Score one for Bloomberg in its lawsuit seeking to force the federal government to disclose who it’s bailing out with trillions of our dollars. Yes, the federal government has—incredibly—been trying to conceal that.
Dean Starkman and I have been following this story for nine months now, and I’d like to raise a glass (of orange juice—it’s only ten in the morning, people) to Bloomberg for its fortitude and to reporters Mark Pittman and Craig Torres for seeking the information. While you’re at it, tip one back for its massive profitability, which better enables it to do such things.
A federal judge in U.S. District Court ruled in favor of Bloomberg, saying the Federal Reserve must release the names of the entities it has lent money to. Bravo to Judge Loretta Preska, who ruled that the the Fed “improperly withheld” the records from Bloomberg.
The Fed has five days to give Bloomberg the records it found but didn’t turn over and has to also look for similar records at the New York Fed to turn over—though, presumably, it will delay this as long as it can with appeals.
Here’s Bloomberg’s Pittman, subject of an Audit Interview in February:
The Fed has refused to name the financial firms it lent to or disclose the amounts or the assets put up as collateral under 11 programs, most put in place during the deepest financial crisis since the Great Depression, saying that doing so might set off a run by depositors and unsettle shareholders. Bloomberg LP, the New York-based company majority-owned by Mayor Michael Bloomberg, sued on Nov. 7 on behalf of its Bloomberg News unit.
It’s unclear to me whether the ruling forces the Fed to disclose the collateral it has accepted in exchange for the loans. If it is, this is a huge story.
And anyway it’s good anytime the veil is lifted on the secretive and undemocratic Federal Reserve.
Meanwhile, a slap on the wrist to Bloomberg competitor Reuters, which files a story about the ruling but can’t be bothered to namecheck its competitor until the fifth paragraph.
I’ve got the judge’s ruling here (pdf) if you’d like to peruse it.
UPDATE: Reuters’ columnist Matthew Goldstein gave Bloomberg much more credit:
A big tip of the hat also goes to Bloomberg News for pursuing this lawsuit, after the Fed denied the media outlet’s Freedom of Information Act request seeking the loan information. Thanks to Bloomberg, the public’s right to know all the ins-and-outs of the federal government’s effort to bailout the banks has been preserved.