Bloomberg Sues The Fed For Disclosure

Lost in the wake of Henry Paulson’s announcement Wednesday that Treasury is “changing direction” in how it doles out money in the bank rescue plan is a little-noticed lawsuit filed last Friday by Bloomberg LP, the business news wire service. It is suing the Federal Reserve Board’s governors for public records that would answer two simple questions: Who is receiving $2 trillion in Fed loans and what collateral are taxpayers getting to support them?

That’s trillion, with a “t.”

And, yes, as hard as it is to believe, taxpayers don’t know the identity of the borrowers to whom they are lending. They also don’t know what kind of junk — Stocks? Bonds? Three milk cows and a ’69 Camaro? — they are getting to collateralize the federal loans.

The Bloomberg lawsuit is Bloomberg LP v. Board of Governors of the Federal Reserve System, 08-CV-9595, U.S. District Court, Southern District of New York (Manhattan).