U.S. Senator Elizabeth Warren rebuked Federal Reserve Chair Jerome Powell for withholding information on trading by central bank officials during the pandemic and said an investigation into the matter by the Fed's inspector general was "troubling."
The IG report "raises new concerns about the reasons why you continue to withhold key information about Fed officials' financial trading activity from Congress and the public," the Massachusetts Democrat said in a letter to Powell released Thursday.
Warren –- a member of the Senate Banking Committee that has Fed oversight authority — also sent letters to all 12 reserve banks asking for securities transaction records for all senior officials since Jan. 1, 2020, giving the banks an Aug. 25 deadline.
Spokespeople for the Federal Reserve Board of Governors and the Dallas Fed declined to comment.
Warren's request to the Board and reserve banks marks growing dissatisfaction with the central bank's responses to its main oversight body in Congress. This week Republican members of the Senate Banking Committee, in response to a separate matter in which the Fed refused to share documents with lawmakers, vowed to create legislation that will compel the Fed to disclose certain information to Congress.
Though Republicans and Democrats have sought different information from the Fed, both sides have expressed frustration at being stonewalled following repeated requests.
2020 Trading
Warren's criticism centers around financial disclosures for 2020 that revealed trading by some officials during a time when the Fed was intervening in nearly every significant credit market to try and buffer the economic downturn brought on by the pandemic.
The reserve bank officials included Dallas Fed President Robert Kaplan and Boston Fed President Eric Rosengren, who have since resigned.
"My ongoing concerns about the culture of corruption at the Fed have become more extensive with each new revelation, and with each additional failure by the Fed to provide the information needed by Congress and the public," Warren wrote.
While the 12 reserve banks are exempt from Freedom of Information Act requests, including from lawmakers, the Board is not.
Warren and Republican Senator Pat Toomey both said they have requested information from the Board directly multiple times and haven't received what they deem appropriate responses. Senate Banking Committee members have expressed interest in making reserve banks subject to FOIA.
"Unfortunately, obstructionism has become too common a response from the Fed and regional Fed banks — which, after all, are creatures of Congress — to congressional oversight inquiries from members in both parties," 11 Republican members of the committee wrote in an Aug. 9 letter to Powell.
