WASHINGTON -- The Federal Reserve may be making an effort to open up some of its famously opaque decision making, but the newfound interest in transparency doesn't extend to sharing records of meetings that happened years ago.
The Huffington Post and MSNBC's "Dylan Ratigan Show" filed Freedom of Information Act requests in January to obtain the minutes of Federal Open Market Committee meetings from 2007 to 2010. That month, the Fed had released the 2006 minutes of the confidential committee, which essentially sets national monetary policy.
In response, the bank provided 513 pages of mostly blacked-out paper and cited policy to justify withholding the information. "[T]he Committee has a long-standing policy of routinely releasing full transcripts on a five-year schedule. Each year's transcripts will be made public in their entirety according to that schedule," the bank offered by way of explanation.
By withholding the 2007 and 2008 minutes, the Fed is able to keep secret certain information on how it decided to respond to the financial crisis until after the presidential election, hampering what could be a serious debate between the two parties on its response.
During the financial crisis, Mitt Romney was broadly supportive of the federal response, with the exception of the bailout of the auto industry. He has since spoken much more skeptically of the Wall Street bailout. Barack Obama, as a candidate and then as president, spoke favorably of the federal intervention as unfortunate but necessary. On Friday, his Treasury Department released a full-throated defense of its activity.
How the Fed made its decisions, however, will be kept hidden until the bank releases the transcripts year by year.
"The Federal Reserve has been looking for ways to increase its transparency now for many years, and we've made a lot of progress," Fed Chairman Ben Bernanke said in April 2011, as he embarked on a series of lectures aimed at defending the Fed. "We have become, I think, a very -- a very transparent central bank."
Bernanke said the bank would continue to improve. "We're continuing to look for additional things that we can do to be more transparent and more accountable," he said a year ago. "And I personally have always been a big believer in providing as much information as you can to help the public understand what you're doing, to help the markets understand what you're doing, and to be accountable to the public for what you're doing."
There are some market participants, however, who know exactly what happened in those meetings.
One of the few things not redacted in the Fed's FOIA response is the list of officials who attended each confidential meeting. Many of those people have since left the central bank and gone to work in the financial industry, taking with them privileged information about the Fed's thinking that is still closed to the public.
Take Susan Bies. A onetime member of the Fed Board of Governors, she was involved with the Financial Stability Forum, an international group of central bankers, finance ministers and the like, and, according to Forbes, "led the Fed's efforts to modernize the Basel capital accord." Bies now sits on Bank of America's board.
Brian Sack has cycled between the Fed and the private sector more than once. In 2009, he returned to manage the System Open Market Account. Bernanke said at the time, "Many of you know Brian, I am sure. He was here. He went off to work with Larry Meyer for awhile. Now we welcome him back to the Fed family."
Laurence Meyer was himself a top Fed governor who left in 2002 to return to the firm he founded, Macroeconomic Advisers, which offers economic forecasts. David Stockton, another Fed official who attended Federal Open Market Committee meetings in question, also departed to join Meyer's firm. In 2012, Sack once again left the Fed.
Deborah Bailey has since gone on to Deloitte & Touche, where she is director of governance, regulatory and risk strategies.
Meredith Beechey is now at Sveriges Riksbank, Paul Connolly is at Eastern Bank/John Hancock Life Insurance Co., and Benson Durham is at the Capital Group Companies. Joseph Gagnon, Michael Gapen and Jon Greenlee have moved on to the Peterson Institute, Barclays Capital and KPMG, respectively. Brian Madigan also went to Barclays, and Nathan Sheets is now at Citigroup.
At least eight other meeting participants have moved on to private financial institutions.
Clients deeply value the kind of insight a former Fed insider can bring -- a value Citi didn't overlook in its announcement of Sheets' hiring, which featured this quote: "With over 18 years of experience with the Federal Reserve, Nathan's appointment underscores Citi's commitment to bring the highest quality insights to our clients."
Jason Cherkis contributed reporting to this story.
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