The Fed Must Release its Super Secret Documents Oh Noes

The 2nd Circuit Court of Appeals Says Fed is Not Exempt from FOIA

Washington, DC, United States (AHN) – Freedom of Information Act. The U.S. Court of Appeals for the Second Circuit in New York ruled today that the Federal Reserve must release documents that detail which banks would have failed had they not received a government bailout in late 2007.

The decision upheld an earlier ruling by a lower court the Federal Reserve appealed. The central bank argued that releasing the documents would stigmatize some banks and essentially put them at a competitive disadvantage.

Several news organizations petitioned that the information should be available under the Freedom of Information Act (FOIA). The Federal Reserve argued that the documents met certain exemptions under the FOIA.

In regard to the FOIA, Judge Dennis Jacobs said in statement released by the court, that to give the Fed power to deny disclosure because it thinks it best to do so “would undermine the basic policy that disclosure, not secrecy, is the dominant objective of. He said, “the statute as written by Congress sets forth no basis for the exemption the Board asks us to read into it.” He also said, “If the Board believes such an exemption would better serve the national interest,” he added, “it should ask Congress to amend the statute.”

Bloomberg LP, the parent of Bloomberg News, and News Corp’s Fox News Network, originally petitioned the Federal Reserve for the documents in an August 2008 lawsuit. The Fed argued against disclosure, citing an exemption that it said lets federal agencies keep secret various trade secrets and commercial or financial information. It also said allowing disclosure of participants in the programs and the collateral they posted could cause “competitive and reputational harm,” perhaps triggering bank runs, and impede the central bank’s ability “to effectively manage the current, and any future, financial crisis.”

Bloomberg had won its case at the district court level, while Fox News had lost its case. The Second Circuit ruling threw out the ruling against Fox and ordered a lower court judge to decide what materials must be disclosed.

The Fed’s appeal may not be the last as it can still petition the full appeals court and even take it to the U.S. Supreme Court as a last resort.

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