Inner City Press -- Investigative Reporting From the Inner City to Wall Street to the United Nations

With Fed to Meet on Capital One's ING Application, Blacks Out More Info

By Matthew R. Lee

SOUTH BRONX, February 6 -- Amid more and more questions about the Federal Reserve's transparency, it has today responded to requests four months ago for information, and then scheduled a February 8 meeting to consider allowing Capital One to buy ING Direct and become the fifth largest bank in the US.

Inner City Press immediately appealed under the Freedom of Information Act, arguing that the Fed should re-open its comment period, following its now-appealed under the Freedom of Information Act denial of February 3, 2011 -- emailed to ICP at 5 pm today -- of ICP's FOIA request of September 28, 2011, for

  The Fed took MORE THAN FOUR MONTHS to provide even the redacted documents it now has, less than 48 hours before the Board intends to meet on, and presumably rubber stamp, Capital One's ING DIRECT application.

  From the records belated provided, much has been redacted, or blacked out. Tellingly, the August 16, 2011 email to Fed general counsel Scott Alvarez notes that there are already protests to the applications (including ICP's) - and then is blacked out. The protests trigger the Fed's rules against ex parte communications. But here, much information is withheld. ICP is appealing.

  Even the August 22, 2011 summary of ING's request, including on "Corporate Governance," is redacted - ICP is appealing. Similarly, basic information about an "interlocking director" is redacted from the October 12, 2011 email, and later regarding the "Pro Forma Management team" - this is all being appealed.

  An August 24, 2011 email to Alison Thro -- who later publicly encouraged ICP to submit this FOIA request -- mentions another application, by Industrial and Commercial Bank of China. But elsewhere in the response, material that is not exempt from FOIA is redacted on the theory that it is "non responsive." See also, the September 8, 2011 e-mail to Ms. Thro. The Fed is now trying to use "non-responsive" as a way about FOIA, to withhold without even citing a FOIA exemption. It is an outrage, and on appeal ALL of this information should be released.

  From the December 8, 2011 email, even the NAME of an attachment is redacted - so too a paragraph about ING's activities from ING's counsel's December 27, 2011 submission - both are being appealed.

  Despite public allegations of sanctions violations by ING, the Fed is now withholding at least 61 pages in full about ING, and for example the whole November 28, 2011 email except for the word "Pam," the November 10, 2011 email except for the name "Suzanne" and the November 16, 2011 email except from the name "Stanlyn." ICP is appealing.

  Similarly, 83 + 15 + 52 pages in full about the "bulk transfer" are now belatedly referred to the OCC for decision, such that ICP cannot get a ruling and comment on them. There are also, redacted, the October 3, 2011 "questions" from the OCC. The delay, and last minute rush, is anti-participatory and cannot be accepted.

 This information must be reviewed, and released and comment allowed thereon, by ICP, NCRC and others, before the Fed considers approving the Capital One - ING proposals.

  For the reasons of record, and as argued by NCRC, the Federal Reserve should re-open the comment period to fully consider Capital One's related proposal to buy the ex-Household predatory lending platform from HSBC, and the related stealth ING proposals.

Fed Board - redacting information, rubber stamp ready?

Footnote: When JPMorgan Chase executive William Daley left as President Obama's chief of staff, to be replaced by Citigroup Jacob Lew, some wondered if JPM Chase might be losing access with Obama.

But now nominated to the board of the Federal Deposit Insurance Corporation is the head of JPMC's investment bank, Jeremiah Norton.  That is, an executive of one of the largest recipients of federal bailout funds is being placed to guard the FDIC, which insures deposits.

The move is similar tothenomination in December of a hedge fund executive from the Carlyle Group, Jay Powell, for an open seat on the Federal Reserve Board.

 Beyond the obvious overtones of putting foxes to guard the chicken house, what in fact was learned from the global financial meltdown? What conflict of interest safeguards would be in place? What for example will Occupy Wall Street do? Who can still say that the Emperor has no clothes? Watch this site.