Monday, December 15, 2008

Fed Refuses to Disclose Recipients of $2 Trillion

The Federal Reserve has refused a request by Bloomberg News to disclose the recipients of more than $2 trillion of emergency loans from U.S. taxpayers and the assets the central bank is accepting as collateral.

Bloomberg filed suit Nov. 7 under the U.S. Freedom of Information Act requesting details about the terms of 11 Fed lending programs, most created during the deepest financial crisis since the Great Depression.

The Fed responded Dec. 8, saying it’s allowed to withhold internal memos as well as information about trade secrets and commercial information. The institution confirmed that a records search found 231 pages of documents pertaining to some of the requests.

The Fed stepped into a rescue role that was the original purpose of the Treasury’s $700 billion Troubled Asset Relief Program. The central bank loans don’t have the oversight safeguards that Congress imposed upon the TARP. Total Fed lending exceeded $2 trillion for the first time Nov. 6. It rose by 138 percent, or $1.23 trillion, in the 12 weeks since Sept. 14, when central bank governors relaxed collateral standards to accept securities that weren’t rated AAA.

Congress is demanding more transparency from the Fed and Treasury on bailout, most recently during Dec. 10 hearings by the House Financial Services committee when Representative David Scott, a Georgia Democrat, said Americans had “been bamboozled.”

Bloomberg News, a unit of New York-based Bloomberg LP, on May 21 asked the Fed to provide data on collateral posted from April 4 to May 20. The central bank said on June 19 that it needed until July 3 to search documents and determine whether it would make them public. Bloomberg didn’t receive a formal response that would let it file an appeal within the legal time limit.
On Oct. 25, Bloomberg filed another request, expanding the range of when the collateral was posted. It filed suit Nov. 7.

The Bloomberg lawsuit said the collateral lists “are central to understanding and assessing the government’s response to the most cataclysmic financial crisis in America since the Great Depression.”

In response to Bloomberg’s request, the Fed said the U.S. is facing “an unprecedented crisis” in which “loss in confidence in and between financial institutions can occur with lightning speed and devastating effects.”

“Notwithstanding calls for enhanced transparency, the Board must protect against the substantial, multiple harms that might result from disclosure,” Jennifer J. Johnson, the secretary for the Fed’s Board of Governors, said in a letter e-mailed to Bloomberg News.

-Mark Pittman, Bloomberg News

Friday, December 5, 2008

Where Was America?

On December 4, representatives from 93 countries met in Oslo, Norway to finally say no to the use of an indiscriminately cruel weapon known as the cluster bomb. Noticeably absent, again, was the United States, which, along with those other bastions of human rights – Russia and China – decided to sit this one out.

The Bush Administration and other non-signers say that a comprehensive ban would hurt world security, arguing that there are legitimate military uses for the weapons.

So, like it has before with treaties on landmines, global warming and the weaponization of space, the U.S. government finds itself on the opposite side of world opinion.

Cluster munitions are large weapons, which are deployed from the air and from the ground and release up to hundreds of smaller submunitions, or "bomblets."

Their widespread dispersal means they cannot distinguish between military targets and civilians; often, the bomblets sit around for months or even years before someone stumbles on them -- often children. A total of 34 states are known to have produced over 210 different types cluster munitions and thousands of the bomblets litter the landscape in countries like Lebanon, Afghanistan, Cambodia, Bosnia and elsewhere.

Signatories of the Convention on Cluster Munitions include many of the world’s producers, stockpilers and past users, as well as some of the most seriously affected states.
Under the accord, negotiated in May, signatories agreed not to use cluster bombs, to destroy existing stockpiles within eight years, and to fund programs that clear old battlefields of dud bombs.

Supporters hope the treaty will have a stigmatizing effect on countries that did not sign.

“Like the landmine ban treaty, this treaty will stigmatize the use of the weapon by all countries, even if they have not yet signed the treaty, Nations such as the United States, Russia, and Israel will risk severe international condemnation if they ever use cluster munitions again,” said CMC Co-Chair Steve Goose, Director of the Arms division at Human Rights Watch.