10:46AM|#
See... see. THIS is why we need the OWS movement. Our system of powerful business leaders, who are appointed by the political class to fill influential positions in the government, once and for all proves why capitalism fails.
We need to move to a system of socialism, which will allow the government to run industry, by appointing powerful business leaders to fill influential government positions, so that they can effectively coordinate the economy.
Do you see the difference now?
|10.20.11 @ 10:58AM|#
Lose the capitalism, keep the cronies.
hazeeran|10.20.11 @ 4:27PM|#
this.
|10.20.11 @ 11:00AM|#
It is a good thing our brave media pointed all of this out during the debate over TARP. Like it would have been so hard to see who is on the Fed and where they used to work and what stocks they own. Think about it. The media never touched this.
Eduard van Haalen|10.20.11 @ 11:02AM|#
This GAO audit was mandated by Congress. Without Congressional approval, the GAO wouldn't have been able to do this audit. Not unless the Fed *wanted* to be audited.
Wasn't there someone other than Sanders who wanted to audit the Fed? Can't remember his name, exactly.
Mr Whipple|10.20.11 @ 11:09AM|#
Don't forget, this the "watered down", or Mel Watt version of the Paul/Grayson amendment to the Dodd-Frank Bill.
Sanders changed his mind at the last minute. I'm sure it was just a coincidence that it was shortly after a closed door meeting with Bernanke and Geithner AND the same day as the "Flash Crash".
Mr Whipple|10.20.11 @ 11:13AM|#
Actually, IIRC, the Paul/Grayson amendment stood in the House version. It was Maxine Waters and Bob Corker that decided to use the watered down Senate version in Conference Committee.
Maxine Waters|10.20.11 @ 11:15AM|#
Cash money homey. Cash money.
Eduard van Haalen|10.20.11 @ 11:29AM|#
From Nov. 2009, an article in a financial journal against auditing the Fed:
“…in my view, auditing the Fed is a thinly veiled first step toward wiping out the Fed, or at least diminishing it through political meddling…
“…the Fed needs to be independent of political interference in order to act in what it sees as the best interests of the U.S. economy and financial system. Auditing the Fed will provide its opponents in Congress with an ongoing mechanism to meddle with its operations….
“…If the supporters of auditing the Fed can propose such a better way, then by all means, let's analyze it and see whether it would really work.”
http://www.dailyfinance.com/20.....t-the-fed/
|10.20.11 @ 11:16AM|#
That picture reminds me of Egg Shen when he was demonstrating Chinese black magic.
|10.20.11 @ 11:33AM|#
Top men, good intentions; repeat as necessary.
|10.20.11 @ 2:04PM|#
the GAO report is an attempt to refrain from stating the obvious: the Fed cannot avoid conflicts of interest because its design actually builds them into the system: http://bit.ly/qi8dNW
Paul|10.20.11 @ 2:04PM|#
Any bets on whether this becomes a point of contention at OWS protests?
Paul|10.20.11 @ 2:05PM|#
Oh, and when are we going to see the papier mache heads of Obama, Biden and Geithner trotting about the streets?
Nike Dunk High|12.9.11 @ 3:24AM|#
thanks