President Joe Biden’s Federal Reserve nominee Sarah Bloom Raskin denied improperly lobbying the central bank on behalf of a private firm, specifically saying that she didn’t remember discussing the company securing access to the central bank’s payments system in a phone call scrutinized by Republicans.
Raskin has been under tough questioning from Republicans, who are raising questions about whether she improperly exploited her connections of the Fed in her role on the board of Colorado-based Reserve Trust. She joined the firm shortly after departing a role in the Obama administration. Raskin also served on the Federal Reserve Board of Governors from 2010 to 2014.
After previously failing to gain a Fed master account, Reserve Trust reapplied and was granted one after Raskin joined the company. A master account allows a firm to have direct access to the Fed’s payment systems and to settle transactions in central bank money. Raskin was later given shares of the company for her work on Reserve Trust’s board, which she sold in 2020 for $1.5 million.
Sen. Pat Toomey, the ranking member of the banking committee, said the Fed confirmed that Raskin had been in communication with the central bank on behalf of Reserve Trust, although Raskin said she doesn’t recall such correspondence.
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“To the best of my knowledge, Reserve Trust received a master account on its merits after complying with all applicable rules and regulations, including governing Colorado banking statutes,” she said in response to written questions submitted by Republicans. “I do not recall any communications I made to help Reserve Trust obtain a master account. Had I done so, I would have abided by all applicable ethics rules in such communications.”
The Federal Reserve Bank of Kansas City put out a statement in response to Republicans’ inquiry noting that it is normal for the bank to be in contact with firms requesting master accounts.
“It is routine for the Federal Reserve Bank of Kansas City to communicate on an ongoing basis with a requesting organization, its management (including directors), public officials and any relevant federal or state regulatory counterparts,” the bank said, although it didn’t mention Raskin by name. “This communication is for the purpose of evaluating eligibility for access to Federal Reserve services, including an analysis of the risk posed to the payment and banking system.”
As part of the written questions from Republicans, Raskin was also asked about how she was recruited to join Reserve Trust’s board after her stint in the Obama administration. She said she received several offers to join corporate boards but doesn’t remember who recruited her at Reserve Trust.
Amanda Thompson, a spokeswoman for the banking committee Republicans, said in response to Raskin’s written questions that she is “either suffering from the greatest case of selective amnesia since the FBI interviewed Hillary Clinton about her email server or she is lacking candor with Congress because she knows this was a dirty use of Washington’s revolving door.”
“Even though Ms. Raskin claims not to recall whether she lobbied the Fed on behalf of Reserve Trust, she asserts, without any sense of irony, that if she did do it, it was done so ethically and entirely above board,” Thompson added.
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Raskin is married to Democratic Rep. Jamie Raskin of Maryland. The couple has also come under fire from Republicans because the congressman failed to disclose his wife’s sale of Reserve Trust shares within the time allowed by congressional guidelines.
Raskin has already testified before Congress for her nomination to serve the Fed as vice chairwoman of supervision.
