Tuesday, August 25, 2009
A New York District Judge has ordered the Federal Reserve to disclose the destination of around $2 trillion dollars in bailout funds after the Fed failed to convince the Judge that the records should be exempt from the Freedom of Information Act.
“Manhattan Chief U.S. District Judge Loretta Preska rejected the central bank’s argument that the records aren’t covered by the law because their disclosure would harm borrowers’ competitive positions. The collateral lists “are central to understanding and assessing the government’s response to the most cataclysmic financial crisis in America since the Great Depression,” according to the lawsuit that led to yesterday’s ruling,” reports Bloomberg, the news outlet that originally filed the lawsuit.
Citing the fact that the US taxpayer is an “involuntary investor” in the nation’s banks, Bloomberg argued that the risks behind the $2 trillion in lending needed to be made public.
“When an unprecedented amount of taxpayer dollars were lent to financial institutions in unprecedented ways and the Federal Reserve refused to make public any of the details of its extraordinary lending, Bloomberg News asked the court why U.S. citizens don’t have the right to know,” said Matthew Winkler, the editor-in-chief of Bloomberg News. “We’re gratified the court is defending the public’s right to know what is being done in the public interest.”
The Federal Reserve and Ben Bernanke in particular have attempted to hide the destination of the bailout funds at every step of the way since Bloomberg first filed the lawsuit over nine months ago.
During a hearing on Capitol Hill last month, Congressman Alan Grayson confronted Bernanke on which foreign banks had received around half a trillion dollars in credit swaps.
Bernanke responded, “I don’t know.”
“Half a trillion dollars and you don’t know who got the money?” asked Grayson.
It’s no surprise that the Fed is reticent to disclose who got the bailout funds, since the man appointed by Henry Paulson to dole out the ill-gotten gains was none other than his fellow ex-Goldman Sachs executive Neel Kashkari. This level of cronyism undoubtedly ensured that Bernanke and Paulson’s bankster gangster friends were well looked after.
“President elect Barack Obama, who in a September 22 campaign speech promised to “Make our government open and transparent so that anyone can ensure that our business is the people’s business,” refused to comment on the story when contacted by Bloomberg, which is no surprise considering the fact that the man who guaranteed “change” has indicated he will not only follow the Bush administration policy of a socialized financial system, but radically expand it,” we wrote in our original story on the lawsuit back in November.
That foresight has now manifested itself again today, with Obama set to nominate Ben Bernanke, one of the main architects of the bailout under Bush, as Fed chief for a second term.