In Reversal, Fed Now Won’t Release Key Doc On Asset-Buying Program

January 7, 2009 6:08 am

Last week, we looked at the process by which the New York Federal Reserve selected four investment firms to manage its program to purchase $500 billion of mortgage-backed securities, in order to bolster the housing market.

Or at least, we tried to.

A fact sheet on the website of the New York Fed, announcing the details of the program stated that “a competitive request for proposal (RFP) process was employed” to select the four firms — Blackrock Inc., Goldman Sachs, Wellington Management, and PIMCO. A Fed spokesman declined last week to give TPMmuckraker any information about the value of the contracts or the nature of the firms’ successful bids. But he did tell us that he expected to be able to provide us with a copy of the RFP, after it had been inspected by Fed lawyers.

But now things seem to have changed. The spokesman hasn’t responded to our followup calls, placed this week, about the RFP. In other words, not only will the Fed not tell us how much its paying the firms to manage our money, it won’t even release the document it used to solicit bids for the contract.

As for the firms themselves, they’ve been just as tight-lipped. As we noted at the time, the first three referred us to the Fed, and PIMCO didn’t return our calls at all.

To be clear, there’s no evidence that these firms were improperly selected — though the fact that PIMCO’s founder was, as we’ve reported, loudly calling back in September for the government to launch just such an MBS purchase program does create some interesting optics, at the least.

But don’t taxpayers have a right to know some basic details about the process by which these private investment firms — at least one already the recipient of massive government largesse — were hired to manage our money? We think so…

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