And yes, the Fed is above the law …
Update: DJIA FUTURES AT DAY’S LOW, FALL 361PTS; S&P -38, NASDAQ -91
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For nearly one year, Wisconsin Rep. Sean Duffy has been Janet Yellen’s nemesis over the ongoing probe into Fed leakage of material inside information via Medley Global and any other undisclosed channels, one which has seen subpoeans be lobbed at the Fed which has been doing everything in its power to stall said probe, and which cost Pedro da Costa his job when he dared to ask questions at a Fed presser that were not precleared by his WSJ “Fed mouthpiece” peers.
Today, during Yellen’s appearance before the House Financial Services committee, Duffy finally had enough, and in a heated exchange asked Yellen what on legal authority is the Fed exerting privilege to ignore a Congressional probe into what is clearly a criminal leak, one which has nothing to do with monetary policy and everything to do with the Fed providing material, market moving information to its favorite media and financial outlets.
The exchange highlights are below:
DUFFY: We sent a letter in the Medley investigation, in our oversight of the Fed, asking you for information regarding communication. No compliance. Then we sent you a subpoena in May, you did not comply with that.
We had partial compliance in October. We’re now a year after my initial letter. I’ve asked you for excerpts of the FOMC transcripts in regard to the discussion — in regard to the internal investigation on Medley. You have not provided those to me. Is it your intent today to promise that I will have those, if not this afternoon, tomorrow?
YELLEN: Well, congressman, I discussed this matter with Chairman Hensarling and indicated we have some concern about providing these transcripts… given their importance in monetary policy.
DUFFY: So let me just…
YELLEN: And I received a note back from Chairman Hensarling last night, quite late, indicating your response to that. And we will consider it and get back to you as soon as we can.
DUFFY: Oh no, no. I don’t want you to consider it and I think the chairman would agree with me, that this is a conversation, not about monetary policy. This is not market-moving stuff. This is about the investigation and the conversation of a leak inside of your organization. So this institution is entitled to those documents, wouldn’t you agree?
YELLEN: I will get back to you with the formal answer.
DUFFY: No, no, listen.
YELLEN: I believe that we have provided you with all the relevant information.
DUFFY: That’s not my question for you Chair Yellen. If I’m not entitled to it, can you give me the privilege that you’re going exert that’s going to let me know why I’m not entitled to those documents?
YELLEN: I said we received well after the close of business yesterday a letter explaining your reasoning and I will need some time to discuss this matter with my staff.
DUFFY: I don’t want — listen. I sent you a letter a year ago on February 5th. I had to send you a subpoena. You knew that I’m looking for these documents, you knew I was going to ask you about this today. So if you’re not going to give me the documents, exert your privilege, tell me your legal authority, why you’re not going to provide this to us.
And while a video of the exchange can be watched below (we will substitute a higher quality version when we can find one)…
The end result was this:
… which after just one more push by a few good men in authority, will be the same as another picture very familiar to regular Zero Hedge readers.
We just wonder if there are still a “few good men” left, daring to challenge the head of the Fed on what any other mere mortal would have been in prison for, long ago.
As for the “deer in headlights” look, and why Yellen is so adamantly refusing to comply with subpoenas and provide the US population and Rep. Duffy with the requested information regarding how it was that the Fed leaked critical information to Medley Global’s (founded by Richard Medley, former chief political strategist to George Soros) Regina Schleiger, the answer as Yellen explained last May…
… is simple: Yellen herself was the source, only there is no definitive proof… yet, as confirmation that the Chairwoman herself leaked the information in question would be grounds for prison time.
And since we doubt that Janet would chose a legacy of being the first Fed Chairman thrown in jail, even if it is not that far below a legacy of totally mangling the Fed’s attempt at renormalizing rates at a time when the entire world was careening into a recession, we expect absolutely no cooperation by the Fed in this ongoing criminal matter.