Watchdog raises questions about Fed and Pentagon use of emergency aid
A bipartisan US watchdog reported that the Federal Reserve had set aside its recommendation to stop buying corporate bonds and criticized the Defense Department’s response to an emergency loan investigation.
The Congressional Oversight Commission, responsible for monitoring pandemic relief funds at the Treasury Department and the Fed, noted that the central bank continued to buy corporate debt even after the panel told it to. unanimously recommended to stop.
In one report issued The panel on Friday also called the Pentagon’s delay in answering questions about a $ 700 million Treasury loan granted in consultation with the Defense Department “inexcusable.”
The Fed bought an additional $ 158 million in secondary market business loans over the past two weeks, bringing the total to $ 13.4 billion from $ 13.2 billion, according to the report. But in mid-October, the commission recommended that the liquidity facility stop shopping.
The four members of the bipartisan panel – who otherwise often disagreed about the need for Fed loans – all agreed that market conditions had stabilized and central bank intervention was no longer necessary.
The report also says the Defense Department was “incomplete” in responding to questions asked in July about a $ 700 million loan to a trucking company. YRC Worldwide Inc. The committee questioned whether YRC qualifies for the money, which is intended for uses critical to national security.
The commission also expressed concerns over whether YRC’s “precarious” financial situation could result in the loss of taxpayer dollars. The Kansas-based company, which ships electronics and supplies to military sites around the world, is at risk of bankruptcy due to a heavy pension burden and has been classified without investment for more than a decade, according to the panel. said in july.
The commission is a bipartisan panel, with two Democrats – Representative Donna Shalala and Elizabeth Warren’s former aide Bharat Ramamurti – and two Republicans – Senator Pat Toomey and Representative French Hill. It has operated without a president to serve as a tiebreaker since its inception in March; House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell were supposed to jointly appoint a leader.