The Federal Reserve’s Crimes Against the American People Go Unpunished
In what is likely the least surprising news headline of the day, The Federal Reserve's Watchdog has cleared Chair Jerome Powell and former Vice Chair Richard Clarida of any wrongdoing in their trading activity. “We did not find evidence to substantiate the allegations that former Vice Chair Clarida or you violated laws, rules, regulations, or policies related to trading activities as investigated by our office,” Inspector General Mark Bialek said in a letter to Powell dated June 11 and published Thursday. Yesterday, Senator Sherrod Brown, the Chair of the Senate Banking Committee, along with two of his fellow Senators on that Committee (Jon Ossoff and Raphael Warnock) and two additional Senators who do not serve on that Committee (Jeff Merkley and Kirsten Gillibrand) sent a stunning letter to Federal Reserve Chairman Jerome Powell. The overall thrust of the letter suggested that the Fed had attempted to quiet public outrage over the Fed’s trading scandal by issuing new trading conduct rules for Fed officials but had failed to put the force of law behind those rules or set up a proper chain of command. But three sentences in the letter also strongly suggest that the Fed Chairman is actually hampering the investigation of the trading scandal, which was referred by Powell to the Federal Reserve’s Inspector General rather than to the Securities and Exchange Commission or Department of Justice, which should be involved in any serious insider trading investigation. Those three sentences read as follows: “Additionally, we are disappointed that the Federal Reserve has refused to provide additional information regarding the full scope of the trading scandal…” The use of the word, “refused” has a strong aroma of obstruction. Next is the sentence: “…we also repeat our request for your cooperation with members of Congress and the Federal Reserve’s Office of the Inspector General as we seek to understand the full depth of the Fed’s trading scandal.” The use of the words “repeat our request for your cooperation” strongly infers that Fed Chairman Powell has withheld his cooperation. And, finally, there is this sentence: “Recent reports also reveal that the Federal Reserve failed to require updated financial disclosures from the former presidents of the Dallas and Boston Reserve Banks upon termination of their positions, which is inconsistent with the financial disclosure requirements for Board officials.” That last sentence refers to Robert Kaplan, the President of the Dallas Fed, and Eric Rosengren, the President of the Boston Fed, both of whom announced on September 27 of last year that they would be stepping down as the trading scandal drew public outrage.