The recent Coronavirus relief funding package apparently includes provisions for a slush fund after all. POLITICO is now reporting that a not previously reported provision of that package waives federal open meetings law requirements for members of the Federal Reserve Board, which may be handling as much as trillions of dollars in loans in the weeks and months ahead. The relief package includes a full $450 billion as security for these loans, which will mirror steps that the Fed took around the 2008 financial crisis, after which they faced a slew of legal challenges — but this time, with the open meetings requirement waived, there might not even be records to demand in a court case at all.
The new relief package lifts the requirements for the Federal Reserve Board to announce its meetings a day in advance and keep minutes covering what’s discussed at them, although final votes will still be recorded for posterity. Even those votes might not even be public until after the Coronavirus crisis is long in the rearview mirror, which will also be after potential special interests could have weighed on the process of doling out hundreds of billions to trillions of dollars in loans.
Trump’s own business connections give far too many options for those special interests to emerge, and he’s already been upending relief oversight through means like firing the inspector general tasked with the job and insisting his administration would try and block an official from reporting directly to Congress about administration stonewalling. Key information that might emerge in deliberations like the list of companies that could benefit from Coronavirus financial relief could remain especially obscured because of the lifted open meetings requirements.
Charles Glasser, an attorney who actually took on the Fed in a lawsuit seeking their records in the wake of their 2008 financial crisis wheeling and dealing, commented:
‘We may never know what terms are being given to banks, what collateral is being offered, what repayment methods and duties banks and other financial institutions may have. And these are important questions… This is written too broadly and allows the Federal Reserve to avoid its responsibilities of public disclosure as the courts have described them… Accountability and transparency cannot be sacrificed at the altar of economic rapidity.’
Glasser’s experience includes the successful procurement of records showing that the Fed had lent a whopping $1.2 trillion to banks, which had not been previously known.
The defense for the lifted open meetings requirements is that the Fed needs to move quickly, and under old rules, any time that at least three of the five Fed board members gathered, the event constituted a “meeting.”
Donald Kohn, who served as the board’s vice-chairman during their response to the 2008 financial crisis, insisted that the open meetings requirements “handicapped” decision-making, explaining:
‘A crisis evolves rapidly and in unexpected ways, with the need for freewheeling discussion before a proposal is brought to the board for decision.’
Nevertheless, the policy means that government relief for economic chaos wrought by the Coronavirus is focusing on expediting support for the economy at-large while Americans suffer.