Fed: No evidence of deliberate leaks from 2012 meeting

Staff Writer
Columbus CEO

WASHINGTON (AP) — An investigation by the Federal Reserve has found no evidence that market-sensitive information was deliberately leaked from its interest-rate policy meeting in September 2012.

The Fed said in a summary of its investigation, provided to Congress on Monday, that any disclosure of information on Fed policymakers' views appeared to have been "unintentional or careless" and did not contain details of policy proposals.

Lawmakers in recent weeks have asked the Fed for the results of its probe, which was begun in October 2012 at the request of then-Fed Chairman Ben Bernanke and completed in March 2013. The summary was submitted Monday in response to those requests.

The Fed inspector general, an independent watchdog, has been reviewing the handling of the internal probe amid allegations of possible impropriety cited by a key Republican lawmaker.

The case reviewed by the Fed stemmed from an article published by The Wall Street Journal on Sept. 28, 2012 that reported in detail how Bernanke had achieved consensus among the policymakers in a recent meeting on launching an additional round of bond purchases to stimulate economic growth. A report to clients by a financial intelligence newsletter contained similar information a few days later.

The Fed probe found that the author of the Journal article had talked to every Federal Reserve Bank president and most Fed governors as well as staff members, enabling him to obtain the information on the policymakers' views without having to receive leaks of sensitive data. The financial newsletter report appeared to be based on fewer interviews, the summary said.

Rep. Jeb Hensarling of Texas, the head of the House Financial Services Committee and a prominent critic of the Fed, told Fed Chair Janet Yellen in a letter this month that he understood that that the internal probe had been dropped at the request of several members of the Fed's policymaking body. Hensarling said the inspector general's office is pursuing a criminal investigation.

"The resistance the Financial Services Committee has encountered in trying to help shed transparency on this matter is troubling," Hensarling wrote.

Asked about the alleged pressure from Fed policymakers, Yellen said at her news conference last week, "That is an allegation that I don't believe has any basis in fact. I'm not going to go into the details, but I don't know where that piece of information could possibly have come from."

Yellen said the Fed has policies and procedures that it follows if a leak occurs.

"Let me say that the (policymaking) committee and I personally take very seriously our responsibility to safeguard confidential information," Yellen said.

The security of confidential, market-moving information has increasingly become a concern for federal officials. Possible leaks of government data have led the Labor and Commerce departments as well as the Fed to impose tight procedures for distributing information early to reporters.

Hensarling had no immediate comment on the Fed summary, his spokesman said.