Will Ethics Charges Doom Jamie Raskin's Wife's Fed Nomination?
Jamie Raskin Slapped with an Ethics Complaint Over his Wife's $1.5 Million Payout
Rep. Jamie Raskin faces an ethics complaint because of his failure to properly report his wife's massive $1.5 million stock payout from Reserve Trust shares. His wife, Sarah Bloom Raskin, has been nominated by President Biden to the Federal Reserve Board and is currently undergoing Senate confirmation.
Raskin's failure prevented timely public disclosure of the details of his wife's relationship with a company receiving regulatory forbearance. The American Accountability Foundation's (AAF) complaint alleges that Rep. Raskin failed to properly disclose the $1.5 million stock sale until nearly eight months after the fact, which is a violation of the "Stop Trading on Congressional Knowledge" (STOCK) Act.[i] The ethics complaint comes after news of the reporting violations were reported in Business Insider.[ii]
AAF Founder, Tom Jones, told Fox Business, "Sarah and Jamie Raskin are career politicians who have used the system to enrich themselves, and it is time that someone holds them accountable. If House rules are going to mean anything, the House Ethics Committee needs to open an investigation and sanction Jamie Raskin for hiding this shady stock deal from the public."[iii]
The ethics complaint highlights only one aspect of the Raskin relationship with Reserve Trust that has become a stumbling block for her confirmation as the Federal Reserve's top banking regulator.
Sen. Cynthia Lummis (R-Wy) has questioned whether Sarah Raskin used her Fed connections to help to get a Fed master account for the financial technology firm, Reserve Trust, on whose board of directors she served.[iv] Benefitting from her position as an Obama Treasury Department official, Sarah Raskin was associated with Reserve Trust from 2017 to 2019. [v] During her tenure, the company was granted a Fed charter. Their master account status gave Reserve Trust lucrative direct access to the U.S. payment system infrastructure. A waiver allowed them to move money without partnering with a bank but shielded them from the same regulatory scrutiny as banks.[vi] Sen. Lummis has questioned the role Ms. Raskin had in influencing the Fed's decision benefiting the company.
As the New York Times acknowledged earlier this week in "Biden's Pick for Top Bank Cop Faces Narrow Path to Confirmation," Raskin's nomination has received a chilly response. The paper reported that Senator Patrick J. Toomey (R-Pa), the top Republican on the committee, has sharply criticized Sarah Raskin for her climate regulation views, which he previously called "disqualifying." [vii]
Instead of fighting inflation, Sarah Raskin has previously said she wants to use the Fed's power over banks to impose credit controls on industries she opposes. She would use the Fed's regulatory power to discourage lending to traditional energy companies, although no legal authority exists for the Fed doing so.
Writing in the New York Times in May 2020, in an article "Why Is the Fed Spending So Much Money on a Dying Industry? It should not be directing money to further entrench the carbon economy….Oil, gas , and coal companies are set or are seeking to receive billions in federal aid — including at least $3.9 billion from the Paycheck Protection Program and at least $1.9 billion in tax credits tucked into the CARES Act passed by Congress."[viii]
So, while acknowledging that the "CARES Act" entitled energy firms to receive funds, apparently Raskin wanted to ignore the law because she dislikes the companies.[ix]
The Wall Street Journal commented on Raskin’s CARES Act position: "This showed colossally bad judgment. The crisis of the hour was Covid and a potential depression, not climate. Yet at that perilous moment, Ms. Raskin was urging the Fed to discriminate against an industry that employed hundreds of thousands of people. Had the Fed taken her advice, many more oil and gas producers would have gone bankrupt, and energy prices would be even higher today."[x]
Faced with the prospect of a stalled nomination, Sarah Raskin conveniently chose to disavow her own past writing. At her confirmation hearing, Sen. Toomey called her reversal "one of the most remarkable cases of confirmation conversion I have ever seen."[xi]
[ii] Democratic Rep. Jamie Raskin Violated Federal Conflict-of-Interest Law (businessinsider.com), https://www.businessinsider.com/democratic-rep-jamie-raskin-violated-federal-conflict-of-interest-law-2022-2
[ix] P.L. 116-136