This blog has covered a leak to Medley Global Advisors, which had occurred with Federal Open Market Committee (FOMC) information. According to Reuters, the person claiming to be responsible for the leak was a member of the FOMC, Jeffrey Lacker, president of the Federal Reserve Bank of Richmond. He has resigned on April 4, 2017. (He had planned to retire in October 2017.)
Lacker has come up in another story of the blog, the story of laughter at the vulnerable at FOMC meetings in 2011. (Lacker did not seem to participate in the laughter.)
That the Fed’s Office of Inspector General did not uncover this information shows again the fraility of an non-independent inspector general. As stated in a previous blog post–
“In addition, the leak situation demonstrates the weak position of the IG. Sadly, the Board’s IG is akin to a toothless tiger.
- The Board selects its [Inspector General] IG. The IG is not nominated by the President and approved by the U.S. Senate. Thus, an immediate conflict of interest and lack of independence is created.
- Further, the IG submits a budget to the Board for its approval (See Board Annual Report, 2013, page 314 (paragraph 3)). Again, the IG instantly is subservient to the head of the agency. As a result, the IG cannot function.”