Making Government Transparent and Accountable
The Sunlight Foundation uses cutting-edge technology and ideas to make government transparent and accountable. Underlying all of our efforts is a fundamental belief that increased transparency will improve the public's confidence in government
The Sunlight Foundation Blog
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Thoughts on a Lord of Finance’s Schedule
If ever we saw the fruits, and possibilities, of disclosure and transparency, it is in this New York Times profile of Treasury Secretary Timothy Geithner. The article is based largely off of the Freedom of Information Act (FOIA) release of Geithner’s 2007-2008 schedule when he served as president of the New York Federal Reserve Bank. The 658-page schedule is a monument, not only to the FOIA system (and to the new “presumption towards disclosure” ordered by President Obama and AG Holder), but also to what active disclosure could look like. Imagine these records released as the meetings were happening.
While the schedule rarely explains the contents of the meetings, the running list of financial titans tells its own story. As Joseph Stiglitz explains in the Times article:
“I don’t think that Tim Geithner was motivated by anything other than concern to get the financial system working again,” Mr. Stiglitz said. “But I think that mindsets can be shaped by people you associate with, and you come to think that what’s good for Wall Street is good for America.”
The Geithner profile shows his repeated meetings with Wall Street titans, particularly executives and high-level employees of Citigroup, the once-mighty superbank. The disclosure of these meetings helps explain the decisions that Geithner made during his term at the New York Fed and as Treasury Secretary. They are a vital part of the public record.
In Washington, the disclosure of these kinds of contacts would also be vitally important, not only for public consumption but for the awareness of lawmakers. If we were allowed to see the schedules of contacts made by lobbyists and influencers, stories like these — pulling back the curtain — would proliferate. Imagine every contact by a registered lobbyist or influencer to a congressional office and executive branch agency reported into a database, made into a schedule, and made available online.
This kind of transparency would alter the way the public sees politics in Washington. It would also provide lawmakers and others an important view into the pressure tactics of interest groups and lobbyists, something that they ought to be privvy to, to help make better decisions in their representative capacity. The more real-time disclosure we have the more likely stories like the Geithner profile will be able to come out while decisions are being made and not through when we are looking through the rear-view mirror.
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The Transparency Principle in Our Crisis World
As the bailouts mount serious questions remain about the future formation of the economy and the government. These questions revolve not just around policies, but around principles. One of those principles that everyone–senators, congressmen, newspapers, the President–has stated support for is transparency. But, the battle for real transparency in the current cleanup of the market mess is woefully wanting.
Bloomberg reports today that the Federal Reserve has rejected their Freedom of Information Act (FOIA) request for information relating to the nearly $2 trillion in Fed loans to banks and securities firms. The Fed states that their refusal to fulfill the FOIA request is due to an “exemption under trade secrets.” Also, the source of a lot of the lending is the Federal Reserve Bank of New York, the former perch of Treasury Secretary Geithner, which is not subject to FOIA law. (Continue reading…)
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New Lobbying Rules on TARP
Just yesterday, I was posting about restricting TARP firms from using funds for political influence. Today, Treasury Secretary Tim Geithner went a step further and placed restrictions on the lobbying of Treasury Department employees by recipients receiving TARP funds. According to the AP:
Treasury’s new rules restrict the contact officials can have with lobbyists in connection with applications for funds from the bailout program. The new restrictions are modeled on the limits that are imposed on political lobbying of Treasury Department officials on tax matters.
In making required reports to Congress on the operation of the $700 billion rescue program, officials will have to certify that each investment decision was based only on objective criteria and the facts of each case.
The rescue program will be required to publish a detailed description of the review process conducted in making the awards, and no bank will be considered for an award unless it was recommended for the assistance by the firm’s primary regulator.
The new rules come in the wake of fresh lobbying reports filed with the government showing some big banks stepped up their lobbying efforts late last year even as they received billions of dollars from the bailout program.
This is a very important step in the process of making TARP and any other bailout free from the ordinary process of influence in Washington. The Feinstein-Snowe bill (S. 133) still remains important, as TARP recipients could still lobby other agencies, the White House, or Congress with TARP funds.
Here’s a link to the actual Press Release from Treasury.
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The Revolving Door, Robert Rubin, and Citigroup
Today, President-Elect Barack Obama named the key members of economic team including Timothy Geithner as Treasury Secretary and Larry Summers as head of the National Economic Council. Notably, many in Obama’s economic circle are acolytes of former Clinton Treasury Secretary Robert Rubin, the subject of much talk in the wake of the bailout of Citigroup. Rubin, a revolving door spinner between Wall Street and Washington, began his career at Goldman Sachs, moved to the National Economic Council, then Treasury, and in 1999, left government and joined Citigroup. Rubin’s story provides a telling story about the conflicts of interest that can occur when a high-ranking official moves so seemlessly between the public and private sector.
In this New York Times article addressing Citigroup’s economic troubles, Rubin appears as a key player, in both the deregulation that allowed the bank to become so large and unwieldy and as an adviser to the bank urging riskier behavior: (Continue reading…)
