Ripped from the pages of "House Of Cards," it appears that the asking of difficult questions of she-that-shall-be-obeyed is entirely unacceptable to Janet Yellen and her Fed.
In March - the last Q&A session post-FOMC statement, Dow Jones reporter Pedro da Costa dared to ask about The Fed's leaking of crucial details about FOMC decisions to a newsletter and its subsequent refusal to comply with Congressional demands for those details.
The difficult question starts at around 45:30 - look at Yellen's face when asked the question for a clue as to her next move.
PEDRO DA COSTA. Pedro da Costa with Dow Jones Newswires. I guess I have two follow-ups, one with regard to Craig’s question. So, before the IG’s investigation, according to Republican Congressman Hensarling’s letter to your office, he says that, “It is my understanding that although the Federal Reserve’s General Counsel was initially involved in this investigation, the inquiry was dropped at the request of several members of the FOMC.” Now, that predates the IG. I want to know if you could tell us who are these members of the FOMC who struck down this investigation? And doesn’t not revealing these facts kind of go directly against the sort of transparency and accountability that you’re trying to bring to the central bank?
CHAIR YELLEN. That is an allegation that I don’t believe has any basis in fact. I’m not going to go into the details, but I don’t know where that piece of information could possibly have come from.
PEDRO DA COSTA. If I could follow up on his question. I think when you get asked about financial crimes and the public hears you talk about compliance, you get a sense that there’s not enough enforcement involved in these actions, and that it’s merely a case of kind of trying to achieve settlements after the fact. Is there a sense in the regulatory community that financial crimes need to be punished sort of more forcefully in order for them to be—for there to be an actual deterrent against unethical behavior?
CHAIR YELLEN. So, the—you’re talking about within banking organizations? So, the focus of regulators—the banking regulators—is safety and soundness, and what we want to see is changes made as rapidly as possible that will eliminate practices that are unsafe and unsound.
We can’t—only the Justice Department can bring criminal action, and they have taken up cases where they think that that’s appropriate. In some situations, when we are able to identify individuals who were responsible for misdeeds, we can put in place prohibitions that bar them from participating in banking, and we have done so and will continue to do so.
True... and the Justice Department can also bring a criminal probe for leaks at the Fed itself as was disclosed shortly after the above exchange, a probe which may very well implicate anyone, including Janet herself hence her eagerness to avoid any "touchy" questions today.
Social media had already asked whether Mr. da Costa would be allowed back:
The big FOMC Question today: will Janet take questions from @pdacosta after he was a big meanie recently?— Volatility B$ (@nelson3748) June 17, 2015
And his response:
As a result of all this, Mr. da Costa - with no apparent reason given - was not 'invited' to today's FOMC Press Conference (but had a request of his fellow press corps):
Fellow Fed reporters: Not attending today's press conference but please don't forget to press Yellen on handling of possibly-criminal leak.— Pedro da Costa (@pdacosta) June 17, 2015
But why would they if merely asking the almighty Yellen what the state of the Fed's now officially criminal investigation, is enough to get them barred?
As a reminder, two weeks ago we reported the Committee on Financial Services subpoenaed the Fed for records related to the central bank’s review. The Fed declined to comply in full citing the ongoing criminal investigation. More specifically, Yellen says the OIG has advised the Fed that providing access to the information requested by congress would risk "jeopardizing the investigation." As in "Yellen refused to comply."
the Fed says it cannot comply with a Congressional subpoena regarding an alleged leak due to the fact that producing the requested documents could ultimately result in... a leak.
Of course this could all be coincidence, but do we know if any other reporters who have been dis-invited? Is there a room constraint that means a Dow Jones reporter is squeezed out by BuzzFeed or TMZ?
And now back to praising the freedom of speech and press in the land with the great and almighty First Amendment... which is granted to everyone as long as they remember to never actually use it.
That, and of course hearing the "questions" of that other WSJ/Dow Jones staffer, Jon Hilsenrath, who will surely be present and maybe ask Yellen for a follow up to his legendary op-ed asking why US consumers are so "stingy" despite 7 years of Fed central planning and "wealth effect."