By Craig Torres and Christopher Anstey
December 29, 2009
SourceDec. 29 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke had conversations with 18 of the 23 legislators on the Senate Banking Committee prior to their 16-7 vote this month to recommend that the full Senate confirm him to a second term.
The Fed chief had contact with 24 senators between August 4 and Nov. 30, almost all at congressional office buildings, after his Aug. 25 nomination to another four-year term as chairman by President Barack Obama. The meetings and phone calls were listed in a daybook provided by the Fed yesterday in response to Freedom of Information Act requests by Bloomberg News.
While facing opposition to his renomination, Bernanke also confronts the biggest threats to the Fed’s authority and independence in five decades. Both chambers of Congress are demanding more transparency by the Fed and drafting legislation redefining the central bank’s role in financial stability and consumer protection. The Senate is considering a proposal that would strip the Fed of power to supervise banks.
“In all my years of doing this, and I have been doing this since 1996, I have never seen a Fed chairman put a full court press on Congress, especially on the Senate Banking Committee,” said Ken Thomas, a lecturer in finance at the University of Pennsylvania’s Wharton School who routinely reviews the daybooks of Fed chairmen.
“This is unprecedented political contact for a Fed chairman in such a short period,” Thomas said, “especially considering Bernanke’s vow before his first Senate confirmation hearing that ‘I will be strictly independent of all political influences.’” The banking committee hearing was held on Nov. 15, 2005.
Fed spokeswoman Barbara Hagenbaugh didn’t immediately respond to requests by telephone for comment.
Leaders Day
Bernanke also met with House lawmakers, including Majority Leader Steny Hoyer of Maryland and John Larson of Connecticut, chairman of the House Democratic Caucus. He lunched with Republican members of the House Ways and Means Committee on Sept. 16, and spoke the same day at a Rhode Island Business Leaders Day event sponsored by Senator Jack Reed, a Democrat on the banking committee.
“Bernanke has put a big emphasis on communication,” said Douglas Lee, a former Joint Economic Committee chief economist who is now president of Economics From Washington in Potomac, Maryland.
“Given the highly unusual set of circumstances that prevailed” during the financial crisis, the Fed chairman “would have a larger than usual contact with members of Congress, particularly the Senate Banking Committee,” Lee said. He met with Bernanke on Sept. 1, according to the Fed chairman’s calendar.
Mostly Republicans
While the former Princeton University professor was first picked by Republican ex-President George W. Bush, opposition on the renomination came mostly from Republicans who have criticized the Fed for lax regulation and its role in bailouts of Wall Street.
Richard Shelby, the senior Republican on the banking panel, opposed a second term for Bernanke along with five other Republicans and one Democrat. Christopher Dodd, the Democrat from Connecticut who chairs the committee, said this month the full Senate vote is likely to occur sometime after Jan. 19. He supported a second term for the Fed chief.
Bernanke also met during the period from August through November with private-sector economists, business and financial-company leaders, hedge fund managers, foreign central bankers and other government officials from abroad.
Dealers and Investors
The Fed chairman hosted a session on Aug. 4 with the U.S. Treasury’s Borrowing Advisory Committee, a group of dealers and investors.
Bernanke met with Citigroup Inc. Chairman Richard Parsons on Aug. 10, and eight days later with Chief Executive Officer Vikram Pandit, the records show.
Bernanke held a session on Sept. 2 with chief executives of major airlines, according to the daybook, which didn’t specify the names of the companies. He spoke by telephone on Oct. 9 with Ford Motor Co.’s Alan Mulally and other executives of the Dearborn, Michigan-based automaker.
The Fed chairman met in his office on Sept. 4 with Stan Druckenmiller, chairman of Duquesne Capital Management LLC in New York, and Arminio Fraga, chairman of Gavea Investimentos Ltda in Rio De Janeiro, Brazil.
Goldman Sachs Group Inc. Chairman Lloyd Blankfein met with Bernanke and Fed General Counsel Scott Alvarez on Sept. 30. The Fed became a supervisor of Goldman Sachs after the firm converted to a bank holding company in September 2008 following the collapse of Lehman Brothers Holdings Inc.
Bernanke met in his office on Oct. 21 with Anshu Jain, head of global markets at Deutsche Bank AG, and Peter Hooper, chief economist at Deutsche Bank Securities Inc. in New York. He met with Barclays PLC President Robert Diamond Jr. on Sept. 29.
To contact the reporters on this story: Craig Torres in Washington at
ctorres3@bloomberg.net; Chris Anstey at
canstey@bloomberg.net.
Last Updated: December 29, 2009 13:00 EST