August 31, 2009
The Federal Reserve has until Sept. 30 to appeal a federal judge’s order requiring the central bank to disclose the names of financial institutions that took more than $2 trillion in secret emergency loans. The Fed’s Board of Governors asked Manhattan Chief U.S. District Judge Loretta Preska to delay enforcement of her ruling that the identities of hundreds of borrowers must be made public. The central bank wanted the judge to stay her order until the U.S. Court of Appeals can review her ruling in the Freedom of Information Act lawsuit brought by Bloomberg News. “What has the Fed got to hide?” asked Senator Bernie Sanders. “Fifty-nine senators, 283 members of the House and a Chief U.S. District Judge have voiced their support for greater transparency at the Fed. Yet, the Fed still insists on equating 'independence' with secrecy. The time has come for the Fed to stop stonewalling and hand this information over to the public. Trillions of taxpayer dollars have been put at risk by the Fed propping up the banking sector and large corporations without the approval of Congress or the administration. The very least the Fed can do is tell the American people who received this money, how much they received, and what they are doing with it. This money does not belong to the Fed. It belongs to the American people.”
The Senate voted 59 to 39 last April 29 for an amendment by Sanders calling on the Fed to disclose the names of all of the institutions that received more than $2.2 trillion in taxpayer assistance, how much each received and what they are doing with the money. The amendment was included in the final version of the Budget Resolution.
Sanders also is the chief sponsor of legislation to require the Fed to name the financial institutions that have received what could total more than $7 trillion in loans and loan guarantees. A separate Sanders bill would require the Government Accountability Office to conduct an independent audit of the Fed.
Sanders also voiced his concern in a July 15 letter to Fed Chairman Ben Bernanke and Treasury Secretary Timothy F. Geithner. “As long as the Federal Reserve is allowed to keep the information on their loans secret, we will never know the true financial condition of the banking system,” the senator wrote.
At a Senate Budget Committee hearing on March 3, Sanders asked Bernanke to name the hundreds of banks that took money since the financial crisis began. Bernanke refused to name any of the financial institutions. He also would not say what the banks are doing with the money. Sanders noted that the separate $700 billion financial bailout passed by Congress last October requires the Treasury Department to identify recipients of bailout funds.
To watch Sanders floor statement on the amendment, click here.