Friday, November 30, 2007

Mission Impossible

Even in a free country the government has a legitimate need for secrecy or deceit. It might be to prevent a public panic that could impede an ongoing or planed evacuation from the location of an infectious disease outbreak. They could say there was a gas main rupture. It could be an attempt to restore moral in time of a perceived national crisis, "There is nothing to fear but fear itself". As a kid I can remember asking my father why the TV news always counted more north Vietnam casualties than American ones. It can easily be argued that in time of war the government has the obligation to engage in secrecy and deceit. We have all seen those FBI and Pentagon documents punctuated with big black blobs where something was redacted. Whenever I used to see that struck me that the government was protecting us from some very serious internal or external direct threat and I would feel grateful. Growing up of course changed that. Now seeing all those black splotches in the absence of any obvious direct threat, internal or external make me question what it is they hiding from us and I feel suspicious. e.g. the 13 minute gap in the Nixon tapes, the secrete energy meetings of Vice President Dick Cheney and in case you don't know the US FED meets in complete secrecy(no one can verify what they did) and releases only minutes that can come from who knows where. And now we have the plungers. Officially known as The President's Working Group on Financial Markets are redacting documents. What are they hiding from us? I think we all have some idea, but first from the New York Post.

THE TREASURY'S MISSING MINUTES MYSTERY

November 29, 2007 -- AFTER a year and a half of stalling, the US Treasury finally complied with The Post's requests for information about The President's Working Group on Financial Markets - by delivering 177 pages of crap.
In essence, the Treasury's Freedom of Information officials said that the Working Group - affectionately nicknamed the Plunge Protection Team - doesn't keep records of its meetings.
How interesting and convenient!
Included in the 177 pages that the Treasury said responded to our request on the actions of The President's Working Group were 53 pages on which something was redacted - blacked out so that the discussion was unreadable.
Many of those 53 pages contained no words at all - just a big black blob.
Starting in June of 2006 The Post asked for an accounting of the actions of The President's Working Group, which was formed under President Reagan. The Group seems to have the ill-defined task of keeping an eye on the financial markets. We also asked for e-mails related to our request through the Freedom of Information Act (FOIA).
The Working Group operates out of the Treasury Department and includes the heads of the various exchanges in the US, as well as top-ranking government officials.
Hank Paulson, the Treasury Secretary, and Ben Bernanke, the head of the Federal Reserve, are the two most prominent members.
Back in August, Paulson said in a television interview that "we've reenergized The President's Working Group on Financial Markets."
The Wall Street Journal last year said that Paulson, upon becoming Treasury Secretary, was insisting that the Working Group meet every six weeks.
Whatever the schedule of meetings, one of those meetings occurred on Aug. 17 - the day the Federal Reserve surprised the financial markets with a cut in its discount rate.
According to records that someone else got from Bernanke's office through a FOIA request, there was an 11 a.m. conference call on Aug. 17 of the "PWG" - the President's Working Group.
Fed Governor Kevin Warsh and Patrick Parkinson, a Treasury staffer, took part in that call, according to Bernanke's phone log.
The day before - Aug. 16 - Bernanke and Paulson had lunch, but it isn't clear whether this was just two guys having a meal or if it, too, was related to The President's Working Group.
Hours after that lunch, word got around on Wall Street that the Fed was about to make a move and the stock market staged a tremendous rally.
The next day those rumors of Fed action proved accurate.
So what's the Working Group up to?
I suspect the group is ready to come to the rescue of the financial markets - even equities - in the case of a meltdown.
And as I've said in the past, that would be a completely acceptable task as long as it remains a limited power that is used infrequently.
But who decides when a rescue is needed?
And if no records are kept, who is held accountable if The Working Group's power is abused?
George Stephanopoulos, a former top aide to President Clinton, tried to calm fears right after the terrorist attack in 2001 by explaining that The President's Working Group was at the ready to prop up the stock market.
I, too, had a similar conversation with a Fed official in Sept. 2001.
But the chance of abus ing this presi dential man date - even for personal gain - is great whenever an orga nization operates in secrecy.
And that's exactly how The President's Working Group is operating.
Included in the pile of manure we received from Treasury this week is an internal e-mail dated April 9, 2007 that Heidilynne Schultheiss, director of the Treasury's Office of Financial Market Policy, sent to six people.
The subject "Minutes of PWG Meetings?"
"Hi All, We received a FOIA request asking for minutes of meetings of the President's Working Group on Financial Markets (PWG). As far as we know, minutes are not (and never have been) kept . . . A search of our records turned up nothing," Schultheiss wrote.
That same day someone at Treasury named Mary Kertz e-mailed a bunch of folks "re: meeting notes from last PWG meeting on Financial Markets."
The e-mail said: "Thanks. Just spoke with Norman - he said the Fed Chairman had said he believed minutes were recorded for these meetings. Strange."
I don't know who Norman is. But I agree that having a powerful organization like this meet in secret is very, very strange.
And extremely dangerous.

http://www.nypost.com/seven/11292007/business/the_treasurys_missing_minutes_mystery_378734.htm?page=0

No comments: