Report: Charter Schools Pose $54M Fraud Risk
Utica Observer-Dispatch - December 13, 2014, by Alissa Scott - Charter schools have been accused of posing a $54 million fraud risk to taxpayers, according to a new report.
The Alliance for...
Utica Observer-Dispatch - December 13, 2014, by Alissa Scott - Charter schools have been accused of posing a $54 million fraud risk to taxpayers, according to a new report.
The Alliance for Quality Education said vulnerabilities in the state’s charter system potentially could cause millions of dollars in fraud this year alone.
“There’s two parts of operating a charter,” said Kyle Serrette, director of the Education Center for Popular Democracy. “You need good educators — you have to provide academics — and you also need to know how to run a business. … What we’re seeing is folks that don’t know how to do either.”
Jessica Mokhiber, communications director of the Northeast Charter Schools Network, doesn’t agree with the report.
“Charter schools in New York are the most accountable public schools there are,” she said. “If they don’t perform, they close. Each year they are subject to outside audits. If they mismanage their finances, they close.”
The Utica Academy of Science, the city’s sole charter school, declined to comment on the report. Kelly Gaggin, chief communications officer of Science Academies of New York Charter Schools, said the school wants to wait until the comptroller report — the first audit it’s had since its founding two years ago — is released.
She said this will allow the school to “provide current examples and direct correlations that illustrate the checks and balances that are implemented to eliminate opportunities for malfeasance and provide exceptional stewardship of funds.”
They expect the report to be released early next year.
The AQE report found that 24 percent of charter schools in New York have been audited. The Comptroller’s Office audits about 2 percent every year, it said.
Part of what the agency is recommending is to have schools audited regularly with an external system to catch any internal flaws.
“A school could have not committed fraud in 2010, but they did in 2014,” Serrette said. “We’re spending $1.5 billion on charter schools. We need a system in place that makes sure those dollars are reported in some correct way.”
The most alarming part, Serrette said, is that 95 percent of the time the comptroller checked into a charter school’s finances, he found issues — some really bad, some just sloppiness.
Mokhiber said to “consider the source of the report.”
“These are groups who are trying every trick in the book to deny school choice to parents who have no other option,” Mohkiber said.
“The Utica Academy of Science charter school was started by the founders of the Syracuse Academy of Science charter school, which is a highly successful school with a track record of academic achievement,” Mohkiber said. “The Utica school is providing families with another public school option. The school emphasizes a science and technology education in a college prep setting, which sets students up for success in college or career.”
Either way, Serrette said this is something taxpayers should be paying attention to. And while it would cost them more money to hire extra auditors to check on all of the state’s charter schools, it will save money in the long run.
“You could hire more auditors to look at charter schools for $5 million, but if you end up catching $10 million of mismanagement, you’re $5 million ahead,” Serrette said.
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The Team That Helped Elect Alexandria Ocasio-Cortez Has Its Next Mission: Lifting Kerri Harris Over Sen. Tom Carper
The Team That Helped Elect Alexandria Ocasio-Cortez Has Its Next Mission: Lifting Kerri Harris Over Sen. Tom Carper
That volunteering eventually morphed into becoming a full-time community organizer, working both for Achievement Matters, which aims to close the educational achievement gap, and with the Center...
That volunteering eventually morphed into becoming a full-time community organizer, working both for Achievement Matters, which aims to close the educational achievement gap, and with the Center for Popular Democracy. The tools she’s picked up as an organizer are now being put to work in her Senate race.
Read the full article here.
Cash Bail Fuels the Prison Industrial Complex. But We Can Stop It.
Cash Bail Fuels the Prison Industrial Complex. But We Can Stop It.
From 2015 to 2018, the homeless population in Los Angeles rose from less than 29,000 to 59,000. Many of those homeless Angelenos were formerly incarcerated, and many will again be incarcerated for...
From 2015 to 2018, the homeless population in Los Angeles rose from less than 29,000 to 59,000. Many of those homeless Angelenos were formerly incarcerated, and many will again be incarcerated for being homeless. Yet, according to the Center for Popular Democracy’s “Freedom to Thrive” report, Los Angeles spends 25.7% of its general fund budget on policing compared to a mere 3 percent to support nondepartmental “General City Purposes,” which includes city council spending on jobs, youth, homeless services, and substance abuse programs.
Read the full article here.
Economic Inequality: Safe Words, at Last
OZY - December 23, 2013, by Pooja Bhatia - For decades, talk about economic inequality was taboo. Those who tried were met with accusations of sour grapes, inciting...
OZY - December 23, 2013, by Pooja Bhatia - For decades, talk about economic inequality was taboo. Those who tried were met with accusations of sour grapes, inciting class warfare, or — gasp! — advocating socialism.
But such rhetorical bludgeons appear to have lost force in recent years, and words like “inequality” and “economic fairness” have at last found a place at the table of mainstream American political discourse. It’s not quite the head of the table, but it’s not the servants’ quarters either.
Words like “inequality” and “economic fairness” have at last found a place at the table of mainstream American political discourse.
“The core issue of economic justice has been getting more traction now than during most of my time in organizing,” says Andrew Friedman, who’s been a progressive organizer for more than 15 years and now co-directs the Center for Popular Democracy in New York. Derecka Mehrens, executive director of labor-oriented think tank Working Partnerships USA in San Jose, Calif., agrees: “There’s been a sea change in how and even whether we talk about inequality.”
The signs are everywhere. In his November apostolic exhortation, the pope warned of the “tyranny” of unfettered capitalism and called “an economy of exclusion and inequality” sinful. Clear majorities of Americans support hiking the minimum wage and other policies that aim to reduce the wealth gap. Earlier this month, President Obama positioned inequality and lack of social mobility as the “defining issue of our time.” Mayors-elect of major cities all made economic inequality central to their platforms. And this year’s National Book Award for nonfiction went to George Packer’s The Unwinding, which chronicles rising social and economic inequality in the United States.
Inequality talk is no longer off-limits for a simple reason: The lot of many has stagnated or worsened over the past decade, in some cases severely.
Some credit the 2011 Occupy movements for popularizing economic inequality. (Or blame it, depending on their perspective.) But the main reason inequality talk is no longer off-limits is probably simpler: The lot of many has stagnated or worsened over the past decade, in some cases severely. Some 10 million people lost their homes in the Great Recession. Although unemployment is at a five-year low, the decline is partly because many have stopped looking for work.
As OZY noted a few weeks ago, the lag between technical “recovery” and job growth is lengthening, and these days it’s lingering four to five years. No wonder the Great Recession’s rough ride seems endless. Moreover, while worker productivity has increased over the past decade, real wages have stagnated or declined — leaving the average worker to wonder just where the gains from productivity are going.
“They hear the news that the stock market is climbing and say, Oh really?” Mehrens says.
Lovely A. Warren won election as mayor of Rochester last month with a campaign lamenting what she called the “two Rochesters,” challenged by crime and poverty, but also boasting prosperous neighborhoods.
Economic inequality has been growing since at least the early 1980s. But it was harder to complain about during the Clinton years, when broad-based growth lifted all boats, yachts and dinghies alike. Economic inequality grew during the Bush years too, but those were the days of subprime homeownership and plasma TVs for all. Five years after the collapse of that easy-credit economy, most Americans are still hurting. The average household has recovered less than half the wealth it lost during the recession.
As a result, income inequality has become a winning issue in some cities. The mayors-elect of New York, Pittsburgh and Minneapolis made economic justice a central plank of their platforms — and did so despite naysayers and with newfound success. New York Mayor-elect Bill de Blasio’s “tale of two cities,” for instance, was not much different from Fernando Ferrer’s campaign theme in 2005 or Ruth Messinger’s in 1997 — but only in the New York of 2013 did it resonate.
It was harder to complain about during the Clinton years, when broad-based growth lifted all boats, yachts and dinghies alike.
Not that the discursive war has been won, mind you. Plenty of people and conservative think tanks still argue that inequality has nothing to do with poverty. Winning a war of words wouldn’t be enough anyway, organizers say: “We need to figure out how to use this sea change in how we talk about inequality to how we act against inequality,” says Mehrens.
The newfound cache of certain phrases has had some perverse effects. Developers and other big employers have latched onto terms like “living wage” but not always with worker-friendly intentions, says Lee Strieb, a researcher with labor organization Unite Here. Developers have “attempted to wrap themselves in the flag of the living wage, almost as a shield to avoid unionization,” says Strieb. ”There is a heightened sensitivity to the need to address [the wage] issue — but to the extent they can address it in a superficial way, they will.”
Mr. de Blasio’s relentless critique of economic inequality in New York seemed to resonate with voters, who elected him in a landslide.
The shift could signal a readiness to engage meaningfully with issues like the living wage or tax increases on top earners.
It’s unclear whether 2014 will set in motion changes to our income distribution. Mayors alone may have little power to tackle the issue. They usually can’t run big deficits and, in cities like San Francisco and New York, space for affordable housing is hard to find. Most important, mayors can’t singlehandedly restore the middle-class jobs that disappeared during the recession.
Yet the shift in tone and rhetoric is significant and could signal a readiness to engage meaningfully with issues like the living wage or tax increases on top earners. Consider Cam Kruse, 72, a mostly retired civil engineer who is active in ISAIAH, a social justice organization of about 100 churches in metropolitan Minneapolis. Kruse believes in small government. When working full time, he perched in the top one to three percent of earners. And he was a Republican for most of his adult life.
But earlier this year he found himself urging the state legislature to raise tax rates on top earners, which, he said, had fallen through the decades. Growing “gaps” in education, health, housing and transportation worried him. “My success, and that of all the other top earners in Minnesota, has been based on the investments that people before us made,” he testified. “It is our turn to give back and make investments for those who will be our future.”
The tax increase passed.
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Voices: A middle ground in the immigration debate
MIAMI — Not that long ago, part of my morning routine involved catching up on what states around the country were doing that day to crack down on illegal immigration.
That habit started in...
MIAMI — Not that long ago, part of my morning routine involved catching up on what states around the country were doing that day to crack down on illegal immigration.
That habit started in 2010, when Arizona passed a law empowering state police to enforce immigration laws. One by one, other states started following suit. Utah. Indiana. South Carolina. Alabama wanted to check the immigration status of children enrolling in its public schools. Georgia was so successful driving undocumented immigrants out of the state that it turned to prison labor to harvest its abandoned crops, a plan that quickly failed once the prisoners started walking off the job.
Then, something changed. Those laws started getting struck down in courts. Others states halted their efforts to pass Arizona copycat bills. And before I knew it, I was drinking my morning glass of orange juice while reading through articles about local efforts to make life easier for undocumented immigrants.
The most interesting of those efforts has been a push to provide local identification cards to undocumented immigrants. The idea is simple: A city or county creates a "municipal ID" that those immigrants can use to interact with city officials, identify themselves to police officers and even open bank accounts so they're not easy, cash-carrying targets for would-be robbers. The IDs aren't substitutes for driver's licenses or federally-accepted forms of ID — for example, you can't get through security at an airport or board a flight with one.
The number of places approving those IDs has surged in recent months, with Hartford, Ct., Newark, N.J., Greensboro, N.C., and New York City approving them.
The wave of cities adopting municipal IDs doesn't mean the country has suddenly turned completely immigrant-friendly. Just tune in to the next Republican presidential debate to see how many candidates are proposing mass deportations, cutting down on legal immigration channels and missile-firing drone patrols along the southwest border. Or watch as states try to crack down on sanctuary city policies within their borders.
But what the cities adopting municipal IDs show is that there may be a middle ground in the immigration debate that has been so incredibly polarized in recent years. On the one side, we had states like Arizona passing laws to go after undocumented immigrants. On the other, we had cities and counties like San Francisco adopting "sanctuary city" policies that have allowed some undocumented immigrants with violent, criminal backgrounds to walk free.
The reason we've seen that pendulum swing so wildly in opposite directions is that Congress and the White House have been unable to come together and fix our nation's broken immigration system. That's why millions of undocumented immigrants continue pouring over our southwest border. That's why millions of legal immigrants can stay in the country long past the time their visas have expired. And that's why Americans can continue hiring those undocumented immigrants with little fear of punishment.
What's left is a system that has effectively allowed 11 million undocumented immigrants to stay in the country. And whoever you blame for that, they've been left in a legal limbo that makes life incredibly difficult for them.
Take Rosana Araújo, an Uruguayan who visited Miami on a three-month visa 13 years ago and never went back. Araújo has spent her years here cleaning houses, warehouses, day care centers, whatever she could do to get by. But the 47-year-old said the fact that her only form of identification is her Uruguayan passport has made her life difficult in so many ways.
She can't use a public library. She can't get past the security desk of local hospitals to visit sick relatives or friends. She said she couldn't even return a pair of pants atWalmart because they insisted on a Florida ID card.
Most important, Araújo said she didn't call police after she was sexually assaulted in 2009 because she had heard from other undocumented immigrants who had been victims of sexual violence that they were caught up in immigration proceedings after reporting the crime.
"The first thing they do is ask for your identification. And the passport for them isn't valid," she said. "That makes you far more vulnerable that the police are going to pick you up for not having identification."
Now Araújo is helping several groups push government agencies in Miami-Dade County to adopt the municipal IDs. The Center for Popular Democracy, a group that advocates for immigrant rights, estimates that two dozen other cities, including Phoenix, New Orleans and Milwaukee, are now considering adopting the program
Municipal IDs won't solve our nation's immigration problem. But they just might be the best short-term solution to ensure undocumented immigrants aren't completely helpless as we all wait for Washington to find a solution.
Grupos cívicos piden a Harvard desvincularse de la deuda de Puerto Rico
Grupos cívicos piden a Harvard desvincularse de la deuda de Puerto Rico
Los grupos que participan de la convocatoria están comandadas por el “Center for Popular Democracy”, e incluyen a organizaciones de estudiantes de esas universidades, así como “Make the Road New...
Los grupos que participan de la convocatoria están comandadas por el “Center for Popular Democracy”, e incluyen a organizaciones de estudiantes de esas universidades, así como “Make the Road New York”, “Make the Road Pennsylvania”, “Make the Road Connecticut”, “New York Communities for Change”, and “Organize Florida.”
Lea el artículo completo aquí.
Parents as Decision Makers
All the time, parents are making decisions about what happens in their children’s lives. The same needs to be true when it comes to choosing what happens with their child’s academic education. It...
All the time, parents are making decisions about what happens in their children’s lives. The same needs to be true when it comes to choosing what happens with their child’s academic education. It is more than just choosing a school but also what happens in the school building. With the sustainable community school model, parents are very much part of the decision-making process. This goes beyond the realm of engagement but views them as collaborators in the achievements of the school. The Community Schools Toolkit created by The Center for Popular Democracy signifies the importance of this involvement by stating, “parent engagement is promoted so the full community actively participates in planning and decision-making.” It is important to consider parents in the same manner as teachers and administrators although they provide a different perspective. It is like pieces to a puzzle, each one has a part to contribute which must be done for it to be whole. Parents must be at the table with equal input regarding the daily activities that happen in the school building from academics to after-school programming and other aspects such as community events.
It is quite understood, parents are not formally trained as educators; however, they are the first teachers of children. This is a shared experience we all have as adults. Yes, some were better than others but it was those things our parents taught us which have a lasting impact. As a result, parents possess the necessary qualities to be involved with the process of choosing curriculum, managing the budget, and identifying staff, teachers, and administrators who are a good fit with the school’s climate. The parents have a particular perspective when it comes to their involvement and their inclusion and embracement would create a cohesive culture for success. They need not be considered an option but one of the main individuals in building the school’s environment conducive to learning.
This role of parent involvement is different and separate from PTAs or PTOs. These organizations are representative of an existing institution within the school. It may not necessarily project the sole interests of parents since it is also an organization comprised of other members. Additionally, the groups are connected to a national organization where the interests may align with corporations. Parents as decision-makers bring a different viewpoint as a result of their concern for children and the community and not institutions or corporations.
The relationship between the school and parents needs to be one of partnership instead of a dichotomous one. They both are involved with developing the child to become a successful adult who can function as a productive member of society. One thing a parent is free to do when compared to those who work for the school district is aggressively advocate. There is every reason to take the risk where the answer may be no for others. They aren’t at risk of losing their job, adverse disciplinary action, or retaliation. So, parents can do what the others can’t which is lobby elected officials, make demands with the central office leadership and Superintendent, speak out against the unequal and unfair treatment, and actively galvanize all stakeholders to be involved in the process of making not only the school better but the overall community.
Since parents possess a variety of resources, it’s proper for them to assist with the development of the school. Some of these assets which can be contributed are time, talents, knowledge, and skills. For example, I am a Social Worker by profession and I can be utilized to provide a range of services to the school community. A benefit with having a parent involved is their existing relationship with the school along with their knowledge of the community, and their vested interest of the best possible outcome for the children, the school, and neighborhood.
There are times when parents are regarded as an after-thought and advisors. Ultimately, the successful outcome of the school is comprised of the necessary ingredient which is parent engagement. But, parents as decision makers goes beyond the realm of engagement to the extent of involvement in every aspect of the school’s functioning. Recently, there was reporting of lead levels above the EPA threshold in Newark, NJ public schools. Although this was an ongoing problem for some years and known to Newark Public School officials, this information wasn’t disclosed to the parents or the community. It is important for parents to be provided with the necessary information so they can determine how to proceed with it. Also, their inclusion recognizes the link between the overall success of the school and the progressive development of the community. When all of us embrace the inclusion of the children’s first teachers in the process of academic development, we will understand the essential impact of parents as decision-makers.
By Viva White
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Does the Federal Reserve need reforming?
First, the Federal Reserve is a pretty complex place. There’s the Fed in Washington we talk about every time interest rates are changed (or not changed). Then there are 12 regional Federal...
First, the Federal Reserve is a pretty complex place. There’s the Fed in Washington we talk about every time interest rates are changed (or not changed). Then there are 12 regional Federal Reserve Banks, each with a board of directors of nine people.
That’s where the Democratic Party, and activist groups on the left, are aiming their fire.
Currently, three of those nine directors are representatives of private banks (private banks are members of the regional Federal Reserve Banks). Another three are community representatives, but also elected by private banks. The remaining three are appointed by the Board of Governors.
Critics on the left, in addition to calling for more diversity within the Federal Reserve system, also want private banks gone from regional fed banks. “These private banks get a say on who’s on those board of directors and they get representatives on those boards of directors,” said Ady Barkan, campaign director of Fed Up, a left-leaning group that’s pushed for changes at the fed. “It’s an egregious example of regulatory capture.”
Barkan says that regional bank presidents tend to be more conservative, more hawkish on interest rates, than their counterparts in Washington D.C. He blames both a lack of diversity and the influence of private banks. “You can’t imagine for example that cable networks would get some special role in choosing people on the FCC,” said Andrew Levin, professor of economics at Dartmouth College.
But the fed has already undergone some major reforms to limit influence. Under Dodd Frank, the private-bank representatives who serve on regional boards don’t get to nominate regional presidents anymore. “The bankers themselves are not involved in the choice of that person,” explained Stephen Ceccetti, professor of economics at Brandeis International Business school. “That is the person who participates in monetary policy discussions and decisions.”
Ceccetti also argues that the conservative, hawkish leanings of some regional Fed presidents are actually at odds with bank profits. “Higher interest rates don’t help banks,” he said.
Lastly, he said, regional Fed banks aren’t responsible for actually regulating banks, “they don’t even get to see the stuff.”
Chair Janet Yellen herself has said that if the fed were redesigned from scratch, it would probably look pretty different than it did a hundred years ago, but, in her view, it works pretty well. Ceccetti agreed, saying “I don’t see that anyone’s been able to show that there’s any harm or pressure applied by the banks through their directors to the policy of the Federal Reserve.”
Changing the structure of the fed would require an act of congress.
By SABRI BEN-ACHOUR
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Nueva York pagará abogados a algunos inmigrantes
El Nuevo Herald - July 18, 2013, by Claudia Torrens - Nueva York se prepara para dar otro paso en su tradición de ayuda a inmigrantes: planea pagar los abogados de oficio que necesitan cuando se...
El Nuevo Herald - July 18, 2013, by Claudia Torrens - Nueva York se prepara para dar otro paso en su tradición de ayuda a inmigrantes: planea pagar los abogados de oficio que necesitan cuando se presentan ante un tribunal de inmigración para defenderse de un orden de deportación.
Para finales de este año o principios de 2014, algunos inmigrantes, autorizados o no, que enfrenten la deportación podrán presentarse ante el juez de inmigración con un abogado de oficio pagado con fondos municipales, reduciendo así sus posibilidades de ser deportados. Activistas, un magistrado federal y funcionarios locales planean anunciar el viernes que el gobierno municipal ha destinado 500.000 dólares a financiar un programa piloto que ofrecerá representación legal a inmigrantes.
Brittny Saunders, de la organización Center for Popular Democracy, dijo a The Associated Press que es la primera vez que un programa de este tipo se implementa en una municipalidad de Estados Unidos.
"La intención es reunir información sobre los beneficios que la representación legal supone tanto para un individuo detenido y en proceso de deportación como para su familia, su comunidad y la ciudad entera", dijo Saunders. "Esperamos que este programa sea un modelo para otras comunidades en todo el país".
Los inmigrantes que acaban en los tribunales de inmigración y que enfrenten la deportación no tienen derecho a ser defendidos por un abogado de oficio. Pueden contratar a un abogado privado, pero muchos no tienen el dinero para pagar ese servicio. Es por ese motivo que el gobierno municipal, varios activistas y el juez federal Robert Katzmann han unido esfuerzos para ofrecer ayuda a inmigrantes en esta situación.
Saunders dijo que en el estado de Nueva York una media de 2.800 inmigrantes enfrenta anualmente la deportación sin acceso a asistencia legal. Muchos de ellos, explicó, con frecuencia son detenidos por infracciones a las leyes de inmigración, como quedarse en Estados Unidos una vez vencida su visa.
El Congreso debate en estos momentos una reforma a las leyes de inmigración y el proyecto de ley aprobado por el Senado hace unas semanas propone un camino a la naturalización de 11 millones de inmigrantes sin autorización para vivir en el país. El gobierno del presidente Barack Obama deportó a más de 400.000 inmigrantes en el año fiscal 2012, una cifra récord.
El juez federal Katzmann y su grupo "Study Group on Immigrant Representation" publicó un informe en el 2011 que indicaba que 18% de los inmigrantes detenidos en Nueva York que cuentan con abogado salen adelante con su caso, mientras que entre los que no tienen asesoría jurídica, la cifra es de sólo 3%.
Entre los inmigrantes no detenidos, 74% sale adelante, mientras que entre los que no tienen asesoría legal la cifra es de 13%, señala el informe.
El programa piloto que se planea presentar el viernes — llamado "New York Immigrant Family Unity Project" (Proyecto por la Unidad Familiar de los Inmigrantes en Nueva York) — necesita escoger a través de un proceso público de varios meses a una organización sin ánimo de lucro que ofrezca sus abogados para la representación legal.
La presidenta del Concejo Municipal de Nueva York, Christine Quinn, ha sido una de las impulsoras del financiamiento del programa. Quinn aspira a ser la próxima alcaldesa de la ciudad durante elecciones municipales en noviembre.
En Nueva York viven más de tres millones de personas nacidas en otros países, según información del Censo.
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Regional Feds' head-hunting under scrutiny over insider bias, delays
Efforts to fill top positions at some U.S. Federal Reserve regional branches are casting a spotlight on a decades-old process that critics say is opaque, favors insiders, and is ripe for reform....
Efforts to fill top positions at some U.S. Federal Reserve regional branches are casting a spotlight on a decades-old process that critics say is opaque, favors insiders, and is ripe for reform.
Patrick Harker took the reins as president of the Philadelphia Fed this week, in an appointment that attracted scrutiny because he served on the committee of directors that interviewed other prospective candidates for the job he ultimately took.
The Dallas Fed has been without a permanent president for more than three months as that search process stretches well into its eighth month. And the Fed's Minneapolis branch abruptly announced the departure of its leader, Narayana Kocherlakota, more than a year before he was due to go, with no replacement named to date.
The delays and reliance on Fed employees in picking regional Fed presidents can only embolden Republican Senator Richard Shelby to push harder for a makeover of the central bank's structure, which has changed little in its 101 years.
A bill passed in May by the Senate Banking Committee that Shelby chairs would strip the New York Fed's board of its power to appoint its presidents. And it could go further, given the bill would form a committee to consider a wholesale overhaul of the Fed's structure of 12 districts, which has not changed through the decades of shifting U.S. populations and an evolving economy.
The bill is part of a broader conservative effort to expose the central bank to more oversight, and some analysts saw the Philadelphia Fed's choice as reinforcing the view that the Fed needs to open up more to outsiders.
Nine of 11 current regional presidents came from within the Fed, a proportion that has edged up over time. Twenty years ago, seven of 12 were insiders.
"The process seems to create a diverse set of candidates in which the insider is almost always accepted," said Aaron Klein, director of a financial regulatory reform effort at the Bipartisan Policy Center.
Since it was created in 1913, the central bank's decentralized structure was meant to check the power of Washington, where seven Fed governors with permanent votes on policy are appointed by the White House and approved by the Senate.
The 12 Fed presidents who are picked by their regional boards usually vote on policy every two or three years, and they tend to hold more diverse views.
Former Richmond Fed President Alfred Broaddus told Reuters the regional Fed chiefs have more freedom "to do and say things that may not be politically popular" because they are not politically appointed. "On the other hand, there is the question of legitimacy since they are appointed by local boards who are not elected."
"TONE DEAF"
Two-thirds of regional Fed directors are selected by local bankers, while the rest are appointed by the Fed's Board of Governors in Washington.
Critics question how well those regional boards - mostly made of the heads of corporations and industry groups meant to represent the public - fulfill their mission.
Last year, a non-profit group representing labor unions and community leaders organized by the Center for Popular Democracy, urged the Fed's Philadelphia and Dallas branches to make the selection of their presidents more transparent and to include a member of the public in the effort.
Philadelphia's Fed in particular proved "tone deaf" in its head-hunting effort, said Lou Crandall, chief economist at Wrightson ICAP in Jersey City, New Jersey.
Harker was a Philadelphia Fed director when the board started looking to replace president Charles Plosser, who left on March 1, and he was among the six directors who interviewed more than a dozen short-listed candidates for the job, according to the Philadelphia Fed.
But on Feb. 18, Harker floated his own name, recused himself from the process and a week later his colleagues on the board unanimously appointed him as the new president.
While the selection follows Fed guidelines and was approved by its Board of Governors, it raised questions of transparency and fairness.
"The Philadelphia Fed's search process might have made perfect sense in a corporate environment, but is obviously problematic for an official institution," said Crandall.
The board's chair and vice chair, Swathmore Group founder James Nevels and Michael Angelakis of Comcast Corp, respectively, declined to comment, as did Harker.
Peter Conti-Brown, an academic fellow at Stanford Law School's Rock Center for Corporate Governance, and an expert witness at a Senate Banking Committee hearing this year, proposed to let the Fed Board appoint and fire regional Fed presidents or at least have a say in the selection process.
In the past, reform proposals for the 12 regional Fed banks have focused on decreasing or increasing their number and their governance.
Changes to the way the regional Fed bosses are chosen could strengthen the influence of lawmakers at the expense of regional interests.
For now, delays in appointments of new chiefs force regional banks to send relatively unknown deputies to debate monetary policy at meetings in Washington, as Dallas and Philadelphia did last month when the Fed considered raising interest rates for the first time in nearly a decade.
The Minneapolis Fed still has time to find a new president before Kocherlakota steps down at year end.
"For now the Fed criticism is just noise, mostly from Republicans," said Greg Valliere, chief political strategist at Potomac Research Group. "But once the Fed begins to raise interest rates ... then the left will weigh in as well."
(Additional reporting Ann Saphir in San Francisco; Editing by Tomasz Janowski)
Source: Reuters
4 days ago
4 days ago