Tim Iacono, at The Mess That Greenspan Made, reports on the lawsuit filed by Bloomberg to force the Federal Reserve to disclose what securities it is accepting as collateral in return for the money it loaned to banks. The U.S. Freedom of Information Act requires federal agencies to make government documents available.
Bloomberg v. The Fed
This report just in from … Bloomberg. It appears that some inquiring minds want to know some of the particulars behind the recent government spending spree on toxic securities.
Bloomberg Sues Fed to Force Disclosure of Collateral
Bloomberg News asked a U.S. court today to force the Federal Reserve to disclose securities the central bank is accepting on behalf of American taxpayers as collateral for $1.5 trillion of loans to banks.
The lawsuit is based on the U.S. Freedom of Information Act, which requires federal agencies to make government documents available to the press and the public, according to the complaint. The suit, filed in New York, doesn’t seek money damages.
…
Bloomberg News on May 21 asked the Fed to provide data on the collateral posted between April 4 and May 20. The central bank said on June 19 that it needed until July 3 to search out the documents and determine whether it would make them public. Bloomberg never received a formal response that would enable it to file an appeal. On Oct. 25, Bloomberg filed another request and has yet to receive a reply.
Apparently the details Bloomberg seeks are Top Secret (I’m not kidding – go read the article) and if nothing else, probably somewhat embarrassing.
My Comment:
From Wikipedia’s discussion:
However, it is in the exemptions to solicitation of information under these acts that problems and discrepancies arise. The nine exemptions to the FOIA address issues of sensitivity and personal rights. They are (as listed in Title 5 of the United States Code, section 552): [1]…
8. contained in or related to examination, operating, or condition reports prepared by, on behalf of, or for the use of an agency responsible for the regulation or supervision of financial institutions; or
Now take a look at the Fed’s position, as reported in the Bloomberg article:
Fed’s Position
The Fed staff planned to recommend that Bloomberg’s request be denied under an exemption protecting “confidential commercial information,” according to Alison Thro, the Fed’s FOIA Service Center senior counsel. The Fed in Washington has about 30 pages pertaining to the request, Thro said today before the filing of the suit. The bulk of the documents Bloomberg sought are at the Federal Reserve Bank of New York, which she said isn’t subject to the freedom of information law. [I’m guessing the claim is that the Federal Reserve Bank of NY is not a federal agency, so therefore documents stored there are not included. I’m not sure whether they are also arguing that the Federal Reserve itself is not subject to the FOIA. – Ilene]
“This type of information is considered highly sensitive, and it would remain so for some time in the future,” Thro said.
The Fed didn’t give Bloomberg a formal response because “it got caught in the vortex of the things going on here,” said Michael O’Rourke, another member of the Fed’s FOIA staff…
Note: Please continue to ignore the 48-hour delay box. Everything in the Favorites section is available immediately. There’s some "human" delay in me updating the backup site where there’s comments, the blogroll, and archives. – Ilene
