Bloomberg’s David Reilly has a terrific column up today on the New York Federal Reserve and what’s wrong with its secrecy on the AIG bailout (and on everything else, for that matter).

Reilly kicks things off with a half-joke :

The idea of secret banking cabals that control the country and global economy are a given among conspiracy theorists who stockpile ammo, bottled water and peanut butter. After this week’s congressional hearing into the bailout of American International Group Inc., you have to wonder if those folks are crazy after all.

Wednesday’s hearing described a secretive group deploying billions of dollars to favored banks, operating with little oversight by the public or elected officials.

We’re talking about the Federal Reserve Bank of New York, whose role as the most influential part of the federal-reserve system — apart from the matter of AIG’s bailout — deserves further congressional scrutiny.

Yes it does. And it deserves further press scrutiny, too. I’d like to read some deep dives on the organization. It’s a tough nut to crack, no doubt. But if, say, CIA reporters can do this kind of thing, so can business reporters.

As concerns the financial press, Reilly’s would be the opposite tack of the anti-journalistic sentiment expressed in the FT’s Lex column yesterday, when it called for everyone to stop nosing around in the mess. Let’s hope this was some rogue columnist’s idea and not anything that might infect the pink paper’s news staff.

Because what Lex apparently doesn’t get is that this story isn’t just about AIG, it’s also about the Federal Reserve as an institution, and democracy itself. We’ve questioned many times the idea of giving the secretive, virtually unaccountable Fed more power in regulation reform. That’s not a Jacksonian anti-bank thing. It’s a fundamental press concern: advocating transparency and accountability. You can’t take tens of billions of taxpayer dollars (in addition to the hundreds already laid down), hand it to bankers, many of whom, as Reilly is excellent to point out, elected you to your position on the Fed and essentially control it, and then cover it up.

We quoted this Fed exec the other day, and Reilly points it out, too:

“I have to think this train is probably going to leave the station soon and we need to focus our efforts on explaining the story as best we can. There were too many people involved in the deals — too many counterparties, too many lawyers and advisors, too many people from AIG — to keep a determined Congress from the information.”

Think of the enormity of that statement. A staffer at a body with little public accountability and that exists to serve bankers is lamenting the inability to keep Congress in the dark.

We already know that the Fed told AIG (and the SEC, the pushovers!) to conceal its counterparties, which AIG thought it had to disclose, from investors in order to keep it from the press and Congress. The New York Fed’s former chief, now Treasury Secretary, Tim Geithner, tells the inspector general that “the financial condition of the counterparties was not a relevant factor” in the bailout. We also know that the New York Fed reacted to a FOIA request (to another agency, no less—the New York Fed as Reilly is excellent to point out, is exempt from FOIA, unlike the Fed itself!) from a reporter by denying it and increasing its secrecy. Here’s what the same Fed executive, James P. Bergin, quoted two graphs up, said regarding that:

It’s less of a legally motivated worry than a worry that including the column headings could further incite FOIA requests or litigation—that if people know the counterparty names and amounts are indeed on this schedule, they will be all the more likely to want to request it.

Now you see why Reilly is only half-joking in the lede.

… when unelected and unaccountable agencies pick banking winners while trying to end-run Congress, even as taxpayers are forced to lend, spend and guarantee about $8 trillion to prop up the financial system, our collective blood should boil.

Yes. We need to read more, not less, about the New York Fed.

Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu.