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[bob ford <bobford79 AT yahoo.com>]

>From today's Bloomberg news. although congress has only allocated $700 
>Billion for the TARP, the Fed has already given two 'trillion' dollars to 
>entities whose identities they refuse to disclose.  I thin once the money 
>help[s to level the plateau for the very monied and the politically 
>connected, the new attitude from TPTB will be , "we got ours, f*** it".  
Might really be time to listen to James and the goldbugs...............

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Fed Refuses to Disclose Recipients of $2 Trillion 

By Mark Pittman

Dec. 12 (Bloomberg) -- The Federal Reserve 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. 

“If they told us what they held, we would know the potential losses that the 
government may take and that’s what they don’t want us to know,” said Carlos 
Mendez, a senior managing director at New York-based ICP Capital LLC, which 
oversees $22 billion in assets. 

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. 

‘Been Bamboozled’ 

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. 

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.” 

Data Provider 

The Fed supplied copies of three e-mails in response to a request that it 
disclose the identities of those supplying data on collateral as well as 
their contracts. 

While the senders and recipients of the messages were revealed, the contents 
were erased except for two phrases identifying a vendor as “IDC.” One of the 
e-mails’ subject lines refers to “Interactive Data -- Auction Rate Security 
Advisory May 1, 2008.” 

Brian Willinsky, a spokesman for Bedford, Massachusetts- based Interactive 
Data Corp., a seller of fixed-income securities information, declined to 
comment. 

“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. 

‘Dangerous Step’ 

“In its considered judgment and in view of current circumstances, it would be 
a dangerous step to release this otherwise confidential information,” she 
wrote. 

New York-based Citigroup Inc., which is shrinking its global workforce of 
352,000 through asset sales and job cuts, is among the nine biggest banks 
receiving $125 billion in capital from the TARP since it was signed into law 
Oct. 3. More than 170 regional lenders are seeking an additional $74 billion. 

Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson said in 
September they would meet congressional demands for transparency in a $700 
billion bailout of the banking system. 

The Freedom of Information Act obliges federal agencies to make government 
documents available to the press and public. The Bloomberg lawsuit, filed in 
New York, doesn’t seek money damages. 

‘Right to Know’ 

“There has to be something they can tell the public because we have a right 
to know what they are doing,” said Lucy Dalglish, executive director of the 
Arlington, Virginia-based Reporters Committee for Freedom of the Press. 

“It would really be a shame if we have to find this out 10 years from now 
after some really nasty class-action suit and our financial system has 
completely collapsed,” she said. 

The Fed lent cash and government bonds to banks that handed over collateral 
including stocks and subprime and structured securities such as 
collateralized debt obligations, according to the Fed Web site. 

Borrowers include the now-bankrupt Lehman Brothers Holdings Inc., Citigroup 
and New York-based JPMorgan Chase & Co., the country’s biggest bank by 
assets. 

Banks oppose any release of information because that might signal weakness 
and spur short-selling or a run by depositors, Scott Talbott, senior vice 
president of government affairs for the Financial Services Roundtable, a 
Washington trade group, said in an interview last month. 

‘Complete Truth’ 

“Americans don’t want to get blindsided anymore,” Mendez said in an 
interview. “They don’t want it sugarcoated or whitewashed. They want the 
complete truth. The truth is we can’t take all the pain right now.” 

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, the Fed argued that the trade-secret exemption could be expanded 
to include potential harm to any of the central bank’s customers, said Bruce 
Johnson, a lawyer at Davis Wright Tremaine LLP in Seattle. That expansion is 
not contained in the freedom-of-information law, Johnson said. 

“I understand where they are coming from bureaucratically, but that means 
it’s all the more necessary for taxpayers to know what exactly is going on 
because of all the money that is being hurled at the banking system,” Johnson 
said. 

The Bloomberg lawsuit is Bloomberg LP v. Board of Governors of the Federal 
Reserve System, 08-CV-9595, U.S. District Court, Southern District of New 
York (Manhattan). 

To contact the reporters on this story: Mark Pittman in New York at