By Robert A. Vella

Have you ever noticed how news events that are embarrassing or damaging to America’s ruling establishment occur when the public is paying the least amount of attention… like right now during this holiday season when most everyone is over-eating, over-drinking, dealing with family issues, traveling, and compulsively watching sports on television?  Well, here’s another such example regarding the megalomaniacal oligarchs on Wall Street and their corrupt henchmen in the Federal Reserve and in the U.S. Senate.

From ProPublicaHigh-Level Fed Committee Overruled Carmen Segarra’s Finding on Goldman:

A committee that includes senior Federal Reserve officials reviewed and overturned a bank examiner’s finding that Goldman Sachs lacked a firm-wide policy to prevent conflicts of interest, according to a top Fed official.

Bill Dudley, the head of the Federal Reserve Bank of New York, disclosed the action by the “Operating Committee” in a little-noticed aspect of his testimony last month before the U.S. Senate. Dudley said the panel was part of a new effort by the Fed to raise standards across the board by comparing  the practices and health of the nation’s banks against each other.

In his testimony, Dudley provided the Fed’s most detailed account to date of how it reversed the conclusions of Carmen Segarra, a New York Fed bank examiner who asserted that Goldman lacked the Fed’s recommended firm-wide policy to prevent conflicts of interest. Dudley told the senators that the Operating Committee had “fully vetted” Segarra’s finding but said “there was this lack of willingness to agree.” He said that while he encourages examiners to speak up, their views must be “fact based.”


Segarra was not called to testify at the Senate hearing. And in his appearance, Dudley did not detail specifically what evidence the Operating Committee considered in overruling Segarra, on what basis the decision was made, or whether it considered any of Segarra’s documentation or examination findings.

“I think the position of the senior supervisors was that there was a conflict-of-interest policy, and that is what the debate was about,” Dudley said.

As ProPublica and This American Life previously reported, Segarra secretly recorded 46 hours of internal meetings while at the Fed after encountering resistance to her examination into Goldman.

At the hearing, David Beim, a Columbia University professor, testified that the recordings “illustrated in Technicolor” the problems he found in the 2009 study of the New York Fed’s culture that Dudley had commissioned. Among other things, the study said examiners were afraid to speak up and that findings were being watered down by higher-ups and an over-reliance on consensus.


A spokesman for the New York Fed declined to respond to questions about whether the Operating Committee had reviewed Segarra’s evidence. Segarra said no one on the committee spoke with her.

Now, in light of Segarra’s case and reports that New York Fed supervisors blocked examiners from access to information at JPMorgan Chase, the Federal Reserve Board has asked its inspector general to review the communication flow from examiners to senior managers.

Contacted by ProPublica, a spokesman for the inspector general said the agency is still determining how to approach the review and did not have an expected timeframe for completion.