Bloomberg Wins Again Against the Fed — The Supreme Court Gives 5 Days to Release the Records

We have been following this on this blog during the past 2 years, and I am happy to see that justice has won. It doesn't happen often, so we must celebrate.

Nothing much to add to the two following Bloomberg stories.

March 21 (Bloomberg) -- The Federal Reserve will disclose details of emergency loans it made to banks in 2008, after the U.S. Supreme Court rejected an industry appeal that aimed to shield the records from public view.

The justices today left intact a court order that gives the Fed five days to release the records, sought by Bloomberg News’s parent company, Bloomberg LP. The Clearing House Association LLC, a group of the nation’s largest commercial banks, had asked the Supreme Court to intervene.

“The board will fully comply with the court’s decision and is preparing to make the information available,” said David Skidmore, a spokesman for the Fed.

The order marks the first time a court has forced the Fed to reveal the names of banks that borrowed from its oldest lending program, the 98-year-old discount window.
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Under the trial judge’s order, the Fed must reveal 231 pages of documents related to borrowers in April and May 2008, along with loan amounts. News Corp.’s Fox News is pressing a bid for 6,186 pages of similar information on loans made from August 2007 to November 2008.

The records were originally requested under the Freedom of Information Act, which allows citizens access to government papers, by the late Bloomberg News reporter Mark Pittman.
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Bloomberg initially requested similar information for aid recipients under three other Fed emergency programs. The central bank released details for those facilities and others in December, after Congress required disclosure through the Dodd- Frank law.

The legislation didn’t apply retroactively to the discount window lending program, which provides short-term funding to financial institutions. Discount window loans made after July 21, 2010, must be released following a two-year lag.
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March 22 (Bloomberg) -- A Supreme Court order that forces unprecedented disclosures from the Federal Reserve ended a two- year legal battle that helped shape the public’s perceptions of the U.S. central bank.

The high court yesterday let stand a lower-court ruling compelling the Fed to reveal the names of banks that borrowed money at the so-called discount window during the credit crisis. The records were requested by Bloomberg LP, the parent company of Bloomberg News. In July, Congress passed the Dodd-Frank law, which mandated the release of other Fed bailout details.

Fed Chairman Ben S. Bernanke “now must finally understand that this money doesn’t belong to the Federal Reserve, it belongs to the American people and the American people have a right to know how their taxpayer dollars are being put at risk,” said Senator Bernard Sanders, a Vermont Independent who wrote Fed transparency provisions in Dodd-Frank.
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The high court’s order means the Fed will have to reveal an unprecedented level of detail about its discount window lending during the financial crisis -- including borrowers’ names and amounts. Officials are preparing to comply, said David Skidmore, a spokesman for the central bank. He declined to elaborate.
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Paul, who has called for abolishing the central bank, signed up more than 300 co-sponsors for a 2009 bill requiring a Fed audit. The measure passed the House before being dropped by the Senate. It was quite a difference from similar proposals in the 1970s that attracted little attention, he said.

“The Bloomberg lawsuit had a lot to do with the cultural change,” Paul said. “Bloomberg has credibility that politicians don’t have.”
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Bloomberg LP sued for the records after the late Bloomberg News reporter Mark Pittman requested them under the Freedom of Information Act. The media company won at district and appellate courts.

The Fed declined to appeal the case to the Supreme Court; the Clearing House Association LLC, a group of the largest U.S. commercial banks, asked the high court to intervene.

Under the trial judge’s order, which the Supreme Court refused to reconsider, the Fed must reveal 231 pages of documents related to discount window borrowers in April and May 2008, along with loan amounts. After Bloomberg filed suit, News Corp.’s Fox News Network LLC requested similar records over a longer period of time and also filed suit. It stands to receive 6,186 pages of documents on loans made from August 2007 to November 2008.

The Fed must be forced to divulge such information, said Mark Williams, executive-in-residence at the Boston University School of Management and a former Fed bank examiner.

“The Fed has to be held to higher accountability,” Williams said. “It takes lawsuits like this to do that.”