You are here
Treasury hides lots more Plunge Protection Team minutes
Plot Thickens in Battle of 'The Plunge'
By John Crudele
New York Post
Thursday, February 11, 2010
The Treasury Department has records of the secret meetings that its President's Working Group on Financial Markets held to discuss the troubled financial markets, after all.
That doesn't mean Washington wants us to know what was discussed, or whether Wall Street executives were in the meetings.
The working group was founded by President Reagan back in 1989, after the stock market nearly sustained its second big crash in two years.
Placed under the Treasury's jurisdiction, it lay dormant for years. It has been nicknamed the Plunge Protection Team because many people -- including me -- believe that in recent years it has been used to stabilize markets.
If so, the PWG could have encouraged the misconception that the stock market was a lot less risky than it really was. In that sense, the PWG would have been instrumental in inflating the stock bubble that burst in 2008, costing a lot of Americans their savings.
The PWG operates in total secrecy. Members include the heads of the Treasury, the Federal Reserve, and financial exchanges, but there is no record of who else participates.
It's been suspected that under Hank Paulson, the former chairman of Goldman Sachs who left the Treasury secretary post last year, Wall Street kingpins were brought into the circle.
The reasoning: "Market participants," as Paulson liked to call them, could best help fix problems. At the same time, they would be free to use these invaluable connections with the PWG for their benefit as well.
I first requested information on the PWG back in 2006. That request fell "through the cracks," according to an internal Treasury memo. A year and a half later, after an e-mail discussion among Treasury officials, I learned that minutes and notes of the PWG's meetings didn't exist.
In November 2007 the Treasury changed its tune and responded to my Freedom of Information Act request with 177 pages, which I described in a column as "crap."
"Included in the 177 pages that the Treasury said responded to our request on the actions of the PWG," I wrote, "were 53 pages on which something was redacted -- blacked out so that the discussion was unreadable."
Soon afterwards, the Post and I filed an appeal, saying we wanted internal documents, especially of a meeting held on Aug. 17, 2007. That was the day the Fed began a series of rate cuts, much to the delight of The Street.
Granted, I was fishing. But why should the PWG be allowed to operate unchecked inside our government? Why should this clandestine organization have so much potential control over the nation's financial markets and Americans' wealth?
Well, I got a response to our appeal -- more than two years after it was filed.
It turns out there are an additional 739 pages of PWG documents that the Treasury "withheld ... in full."
The latest Treasury letter, signed by Deputy Assistant Secretary Matthew Rutherford, said: "After carefully considering your appeal, I am affirming the actions on record referred to in your appeal."
Rutherford said the 739 new pages "concerns certain inter-and-intra agency communications protected by the deliberative process privilege."
It continued: "The material redacted pursuant to the deliberative process component subsection (b) (5) was determined to be both predecisional and deliberative." It was deliberative "in that it contains personal opinions, analyses, advice, thought processes, strategies, and recommendations, reflecting the 'give and take' of the department's consultative."
I misplaced my mumbo-jumbo-to-English dictionary, but I'll do my best to interpret.
The Plunge Protection Team either made "decisions" or contributed to decisions being made by others that it doesn't want us to know about. And this was in 2007 -- well before the so-called financial meltdown that gave Paulson and his crew a free hand.
What was the PWG consulting with Treasury and the Fed on? Rate cuts? Market-rigging operations? The decor of then-Treasury Secretary Paulson's office?
Since we already know about Paulson's exces sively close relationship with Goldman Sachs, shouldn't the Treasury at very least let the public know what sort of chatter was in those 739 pages?
John Crudele is business columnist for the New York Post.
* * *
Support GATA by purchasing a colorful GATA T-shirt:
Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:
Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon:
* * *
Help keep GATA going
GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:
To contribute to GATA, please visit: