Friday, March 19, 2010

Appeals Court Orders the Fed to Comply With Bloomberg News FOIA Request.

THIS IS HUGE:  Last year Bloomberg News filed a Freedom Of Information Act (FOIA) request for documents related to bank borrower use of the Fed discount window and other programs.  The Fed denied the request and Bloomberg filed a lawsuit.  Fox News piled onto to this lawsuit.  A lower court granted Bloomberg's request and, of course, the Fed filed an appeal.  The Fed's lame argument was that disclosing this information would be less likely to use the discount window if they knew their use would be disclosed. (Credit goes to my friend and colleague Andy for alerting me to the headlines when they hit the newswire)

Quite frankly, I can't think of a more vacuous, flagrantly fatuous argument for justifying the Fed's refusal of Bloomberg's FOIA request.  Stunningly unintelligent.  And today, Judge Dennis Jacob agreed with me.

Today, the U.S. 2nd Circuit Court of Appeals upheld the lower court ruling, saying: 
"The requirement of disclosure under FOIA and its proper limits are matters of congressional policy," U.S. Circuit Judge Dennis Jacobs wrote in the Bloomberg decision. "The statute as written by Congress sets forth no basis for the exemption the Board asks us to read into it. If the Board believes such an exemption would better serve the national interest, it should ask Congress to amend the statute." Here's the article:  WSJ Link
Although I'm not a lawyer, and although I believe that the way this decision is written the Supreme Court will not review it, I do expect the Fed to file for the Supreme Court to rule on this and possibly file for stay of the decision pending SCOTUS review. This would force a delay of executing today's court order if for some reason the stay is granted. I doubt SCOTUS would overturn this decision, since the judge stated that Congress would need to change the law.  Given how much money the Fed is spending to fight Congress from passing greater transparency and audit laws, I would suspect the Fed will throw up as many roadblocks as it can legally invoke in order to avoid complying with this court order. It's really a shame how sinister and corrupt our system has become.

The court also ordered further searches of lending records held at regional Federal Reserve banks "that are considered administrative records of the Fed board." The judge gave the Fed leeway to fight the disclosure of those searches pending court review.

This whole situation stinks of Bernanke and his Fed counsel, Kevin Warsh, doing what they can to fight transparency and full, legally required disclosure of Fed activities.  I am still appalled that Bernanke had the balls to get up in front Congress and ask for even MORE oversight power at the same time as it was being revealed that HIS Fed and Geithner's NY Fed had full knowledge of Lehman's fraudulent use of Repo 105. As my colleague Jesse pointed out yesterday, Bernanke may wish he had pleaded the 5th to any questions dealing with that matter IF Congress has the determination to find out The Golden Truth.


  1. The Fed will just ignore this order until the American Cattle forget about it. Nothing will CHANGE.

  2. At this point all the Fed can do is try to throw up procedural roadblocks. That is, unless their counsel volunteers to spend some time in jail for contempt of court...

  3. It's a bit OT for today, but I sometimes wonder why nobody is worried about that Yamashita gold. I am now reading that book ("Gold Warriors"). I would not say that gold is gone, on the contrary. Via Australia it seems to go directly to London. Hasn't anyone read this book? The Seagraves have plenty of documents about the whole "legend" - which might be no legend. How comes that nobody is concerned about this potential supply ad infinitum?

  4. The CONgress will amend the law, probably in the health care bill, to make this null and void. Oh so close!

  5. Fauvi, I've never seen definitive proof that it's real and I have always dismissed it as urban legend. I know of the book you are reading but do not know anyone who's read it. Books have been written about the existence of Bigfoot and the Loch Ness Monster and I've never seen satisfactory evidence either is real.

    Having said that, if we assume it's real, my guess is that it will stay safely tucked away by whatever dynastic family now controls it. Remember: he who controls the gold makes the rules. Maybe the Rothschilds control it - if it's real. They make a lot of the rules by which we operate.

    In other words, even if it were real, it will never hit the market, especially if we go back to a global gold standard, which is my view.