Republicans are expected to boycott a Senate Banking Committee meeting Tuesday afternoon as they level ethics allegations at one of President Biden’s Federal Reserve nominees, which Democrats say are baseless and unfair.
Republicans are accusing Fed vice chair of supervision nominee Sarah Bloom Raskin of influence peddling after leaving a post in the Obama administration. Raskin, the White House, the Kansas City Fed the company she’s accused of using her influence to assist all strenuously deny the allegation.
A boycott could also affect Federal Reserve Chairman Pro Tempore Jerome Powell, who is up for another term in his post. Other nominees who were expected to get votes were Fed vice chair nominee Lael Brainard, Fed governor nominee Phillip Jefferson, and Fed governor nominee Lisa Cook.
“Committee Republicans aren’t seeking to delay her vote. We’re seeking answers,” Banking Committee Ranking Member Pat Toomey, R-Pa., said Tuesday. “Until basic questions have been adequately addressed, I do not think the Committee should proceed with a vote on Ms. Raskin.”
Because of the 50-50 split in the Senate, committees are also allocated evenly along party lines. That means if all 12 Republicans on the panel don’t show up, the committee can’t hold a vote.
Republican Sen. Jerry Moran told FOX Business’ Stuart Varney that committee Republicans told Chairman Sen Sharrod Brown they are prepared to move forward on every nominee except Raskin, and that if she is not removed from the agenda today, GOP members will boycott.
Republicans allegations against Raskin are centered around her work for Reserve Trust, a state-chartered trust company in Colorado. Raskin started there after working as a Fed governor from 2010 to 2014, and in the Treasury Department from 2014 to 2017.
Reserve Trust was denied a coveted “master account” with the Fed in 2017. But after Raskin came on as a board member for Reserve Trust she lobbied the Kansas City Federal Reserve to approve the account, Republicans allege. It was approved the next year in 2018.
“While it may be routine for your average company director to call a regional Fed bank, there is nothing routine about a former Fed Governor, like Ms. Raskin, calling the president of a regional Fed bank, with whom she previously served on the Fed’s Federal Open Markets Committee, about such a decision,” Toomey said in a letter to the Kansas City Fed last week.
“Something doesn’t smell right with the way this played out,” Sen. Cynthia Lummis, R-Wyo., said in Raskin’s hearing earlier this month.
White House spokesman Mike Gwin hit back against the implication that Raskin may have used her influence improperly.
Because RTC did not meet the definition of a depository institution, the Kansas City Fed determined RTC was not eligible for a Fed master account… After this denial, RTC changed its business model… in a manner that meant RTC met the definition of a depository institution. Because of these changes… the Kansas City Fed approved the RTC request for a master account in mid-2018.
“Sarah Bloom Raskin has committed to the strictest ethics requirements in history of any Federal Reserve Board nominee,” Gwin said. “Senator Toomey has waged a baseless smear campaign for weeks against an exceptionally well-qualified nominee without providing a single scrap of evidence to support his false claims, and his allegations have already been refuted by the Kansas City Federal Reserve Bank and the founder of Reserve Trust.”
Indeed, the Kansas City Fed said in a statement last week that the reason Reserve Trust’s second master account application was approved was not because of Raskin but because of structural changes at Reserve Trust.