GAO Audit Exposes Fed's Corruption Once Again
Today, in addition to the official launch of Europe's PPT, we get a reminder that our own version, the Federal Reserve, is as criminal and corrupt as always, especially when working in conjunction with that old standby, Goldman Sachs. Just like back in 2009 and 2010 it was discovered that former Goldman director and New York Fed Chairman Stephen Friedman had bought tens of thousands of shares of Goldman stock while the entire system was being bailed out by the very same Fed, so today we learn that another former Goldmanite and then Plunge Protection Head team (i.e., Brian Sack predecessor) Bill Dudley had held shares of AIG stock while the Fed was arranging the bailout of the doomed insurer. But it's all good: Dudley had a waiver. Mostly likely signed by his then boss and former Goldman coworker Friedman. We wonder if it was Dudley who signed Friedman's waiver? From Bloomberg: "The Federal Reserve Bank of New York’s William C. Dudley got a waiver in 2008 to keep personal financial holdings of American International Group Inc. (AIG) after the company received a Fed rescue, a U.S. senator said. Dudley, who was the New York Fed’s markets-group chief at the time and is now the bank’s president, is the senior New York Fed official identified in a Government Accountability Office report today as receiving the waiver, Senator Bernard Sanders, a Vermont Independent, said today in a statement. Jack Gutt, a New York Fed spokesman, declined to comment." Of course, when one is from Goldman, one does not care about the glaring impropriety of one's actions. After all, one rules the world. And speaking of Bernie Sanders, he earlier tore the Fed a new one, after he released details of the Fed's GAO audit and took every opportunity to make his opinion on the master criminals well-known: "As a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world," he said. "This is a clear case of socialism for the rich and rugged, you're-on-your-own individualism for everyone else." Well, didn't everyone know that by now?
More from the Hill:
The Government Accountability Office (GAO) released its top-to-bottom audit of the Fed Thursday, opening the central bank to fresh criticism from the lawmaker that had pushed for the audit in the first place.
The GAO was directed to conduct the audit by a provision in the Dodd-Frank financial reform law pushed by Independent Sen. Bernie Sanders (Vt.).
The GAO found that the Fed awarded $659.4 million of contracts to private parties during the crisis to help facilitate those emergency moves.
Eight of the 10 largest contracts were awarded on a noncompetitive basis. While such a "no-bid" contract is consistent with the Fed's policies, the GAO said those policies could be improved to pursue competition whenever possible and limit the length of any noncompetitive agreements.
The GAO also found that while the Fed had policies in place to avoid conflicts of interests for its employees, those could also be improved.
In particular, the new roles taken on by the Federal Reserve Bank of New York and its employees during the crisis increased the chance for potential conflicts that were not addressed in existing policies.
Sanders grilled the Fed on bailing out not so much American companies, as Dexia and a few other insolvent European monsters:
Sanders was highly critical of the Fed making emergency loans to foreign banks and corporations, which he said was an abuse of the Fed's power.
"No agency of the United States government should be allowed to bail out a foreign bank or corporation without the direct approval of Congress and the president," he said.
Sanders went on to criticize the Fed for its policies regarding conflicts of interest, saying that waivers provided to employees allowed them to keep investments in financial institutions and companies that received Fed loans.
As a prominent example, he pointed out that the chief executive officer of JPMorgan Chase was on the New York Fed's board of directors at the same time the firm was receiving more than $390 billion in Fed assistance. The firm also helped clear loans for the Fed during its emergency lending.
"No one who works for a firm receiving direct financial assistance from the Fed should be allowed to sit on the Fed's board of directors or be employed by the Fed," said Sanders.
At the end of the day we get yet more huffing, more puffing, while the status quo takes its taxpayer funded check to the bank even as 90% of the population turns to cannibalism. But at least the starving serfs have iPads and prime time Dancing with the Stars, complete with commercial breaks for GE products - at least they will eat each other in a happy dazy of temporarily induced frontal lobotomy.
Just like the status quo likes it.
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