The Fed's Selective Candor

Posted by: Matthew Goldstein on April 29

It seems not all requests for information are treated equally by the Federal Reserve.

On April 26, The New York Times ran a long front-page story about Treasury Secretary Timothy Geithner and the close connections he had forged with people on Wall Street while heading up the New York Fed. A good chunk of the story came from information gleaned from Geithner’s daily calendar—a sort of Who’s Who of Wall Street executives who got to meet with Geithner and whisper into his ear over the past two years.

The Fed, however, just didn’t turnover Geithner’s calendar to the Times. The newspaper was forced to file a Freedom of Information Act request—something news organizations frequently have to do when dealing with government agencies. And the Times gets kudos for its dogged pursuit of Geithner’s calender and posting the entire 638-page document on its website. But here’s the thing: last November the Fed denied a similar FOIA request from Kenneth Thomas, a finance lecturer at the Wharton School of Business.

In fact, the Fed’s Board of Governor’s, in its denial letter, told Thomas that it couldn’t even find a copy of Geithner’s calendar. The Fed board’s associate secretary suggested that Thomas contact the NY Fed directly. Thomas, who has been submitting FOIA requests to the Fed for years, didn’t do that. But he says it shouldn’t have been necessary since the Fed’s board oversees all the regional Fed operations. He interpreted the Fed’s Nov. 19 letter as a message to get lost.

“I was one of first persons to start submitting FOIAs for these calendars,” says Thomas. “That request to the board should have covered it.’’

We’ll never know for sure whether Thomas would have gotten his demand for Geithner’s calendar approved if he had followed-up with the NY Fed. But may be this is a case of simple bad timing. When Thomas submitted his FOIA request on Nov. 9, the financial system was still on the verge of melting down and Geithner was playing a big role in trying to keep the pieces together. May be the Fed didn’t want to tip too much of its hand.

Or may be it’s simply easier to turn away a Wharton lecturer than it is to ignore the Times.

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BusinessWeek's Adrienne Carter, Jessica Silver-Greenberg, and David Henry deconstruct the mysteries of high finance, Wall Street, and hedge funds for pros and ordinary investors. E-mail them directly if you've got tips about big deals, a hedge fund, or even securities industry gossip.

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