Report: 'Apparent Conflict of Interest' Between Fed Directors and Bailouts

Remember Sen. Bernie Sanders (I-Vt.) who recently came out in support of the Occupy Wall Street protests?

Well, he’s making headlines again because he might be onto something very, very big that involves a shocking degree of political corruption and corporate cronyism.

It all begins with a recent report from the Government Accountability Office (GAO) that claims that, “multiple directors or former directors of the Federal Reserve banks who played a key role in the 2008 bailouts had an apparent conflict of interest,” according to The Washington Examiner.

What's the “conflict of interest?"

Several of these Fed reserve directors were connected to the companies and banks that received large sums of government money.

Joel Gehrke of Examiner reports:

The office of Sen. Bernie Sanders, I-Vt., who caucuses with the Democrats, noted that the [GAO] report did not name any names, "but unambiguously described several individual cases involving Fed directors that created the appearance of a conflict of interest."

The group of 18 people connected to both the Federal Reserve and a bailed out company included: the CEO of General Electric, Jeffrey Immelt (who is now President Obama's jobs czar); Stephen Friedman of Goldman Sachs Group Inc.; and Jamie Dimon, the CEO of JP Morgan Chase [emphasis added].

Friedman chaired the Federal Reserve Bank of New York in 2008, when the New York Federal Reserve approved Goldman Sachs as a bank holding company, which Sanders' office explains "[gave] it access to cheap Fed loans."

Friedman received a waiver from the Federal Reserve to keep his chairmanship, even though he was "a current board member and shareholder of Goldman Sachs Group Inc."

When Friedman received this waiver, "the Federal Reserve Board was unaware that the then-FRBNY chairman had purchased additional shares in Goldman Sachs via an automatic stock purchase program," according to the full report.

It gets worse.

The Federal Reserve Bank of New York consulted with GE about creating an "emergency program to assist with the commercial paper market" while Jeffery Immelt served as a New York Fed director, according to the Examiner report.

“The Fed later provided $16 billion in financing for GE under the emergency lending program," even while Immelt held his position with the Federal Reserve Bank of New York and GE, according to the Sanders report.

But it doesn't stop there.

Jamie Dimon was the director for the Federal Reserve Bank of New York when JP Morgan received $29 billion through the Federal Reserve to purchase Bear Stearns, according to the report.

"Dimon also convinced the Fed to take risky mortgage-related assets off of Bear Stearns balance sheet before JP Morgan Chase acquired this troubled investment bank," writes the Sanders report.

One starts to get the feeling as dishonest and underhanded as these actions seem, the revelations of the GAO and Sanders report are just the tip of the iceberg.

Read the Sanders Report Here.

Read the Full GAO Report here.

(H/T Hotair, Washington Examiner)