Washington’s Blog 
April 12, 2013
Congressman Alan Grayson wrote the following letter to the Chairman of the Committee on Oversight and Government Reform (Darryl Issa) today:
I respectfully request an *investigation of the Federal Reserve leak of the Federal Open Market Committee (FOMC) minutes on April 9 and 10, 2013. According to Bloomberg News, the list of individuals who received the information included staff at Barclays PLC, BB&T Corp., BNP Paribas SA, Capital One Financial Corp., Fifth Third Bancorp, HSBC Holdings PLC, Nomura Holdings Inc., PNC Financial Services Group Inc., Regions Financial Corp., U.S. Bancorp, UBS AG and Wells Fargo & Co.
I have long been concerned about the Federal Reserve’s management of sensitive market-moving information. One example of blatant information “asymmetry” is the five-year lag before FOMC meeting transcripts are released to the public. As the Huffington Post reported in 2012, “Many of those people have since left the central bank and gone to work in the financial industry, taking with them privileged information about the Fed’s thinking that is still closed to the public.” [Here’s the HuffPost article .] This includes Susan Bies, who is now a board member at Bank of America; Laurence Meyer, who founded Macroeconomic Advisors; and Brian Madigan, who is now at Barclays.
Some relevant questions to consider during your investigation include:
1) Who specifically received this information early?
2) Did any insider trading result from this leak?
3) Did Goldman Sachs release a note encouraging clients to short gold [see this  andthis ; Goldman’s note says: “We recommend initiating a short COMEX gold position ….”] right after receiving the leak information, due to the leak itself? Who else might have profited from the early release of this information?
4) What are the internal control procedures in place for the Federal Reserve to manage sensitive market-moving information? How did these procedures fail?
5) Why does the Federal Reserve continue to withhold the transcripts of FOMC meetings secret for five years, when there are many people who have been present at those meetings who have moved on to private sector employment within that blackout period?
Nobel prize winning economist Joseph Stiglitz agrees, saying that the World Bank would view any country which had a banking structure like the Fed as being corrupt and untrustworthy .
The non-partisan Government Accountability Office calls the Fed corrupt and riddled with conflicts of interest , and that insiders can get very rich by stay close to the Fed.
We noted  last year:
Let’s start by looking at what information was revealed in response to the previous,watered-down version of Ron Paul’s Fed audit bill:
- The Fed gave huge bailouts to foreign banks , including Gaddafi’s Libyan bank, the Arab Banking Corp. of Bahrain, and the Banks of Bavaria, Korea and Mexico 
- The Fed bailed out hedge funds, McDonald’s and Harley-Davidson 
- The Fed threw money at “several billionaires and tens of multi-millionaires” , including Christy Mack, the wife of Morgan Stanley’s John Mack, billionaire businessman H. Wayne Huizenga, and Michael Dell, co-founder of Dell Computer, hedge fund manager John Paulson and private equity honcho J. Christopher Flowers ***
As Senator Sanders noted  last October:
A new audit of the Federal Reserve released today detailed widespread conflicts of interest involving directors of its regional banks.
“The most powerful entity in the United States is riddled with conflicts of interest,” Sen. Bernie Sanders (I-Vt.) said after reviewing the Government Accountability Office  report. The study required by a Sanders Amendment to last year’s Wall Street reform law examined Fed practices never before subjected to such independent, expert scrutiny.
The GAO detailed instance after instance of top executives of corporations and financial institutions using their influence as Federal Reserve directors to financially benefit their firms, and, in at least one instance, themselves. “Clearly it is unacceptable for so few people to wield so much unchecked power,” Sanders said. “Not only do they run the banks, they run the institutions that regulate the banks.”
The corporate affiliations of Fed directors from such banking and industry giants as General Electric, JP Morgan Chase, and Lehman Brothers pose “reputational risks” to the Federal Reserve System, the report said. Giving the banking industry the power to both elect and serve as Fed directors creates “an appearance of a conflict of interest,” the report added.
The 108-page report found that at least 18 specific current and former Fed board members were affiliated with banks and companies that received emergency loans from the Federal Reserve during the financial crisis.
[T]here are no restrictions in Fed rules on directors communicating concerns about their respective banks to the staff of the Federal Reserve. It also said many directors own stock or work directly for banks that are supervised and regulated by the Federal Reserve. The rules, which the Fed has kept secret, let directors tied to banks participate in decisions involving how much interest to charge financial institutions and how much credit to provide healthy banks and institutions in “hazardous” condition. Even when situations arise that run afoul of Fed’s conflict rules and waivers are granted, the GAO said the waivers are kept hidden from the public.
(Indeed, the Fed routinely allows favored bankers to make billions of dollars from inside information .)