A report recently conducted by the Government Accountability Office (GAO) and officially released by Senator Bernie Sanders (I-Vermont) has a lot of Americans angry about the problematic functioning of the Fed. Despite the fiscal struggles plaguing America, the Fed has been handing out trillions of dollars companies with CEOs also working for the Fed.
The cases involve some serious conflicts of interest and strong bias to say the least.
Shortly after the 2008 financial meltdown, the Fed allocated more than $4 trillion in near zero-interest loans to banks and businesses whose executives also served as directors for the national bank. The report reveals that at least 18 Fed regional bank directors, both current and former, “had a direct stake in the trillion-dollar bailout given to teetering institutions.”
Senator Sanders had a provision in the Dodd-Frank Wall Street Reform Act which required the GAO to investigate the Fed for any possible conflicts of interest regarding bailout money. Three days ago, Sanders exposed the names of those who received special treatment when it came to Fed hand-outs...
Sanders seeks to end this irresponsible behavior once and for all. Regarding the report findings, he said:
"This report reveals the inherent conflicts of interest that exist at the Federal Reserve. At a time when small businesses could not get affordable loans to create jobs, the Fed was providing trillions in secret loans to some of the largest banks and corporations in America that were well represented on the boards of the Federal Reserve Banks. These conflicts must end.”
In May, Sanders initiated legislation that would deny the banking industry and business executives the ability to hold directors positions within the Fed's 12 regional banks.
In attempt to get his proposal approved, Sanders shed light on this perfect example of a major conflict of interest. Jamie Dimon, CEO of JPMorgan Chase and a director of the Federal Reserve Bank of New York since 2007. He played a significant role in the Fed's leadership team when it voted on a $391 billion emergency fund for JPMorgan Chase in order to help it manage the mayhem on Wall Street.
But the Dimon example stands far from alone...
The CEO of General Electric, Jeffrey Immelt, participated in a similar situation. Immelt was part of the New York Federal Reserve when it began the Commercial Paper Funding Facility – that funding facility conveniently lent $16 billion to General Electric.
To repeat the same full-length story with slightly altered dollar-amounts each time becomes tedious, but let it be known that the examples don't end there. Current and former CEOs of SunTrustBanks, Citigroup, Popular Inc., Webster Bank, Wilmington Trust, PNC, Texas Capital Bank, CitiBank, Marshall & Ilsley, Old National Bancorp., KeyCorp, State Street Corporation, Lehman Brothers, and a Goldman Sach board of directors member all engaged in behavior mimicking that of the examples listed above.
-SunTrustBanks received $7.5 billion
-Citigroup received $2.5 trillion
-Popular Inc. received $1.2 billion
-Webster Bank received $550 million
-Wilmington Trust received $3.2 billion
-PNC received $6.5 billion
-Texas Capital Bank received $2.3 billion
-CitiBank received $21 billion
-Marshall & Ilsley received $21 billion
-Old National Bancorp. received $550 million
-KeyCorp received $40 billion
-State Street Corporation received $42 billion
-Lehman Brothers received $183 billion
It's nice to know someone is taking action to crack down on sleazy Fed behavior, especially during these turbulent economic times where small businesses are dying because they can't afford loans and the employment rate is plummeting in consequence.
Bailout money shouldn't be based on bias, especially when it's taxpayer money paying for those big banks' failures.