Fed Refuses to Disclose Recipients of $2 Trillion

(Okay.  Everyone in Congress and the White House, empty your pockets.)

Fed Refuses to Disclose Recipients of $2 Trillion (Update1)

By Mark Pittman

Dec. 12 (Bloomberg) -- The Federal Reserve refused a request by Bloomberg News to disclose the recipients of more than $2 trillion of emergency loans from U.S. taxpayers and the assets the central bank is accepting as collateral.

Bloomberg filed suit Nov. 7 under the U.S. Freedom of Information Act requesting details about the terms of 11 Fed lending programs, most created during the deepest financial crisis since the Great Depression.

The Fed responded Dec. 8, saying it's allowed to withhold internal memos as well as information about trade secrets and commercial information. The institution confirmed that a records search found 231 pages of documents pertaining to some of the requests.

"If they told us what they held, we would know the potential losses that the government may take and that's what they don't want us to know," said Carlos Mendez, a senior managing director at New York-based ICP Capital LLC, which oversees $22 billion in assets.

The Fed stepped into a rescue role that was the original purpose of the Treasury's $700 billion Troubled Asset Relief Program. The central bank loans don't have the oversight safeguards that Congress imposed upon the TARP.

Total Fed lending exceeded $2 trillion for the first time Nov. 6. It rose by 138 percent, or $1.23 trillion, in the 12 weeks since Sept. 14, when central bank governors relaxed collateral standards to accept securities that weren't rated AAA.

'Been Bamboozled'

Congress is demanding more transparency from the Fed and Treasury on bailout, most recently during Dec. 10 hearings by the House Financial Services committee when Representative David Scott, a Georgia Democrat, said Americans had "been bamboozled."

Bloomberg News, a unit of New York-based Bloomberg LP, on May 21 asked the Fed to provide data on collateral posted from April 4 to May 20. The central bank said on June 19 that it needed until July 3 to search documents and determine whether it would make them public. Bloomberg didn't receive a formal response that would let it file an appeal within the legal time limit.

On Oct. 25, Bloomberg filed another request, expanding the range of when the collateral was posted. It filed suit Nov. 7.

In response to Bloomberg's request, the Fed said the U.S. is facing "an unprecedented crisis" in which "loss in confidence in and between financial institutions can occur with lightning speed and devastating effects."

Data Provider

The Fed supplied copies of three e-mails in response to a request that it disclose the identities of those supplying data on collateral as well as their contracts.

While the senders and recipients of the messages were revealed, the contents were erased except for two phrases identifying a vendor as "IDC." One of the e-mails' subject lines refers to "Interactive Data -- Auction Rate Security Advisory May 1, 2008."

Brian Willinsky, a spokesman for Bedford, Massachusetts- based Interactive Data Corp., a seller of fixed-income securities information, declined to comment.

"Notwithstanding calls for enhanced transparency, the Board must protect against the substantial, multiple harms that might result from disclosure," Jennifer J. Johnson, the secretary for the Fed's Board of Governors, said in a letter e-mailed to Bloomberg News.

'Dangerous Step'

"In its considered judgment and in view of current circumstances, it would be a dangerous step to release this otherwise confidential information," she wrote.

New York-based Citigroup Inc., which is shrinking its global workforce of 352,000 through asset sales and job cuts, is among the nine biggest banks receiving $125 billion in capital from the TARP since it was signed into law Oct. 3. More than 170 regional lenders are seeking an additional $74 billion.

Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson said in September they would meet congressional demands for transparency in a $700 billion bailout of the banking system.

The Freedom of Information Act obliges federal agencies to make government documents available to the press and public. The Bloomberg lawsuit, filed in New York, doesn't seek money damages.

'Right to Know'

"There has to be something they can tell the public because we have a right to know what they are doing," said Lucy Dalglish, executive director of the Arlington, Virginia-based Reporters Committee for Freedom of the Press.

"It would really be a shame if we have to find this out 10 years from now after some really nasty class-action suit and our financial system has completely collapsed," she said.

The Fed lent cash and government bonds to banks that handed over collateral including stocks and subprime and structured securities such as collateralized debt obligations, according to the Fed Web site.

Borrowers include the now-bankrupt Lehman Brothers Holdings Inc., Citigroup and New York-based JPMorgan Chase & Co., the country's biggest bank by assets.

Banks oppose any release of information because that might signal weakness and spur short-selling or a run by depositors, Scott Talbott, senior vice president of government affairs for the Financial Services Roundtable, a Washington trade group, said in an interview last month.

'Complete Truth'

"Americans don't want to get blindsided anymore," Mendez said in an interview. "They don't want it sugarcoated or whitewashed. They want the complete truth. The truth is we can't take all the pain right now."

The Bloomberg lawsuit said the collateral lists "are central to understanding and assessing the government's response to the most cataclysmic financial crisis in America since the Great Depression."

In response, the Fed argued that the trade-secret exemption could be expanded to include potential harm to any of the central bank's customers, said Bruce Johnson, a lawyer at Davis Wright Tremaine LLP in Seattle. That expansion is not contained in the freedom-of-information law, Johnson said.

"I understand where they are coming from bureaucratically, but that means it's all the more necessary for taxpayers to know what exactly is going on because of all the money that is being hurled at the banking system," Johnson said.

The Bloomberg lawsuit is Bloomberg LP v. Board of Governors of the Federal Reserve System, 08-CV-9595, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporters on this story: Mark Pittman in New York at mpittman@bloomberg.net;

Last Updated: December 12, 2008 11:35 EST

• Fed Refuses to Disclose Recipients of $2 Trillion - Marmann

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on federal lobbying.  This makes me furious at both the companies and the government.  ARGH!

http://www.foxnews.com/politics/2009/04/22/bailed-firms-money-lobbying/

Obama Blows Off Medal of Honor Recipients... Not Exactly

Scott Isaacs on Fri Jan 23, 2009 9:10 AM EST

According to TSO who was at the “Salute to Heroes Inaugural Ball”, this newly sworn-in President for the first time in 56 years blew off the ball (that’s 14 Inaugurations).

Some background on the ball;

The American Legion sponsors the ball, which recognizes recipients of Medal of Honor, the nation’s highest military award. It started in 1953 for President Dwight D. Eisenhower’s first inauguration.

Event co-sponsors include 13 other veterans service organizations, among them the Military Order of the Purple Heart and the Paralyzed Veterans of America.

So where was our new President instead of honoring Medal of Honor recipients who by some miracle are still alive? According to Huffington Post, this was his schedule for Inaugural celebrations;

Later that day, the Presidential Inaugural Committee will host 10 official inaugural balls:

— Neighborhood Inaugural Ball at the Washington Convention Center.

— Obama Home States (Illinois and Hawaii) Inaugural Ball at the Washington Convention Center.

— Biden Home States (Pennsylvania and Delaware) Inaugural Ball at the Washington Convention Center.

— Midwest Inaugural Ball at the Washington Convention Center.

— Mid-Atlantic Inaugural Ball at the Washington Convention Center.

— Western Inaugural Ball at the Washington Convention Center.

— Commander in Chief’s Ball at the National Building Museum.

— Southern Inaugural Ball at the National Guard Armory.

— Eastern Inaugural Ball at Union Station.

— Youth Inaugural Ball at the Washington Hilton.

Unofficial balls include:

— Congressional Black Caucus Inaugural Ball at the Capitol Hilton.

— Creative Coalition Inaugural Ball at the Harman Center for the Arts.

— Recording Industry Association of America’s ball for Feeding America.

— BET’s Inaugural Ball at the Mandarin Oriental Hotel.

— Africa on the Potomac inaugural celebration at Crystal Gateway Marriott in Arlington, Va.

— American Music Inaugural Ball at the Marriott Wardman Park Hotel.

— Inaugural Purple Ball at the Fairmont Hotel.

— Human Rights Campaign’s Equality Ball at the Renaissance Mayflower Hotel.

— Inaugural Peace Ball at the Smithsonian National Postal Museum.

— Impact Film Fund ball.

Mr. Wolf from Blackfive sends along this link to which Inaugural Balls Obama actually attended last night.

Source

Blackfive, which I read occasionally for military pieces, confirmed that President Obama did not come to the inaugural ball. So I became curious because the only two sources were two blogs and one source that consisted of initials. Therefore, I did what any rational person would do: I contacted the American Legion to get the straight story from the people who would know. I was put in contact with a very pleasant gentleman named Craig Roberts who is the American Legion's Media Relations Manager and after our conversation he e-mailed me this statement which I will include in its entirety:

In answer to your inquiry:

The American Legion, as it has on every inauguration evening since 1953, hosted the Salute to Heroes Inaugural Banquet & Ball on January 20th. The quadrennial event is co-sponsored with fourteen veterans service and military service organizations and honors recipients of the Medal of Honor. Forty-seven of these heroes attended this year’s event which was held in the Renaissance Washington DC Hotel.

President Obama was invited but did not attend. Vice-President Joe Biden did appear, however, and was very warmly received. The new President’s absence was understandable considering the unprecedented logistical challenges presented by the vastly increased number of visitors to this inauguration and the necessary attendant security measures. The American Legion, as an organization, does not feel offended or “snubbed.”

Thank you,

Craig Roberts

Media Relations Manager

The American Legion

1608 K Street, NW

Washington, DC 20006

202.263.2982 (direct)

First of all, I would like to thank Mr. Roberts for taking my call and taking the time to compose this statement so that I can share it on behalf of the American Legion. So to those fellow Obama supporters that think this ball did not happen, it did. It was omitted from the media outlets it was omitted from because of logistical challenges due to the extraordinary number of people that flooded Washington D.C. to see Barack Obama be inaugurated as the 44th president and it is not yet on the American Legion's website (as I type this at 8:30 A.M. on 1-23-09) because of some difficulties in updating the website. However, there will be media coverage of the event forthcoming.

I have found out also that the likely reason that Barack Obama attended the auxiliary balls that he did is because six of the balls that he attended were held in the same building. Therefore, attending those balls and the others that he attended were the most efficient with regards to security. It is no secret that President Obama has had questions surrounding his security, that is evident by observing that he was the earliest presidential candidate ever to get a security detail. If the Secret Service felt it prudent to guard him so early in the campaign can the reader imagine what the Secret Service feels is prudent now that he is the President of the United States?

The most likely reason that President Obama did not go to the "Salute to Heroes" inaugural ball is because it was held in the Renaissance Hotel which consists of 16 floors. There was an event called the "Illinois Party - Presidential Event" held at the Renaissance the night before that the then-President-elect did not attend either (I have a call in to the President's press office asking for confirmation of this information which was given to me by one of my sources for this story). Given the amount of time and resources it would have taken to clear a 16 floor hotel as well as protect it while President Obama was inside, I can only guess that he was advised by his Presidential Protection Detail not to attend either inaugural ball because of the building and the inherent problems in securing and then protecting it. The sheer number of people crowding the streets and staying in the hotel surely presented a formidable screening problem as well. But, there's your story... it's not as sexy as "Barack Obama Hates The Military" but it is the truth as best I can tell after talking to the organization responsible for hosting the event and doing some research and educated guesswork about why a security team wouldn't want to protect a principal in the Renaissance with more than 2 million extra people in Washington D.C.

Update: It would appear that, according to Stars & Stripes that Obama had some Medal of Honor recipients at an inaugural ball that he attended. This gives the number of living Medal of Honor recipients as 99, but I believe that two have passed away since that number was compiled leaving 97. There are 7 in this picture and there were 47 at the American Legion inaugural event. I'm curious if there were more at the event this photo was taken at.

Further update: I received an e-mail from Mr. Roberts today (which I would have gotten yesterday if I had not miscommunicated my e-mail address to him) with his original statement along with a new statement. I will include both statements in their entirety:

My statement on behalf of our National Adjutant, Dan Wheeler:

"The American Legion, as it has on every inauguration evening since 1953, hosted the Salute to Heroes Inaugural Banquet & Ball on January 20th . The quadrennial event is co-sponsored by fourteen veterans service and military service organizations and honors recipients of the Medal of Honor. Forty-seven of these heroes attended this year's event. President Obama was invited but did not attend. Vice-President Joe Biden did appear, however, and was very warmly received. From The American Legion's point of view, the new President's absence was understandable considering the unprecedented logistical challenges presented by the vastly increased number of visitors to this inauguration and the necessary attendant security measures. The National Adjutant of The American Legion states that, as an organization, The Legion does not feel offended or "snubbed" by the President's failure to appear."

Mr. Wheeler's message as of noon today (January 26):

"We extended an invitation as we always do. There are numerous Balls and we know he can't attend them all. Of course, we would have loved for him to make an appearance, but he didn't. It's a logisticalnightmare. He did meet with the troops at the Commander In Chief's Ball, and we are grateful for that. Our Ball wasn't about the President; it was about the Medal of Honor recipients and the veterans and families who were there. We are grateful that the Vice President appeared, and our guests were very appreciative.

"That having been said, there are much more important issues to dwell on, which we intend to do. We look forward to working with the new administration on ensuring full and guaranteed funding for VA health care services, and the very best treatment for our service people who have been wounded, and on the quality of life of all members of the Armed Forces and their families, as well as the maintenance of a national security force that will deter any enemy from considering an attack on America."
    

This again from the McClatchy news group, which is not conservative by any means:

http://www.mcclatchydc.com/227/story/65195.html