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Meet Seth Carpenter - Janet Yellen's Choice Of "Fed Leak" Scapegoat

With the "above the law" Federal Reserve coming under increasing pressure to answer a Senate investigation's questions about the 2012 "leak", it appears the proximity of the probe to Janet Yellen, has forced The Fed to 'fess up and throw someone under the bus. Meet Seth Carpenter, a nominee for assistant Treasury secretary for financial markets...

As The Wall Street Journal reports, probes into the 2012 leak of sensitive Federal Reserve policy information are widening further, with a Senate committee scrutinizing a former Fed official nominated for a position in the Obama administration.

The Senate Finance Committee has been looking into whether the official, a Treasury Department nominee who worked as a top Fed economist at the time of the leak, relayed market-sensitive information from the Fed to policy research firm Medley Global Advisors, which in turn shared the details with its Wall Street clients, according to people familiar with the matter.




The Senate committee is looking into whether Seth Carpenter, a nominee for assistant Treasury secretary for financial markets, played a role in the 2012 leak. The panel is charged with approving nominees to senior-level positions at the Treasury Department.



A person familiar with the matter said Thursday Mr. Carpenter has told the Treasury Department he never had any contact with anyone at Medley. The person added that even before the nomination, both the Treasury and the White House looked into whether Mr. Carpenter was involved, including reviewing the findings of the Fed’s inspector general, and found no evidence linking him to the leak.


Mr. Carpenter didn’t respond to a request for comment on Thursday. Spokesmen for the Fed and White House declined to comment on the Senate inquiry.

The Fed conducted its own investigation in late 2012 and early 2013 that found a “few” Fed staffers had contact with Medley, according to a memo summarizing the investigation, but it didn’t identify the people. The Fed has said it was unable to determine who provided information to Medley. Mr. Carpenter hasn't been accused of being the source of the leak.

The spokeswoman wouldn’t say if the committee’s review of the leak has stalled Mr. Carpenter’s nomination. It has been more than a year since Mr. Obama tapped Mr. Carpenter for the position, and the committee has yet to schedule a hearing on the nomination.


Mr. Carpenter “is going through the same bipartisan nomination process as every nominee referred to the Finance Committee,” said spokeswoman Julia Lawless.

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Whether or not Mr Carpenter is guilty, we wish him luck.

What better scapegoat... Republicans get to claim the scalp of an Obama nominee; and The Fed gets to point to lower level staff - not Janet - as the problem and will, we are sure, begin to firm up internal controls over sensitive information.