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The Federal Reserve can keep secret most of the gold
documents at issue in GATA's freedom-of-information lawsuit against it, a
federal judge ruled today. But the judge, Ellen Segal Huvelle
of U.S. District Court for the District of Columbia, ordered the Fed to
disclose to GATA a potentially crucial document by February 18.
Judge Huvelle ruled that
most of the Fed's documents were exempt from disclosure under the U.S.
Freedom of Information Act for being "pre-decisional or deliberative"
or for containing privileged or confidential commercial or financial
information obtained from a person or corporation.
Among the documents so exempted, the judge found, is
"an email exchange" among Federal Reserve Board and Federal Reserve
Bank of New York staff members "discussing what information to include
in response to requests from Congress regarding the Federal Reserve's
involvement in gold."
Similarly exempted, the judge found, is "a
September 17, 2001, draft document entitled 'Confidential Draft: Potential
Repo/Swap Involving Treasury Gold.' The document identifies
issues that would be raised if a swap or repurchase transaction
involving Treasury gold were to occur."
The one document whose disclosure was ordered by the
judge was described in her memorandum of decision as "a staff member's
notes on the discussion by the Gold and Foreign Exchange Committee of the
Group of Ten (or "G-10"), as well as a transmission memorandum from
Mr. [Ted] Truman to the board." The notes, the judge found, "are a straightforward factual recounting of a meeting with
representatives of foreign central banks, detailing what each of the
participants said."
Judge Huvelle ruled in
favor of the Fed and against GATA on the adequacy of the Fed's search for
documents relevant to GATA's FOI request. GATA considered the search
inadequate for several reasons, not least because the Fed never acknowledged
the gold swap arrangements with foreign banks that were acknowledged by Fed
Governor Kevin M. Warsh in his denial of GATA's FOI
request in September 2009:
http://www.gata.org/files/GATAFedResponse-09-17-2009.pdf
Regardless of the adverse parts of the judge's
decision, GATA considers its lawsuit a success for having established in open
court that the Fed has many secrets about gold, a subject where secrecy's
only plausible purpose can be surreptitious market intervention, which would
be fully consistent with the official documentation GATA has compiled about
such intervention. (See http://www.gata.org/taxonomy/term/21 and particularly http://www.gata.org/node/9545.)
That the Fed has participated in gold swaps for
market-rigging purposes has been established, among other things, by the
January 1995 minutes of its own Federal Open Market Committee (http://www.federalreserve.gov/monetarypolicy/files/FOMC19950201meeting.p...) and by the refusal two months ago of Germany's central bank, the Bundesbank, to deny that it has undertaken gold swaps
with the United States (http://www.gata.org/node/9363).
Further, the record of GATA's case may be useful to
U.S. Rep. Ron Paul, R-Texas, new chairman of the
House Financial Services Committee's Subcommittee on Domestic Monetary
Policy, should he, as many hope and expect, formally question Federal Reserve
officials about the Fed's surreptitious involvement in the gold market.
Of course GATA's case also suggests all sorts of
questions that could put to Fed officials about gold should financial
journalism ever report on that market seriously.
Judge Huvelle's memorandum
of decision in GATA's lawsuit against the Fed can be found here:
http://www.gata.org/files/GATAFOILawsuitRuling-02-03-2011.pdf
The judge's order can be found here:
http://www.gata.org/files/GATAFOILawsuitOrder-02-03-2011.pdf
* * *
Chris
Powell
GATA.org
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