—The full federal appeals court in New York refused to reconsider a lower court ruling ordering the Fed’s board of governors to release records of the unprecedented $2 trillion in U.S. emergency loan programs used in 2008 to shore up the nation’s collapsing financial system, programs that continue—in secrecy—to this day.
The decision brings closer the day when the public will learn exactly which banks benefited from these central bank loans and exactly what toxic assets and other unholy junk they used to secure them. It seems shocking that, even today, we still don’t know.
The suit was brought by Bloomberg LP and is a credit to that organization. Its victory in this case will be a huge win for the public, the ultimate lender here. We’re particularly gratified by the suit’s progress at The Audit because it was spurred by the reporting of Mark Pittman, one of the great investigative reporters of the crisis era and a friend of ours, who died unexpectedly in the fall.
According to Bloomberg, the suit could be headed for the Supreme Court as one of the defendants, the Clearing House Association LLC, a group of 20 commercial banks, has already said it will appeal.
While the Fed and the banks may succeed in dragging out the process, they are running out of options. In a sense, Pittman is still dogging them.
For further reading, Ryan Chittum’s May 2009 interview with Pittman is here; the Bloomberg obit by Bob Ivry obit is here.
h/t Chris Roush.
—If you didn’t catch the FT‘s nifty interactive graphic on banker pay the other day, it’s certainly worth checking out.
A lot of bankers took pay cuts, what with the political climate and all. But not Wells Fargo chief John Stumpf who doubled his pay to $18.8 million last year.
—And this LAT piece helpfully tracks gains by shareholder activists who are finally getting some moments in the sun in the wake of the financial crisis.
But they have found themselves riding a populist wave set off by the financial crisis. A crowning success of sorts came last month with the enactment of the federal financial reform law, which gives shareholders of every U.S. company a say on pay at least once every three years. The law also requires firms to “claw back” executive bonuses based on corporate earnings that turn out to be illusory.
Here’s an apt quote from a leading governance guru:
“They are often referred to as gadflies,” said Nell Minow, a corporate governance advocate at research firm Corporate Library. “But it’s important to remember that gadflies do get the animal to move.”
—Finally, think Goldman (formerly an Audit funder) has PR problems here? In China, Forbes reports, a well-known journalist has written book that says, among other things, that the bank “has the IQ of an Israeli Shar Pei Dog and the cruel nature of a Manchurian Tiger.” The original Chinese is in the Forbes piece, if you’re scratching your head over the Israeli Shar Pei thing.
Dean Starkman Dean Starkman runs The Audit, CJR’s business section, and is the author of The Watchdog That Didn’t Bark: The Financial Crisis and the Disappearance of Investigative Journalism (Columbia University Press, January 2014). Follow Dean on Twitter: @deanstarkman.