Massive Fed coverups revealed in hours of tapes with Goldman Sachs

Firedog Lake  - The radio program This American Life is airing parts of secret recordings made by Carmen Segarra of meetings she attended at Goldman Sachs while acting as a regulator for the Federal Reserve. Segarra reveals a culture of corruption where the Federal Reserve participated in covering up malfeasance by Goldman Sachs. She was later fired by the Fed for allegedly refusing to falsify a report to help Goldman.

But, unbeknownst to the Fed, while an examiner of Goldman Sachs Segarra made 46 hours of secret recordings of the Fed and Goldman interacting. The interactions often involved the Fed helping Goldman evade regulations and cover up misdeeds. The tapes provide overwhelming evidence – if any more evidence was needed – that the Federal Reserve is a completely and hopelessly captured regulator and that it is subservient to the people and organizations it is supposed to be overseeing.

The job right from the start seems to have been different from what she had imagined: In meetings, Fed employees would defer to the Goldman people; if one of the Goldman people said something revealing or even alarming, the other Fed employees in the meeting would either ignore or downplay it. For instance, in one meeting a Goldman employee expressed the view that “once clients are wealthy enough certain consumer laws don’t apply to them.” After that meeting, Segarra turned to a fellow Fed regulator and said how surprised she was by that statement — to which the regulator replied, “You didn’t hear that.”

This sort of thing occurred often enough — Fed regulators denying what had been said in meetings, Fed managers asking her to alter minutes of meetings after the fact — that Segarra decided she needed to record what actually had been said. So she went to the Spy Store and bought a tiny tape recorder, then began to record her meetings at Goldman Sachs, until she was fired.

“You didn’t hear that,” could be the Federal Reserve’s official motto. The Segarra revelations offer concrete confirmation that the Fed, as currently structured, is a failed institution when it comes to regulating Wall Street.

This is not surprising when you look at who staffs the Fed. Segarra’s ultimate boss was New York Fed President William Dudley who previously served as a partner at Goldman Sachs and as Goldman’s chief economist. Goldman Sachs’ co-chair of its Risk And Compliance Committees is E. Gerald Corrigan, the 10th president of the New York Federal Reserve. And around and around the revolving door goes.

Whether yet another revelation of corruption and collusion between the Federal Reserve and Wall Street banksters will induce any changes as to how the Fed operates is hard to say. But it is getting harder and harder for the Fed to plead ignorance to its own problems. Now those problems are available for all to see (and hear).