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Promise of Transparency - Just Words ?

 March 05, 2009 01:46 PM
 


Under the Bush administration and Treasurer Hank Paulson details of how the tax payers money was (and is) being spent was being kept very secret. Only a handful of people have access to information on what the Government is accepting as collateral for giving companies our tax dollars.

Bloomberg filed suit under the ‘Freedom of Information Act' to obtain the information. The previous administration never acted on the suit. And now the Obama administration has responded and said "no".

From Bloomberg:

March 5 (Bloomberg) — The Federal Reserve Board of Governors receives daily reports on bailout loans to financial institutions and won't make the information public, the central bank said in a reply to a Bloomberg News lawsuit.

[Related -American International Group Inc (AIG): Current Weakness Offers A Buying Opportunity]

The Fed refused yesterday to disclose the names of the borrowers and the loans, alleging that it would cast "a stigma" on recipients of more than $1.9 trillion of emergency credit from U.S. taxpayers and the assets the central bank is accepting as collateral.

Fed secrecy was the focus of a Senate Banking Committee hearing today in which the panel's top two members said the central bank's reluctance to identify companies benefiting from the American International Group Inc. bailout risks undermining public confidence in the government.

"If the American taxpayer's money is at stake, and it is, big time, I believe the American taxpayers, the people, and this committee, we need to know who benefited, where this money went," said Senator Richard Shelby of Alabama, the committee's top Republican. "There is no transparency here. We are going to find out."

[Related -American International Group Inc (AIG): Buy This 'Hated' Company While It's Still An Incredible Bargain]

The bank provides "select members and staff of the Board of Governors with daily and weekly reports" on Primary Dealer Credit Facility borrowing, said Susan E. McLaughlin, a senior vice president in the markets group of the Federal Reserve Bank of New York in a deposition. The documents "include the names of the primary dealers that have borrowed from the PDCF, individual loan amounts, composition of securities pledged and rates for specific loans."(...)

Bloomberg sued Nov. 7 under the U.S.


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