Conflicts of Interest at the Federal Reserve
The GAO included several instances of specific individuals whose membership on the Fed'sboard of directors created the appearance of a conflict of interest including:
Stephen Friedman, the former chairman of the New York Fed's board of directors.
During the end of 2008, the New York Fed approved an application from Goldman Sachs tobecome a bank holding company giving it access to cheap loans from the Federal Reserve.During this time period, Stephen Friedman, the Chairman of the New York Fed, sat on the Boardof Directors of Goldman Sachs, and owned shares in Goldman's stock, something that wasprohibited by the Federal Reserve's conflict of interest regulations. Mr. Friedman received a waiver from the Fed's conflict of interest rules in late 2008. This waiver was not publicallydisclosed. After Mr. Friedman received this waiver, he continued to purchase stock in Goldmanfrom November 2008 through January of 2009. According to the GAO, the Federal Reserve didnot know that Mr. Friedman continued to purchases Goldman's stock after his waiver wasgranted.
Jeffrey Immelt, the CEO of General Electric, and board director at the New York Fed
The GAO found that the Federal Reserve Bank of New York consulted with General Electric onthe creation of the Commercial Paper Funding Facility established during the financial crisis.The Fed later provided $16 billion in financing to General Electric under this emergency lendingprogram. This occurred while Jeffrey Immelt, the CEO of General Electric, served as a directoron the board of the Federal Reserve Bank of New York.
Jamie Dimon, the CEO of JP Morgan Chase and board director at the New York FederalReserve
Jamie Dimon, the CEO of JP Morgan Chase, served on the board of the Federal Reserve Bank of New York at the same time that his bank received emergency loans from the Fed and while hisbank was used by the Fed as a clearinghouse for the Fed's emergency lending programs.In March of 2008, the Fed provided JP Morgan Chase with $29 billion in financing to acquireBear Stearns. During this time period, Jamie Dimon was successful in getting the Fed to provideJP Morgan Chase with an 18-month exemption from risk-based leverage and capitalrequirements. Dimon also convinced the Fed to take risky mortgage-related assets off of BearStearns balance sheet before JP Morgan Chase acquired this troubled investment bank
http://campaign2012.washingtonexaminer.com/blogs/beltway-confidential/report-fed-directors-benefited-bailouts
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