Richmond Federal Reserve President Jeffrey Lacker resigned on Tuesday after admitting that he may have disclosed confidential information about Fed policy options to a Wall Street analyst in 2012.
“It was never my intention to reveal confidential information,” Lacker said in a statement.
The conversation took place in 2012 with an analyst from Medley Global Advisors.
Mr. Lacker claims that he “may have contravened the External Communications Policy, which prohibits providing any profit-making person or organization with a prestige advantage over its competitors.”
The Richmond Fed responded to Lacker’s announcement in a statement.
“The Federal Reserve places a high priority on safeguarding information,” the statement read. “We expect every employee to comply with all relevant policies and procedures, as well as our standards of conduct. Employees must review and acknowledge our policies annually. Once our Bank’s Board of Directors learned of the outcome of the government investigations, they took appropriate actions.”
“We are focused on moving forward within our organization—and were already underway with our presidential search, following Jeffrey Lacker’s announcement in January to retire in 2017,” the statement continued. “This search process will continue as scheduled. In the interim, First Vice President Mark Mullinix is serving as the Bank’s acting president.”
That’s really nice legal language to protect them and, of course, Mr. Lacker’s “may have” confession insulates him from saying that he actually violated the law.
The leak took place in 2012. According to The Wall Street Journal:
At issue is the Fed’s review of an October 2012 report by a policy information service to its clients with potentially market-moving details about internal central bank policy discussions. The Fed investigation found no major breaches of its communications policies.
Mr. Hensarling sent a subpoena to the Fed last month seeking documents related to the investigation. The subpoena expires Friday. He didn’t immediately respond to a request for comment.
Critics, including lawmakers and outside observers, say the Fed mishandled the probe.
Under the Fed’s guidelines in place at the time, it was supposed to address any potential breach of sensitive information by having the central bank’s general counsel and the secretary of its policy-making committee “perform an initial review” in consultation with the Fed chairman. If the general counsel decided a fuller investigation was needed, he was to refer the matter to the central bank’s inspector general.
Instead, the Fed conducted an extensive investigation and didn’t alert its inspector general. The Fed didn’t publicly disclose the results of the probe until March this year, under pressure from both Democratic and Republican members of Congress.
Lacker, 61, became president and CEO of the Federal Reserve Bank of Richmond on Aug. 1, 2004. He is a member of the policy-setting Federal Open Market Committee.