Three influential senators—Rick Scott (R-FL), Elizabeth Warren (D-MA), and Cynthia Lummis (R-WY)—have sent a sharp letter to Federal Reserve Chairman Jay Powell, demanding an explanation after the Fed’s own Inspector General (IG), Michael Horowitz, actively lobbied Capitol Hill offices to oppose bipartisan legislation that would establish a truly independent, Senate-confirmed IG for the central bank.
The senators’ letter follows a bipartisan majority vote in the Senate supporting their legislation, which aims to address what they call a “clear conflict of interest” in the Fed’s current oversight structure.
IG’s Conflict of Interest Concerns
Currently, the Fed’s IG is appointed, reports to, and is paid by the Federal Reserve Board, a structure the senators argue compromises the watchdog’s independence. In their letter, they express “major concerns” that Horowitz, who is supposed to serve as an ethics watchdog, would advocate against a bill designed to fix a reporting structure that “incentivizes him to overlook violations, do the bidding of Powell and the Federal Reserve Board, and shield bad actors.”
READ: ‘Hamas Subsidiary’: Trump’s Ceasefire Plan Axes UNRWA From Gaza Aid Role
“It is concerning and perplexing that some of your employees of the Federal Reserve would devote significant time and energy advocating against legislation that would implement healthy oversight and ensure the Fed and its employees are held accountable,” the senators wrote.
They specifically question whether Chairman Powell or any other Fed staff “in any way directed or suggested that Mr. Horowitz come to Congress to advocate against the creation of a truly independent inspector general at the Federal Reserve.”
Call for Transparency and Accountability
The push for an independent IG comes amidst recent high-profile scandals, including reports of misconduct, mismanagement, and conflicts of interest at the Fed. The senators argue that a truly independent IG, appointed by the President and confirmed by the Senate like those at most other major agencies, is essential to restore public trust.
Instead of supporting a bill that would create this independence, the senators assert that the current IG is “working to maintain the status quo—making it easier for the Fed and its IG to shield bad actors.”
The letter requests that Chairman Powell provide a public, written explanation for the opposition from his office and employees to the proposed independent IG and other efforts to bring accountability to the central bank.
The American people, the senators conclude, “deserve a Federal Reserve that is committed to proper oversight, accountability, and transparency.”
Please make a small donation to the Tampa Free Press to help sustain independent journalism. Your contribution enables us to continue delivering high-quality, local, and national news coverage.
Sign up: Subscribe to our free newsletter for a curated selection of top stories delivered straight to your inbox.
