On October 24, a bipartisan group of senators sent a letter to Fed Chair Jerome Powell requesting a public explanation regarding opposition by current and previous inspectors general of the Fed to proposed legislation that would create an independent, Senate-confirmed inspector general at the central bank. The letter, signed by Senators Rick Scott (R-FL), Elizabeth Warren (D-MA), and Cynthia Lummis (R-WY), stated that the current Fed inspector general visited congressional offices and contacted the senators personally to express concerns and advocate against the bill.
The senators, in turn, expressed concern that the Fed’s inspector general, whose role they contended was to serve as an “ethics watchdog,” would oppose efforts to increase oversight and accountability. They argued that the current structure — whereby the Fed appoints, oversees, and compensates the inspector general — creates a conflict of interest, potentially undermining the ability of the inspector general to act on reports of misconduct or mismanagement. The letter asked Powell to explain publicly the reason for the Fed’s opposition to an independent inspector general and to clarify whether he or other Fed staff encouraged the current inspector general to oppose the legislation.
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