House Financial Services Chairman Jeb Hensarling Thursday subpoenaed the Federal Reserve, accusing it of a “failure to comply” with requests for documents about a 2012 leak of Fed deliberations to a newsletter.
“It is unacceptable, illegal and corrupt for anyone at the Fed to deliver inside information that could provide a financial advantage to the privileged few and lead to the manipulation of financial markets,” Hensarling said.
Hensarling accused the Fed of fostering a “crony economy” by leaking information from its October 2012 deliberations to Medley Global Advisors that the firm later provided to clients in a private newsletter. News of the leaks were reported in the media, which also documented a meeting between Medley and Fed Chairwoman Janet Yellen.
The Justice Department is investigating the leak, as is an internal Fed watchdog unit.
Hensarling said Thursday the Fed has “resisted” the oversight of the House Financial Services Committee and has refused to supply “complete” responses to the requests made by the panel.
The Federal Reserve has not provided any of the documents requested by the committee or any “legally justifiable reason” for refusing to cooperate, he said.
Rep. Maxine Waters, D-Calif., criticized the subpoena as unnecessary, given the internal investigation and Justice Department probe.
“The politicization of these leaks by Chairman Hensarling will likely have a chilling effect on this investigation, by undercutting the thorough, independent nature of the Inspector General’s work. I agree with the Inspector General that this unilateral subpoena will only interfere with an impartial and comprehensive inquiry.”
