Magazine article American Banker

Gonzalez Raps Fed for Paying Staff's Private Memberships

Magazine article American Banker

Gonzalez Raps Fed for Paying Staff's Private Memberships

Article excerpt

WASHINGTON -- House Banking Committee Chairman Henry B. Gonzalez reprimanded the Federal Reserve on Thursday for paying employees' membership fees in private organizations.

According to documents obtained by Congress, the Fed spent $346,257 in 1990 on private memberships. While many of the expenditures were for professional groups like the American Bar Association and the American Economics Association, others went to social and civic groups like the Rotary Club, Toastmasters, and Boy Scouts.

In a letter to Fed Chairman Alan Greenspan, the Texas Democrat urged that the entire organization's policy be brought in line with that of the federal government.

Done at District Level

Fed spokesman Joseph Coyne said the Washington-based Board of Governors already follows federal standards on private memberships: Government agencies cannot pay for them unless specific exceptions are made by Congress.

Each of the 12 district banks has its own Policy on such memberships, he said, but in general they pay only for those that serve the interests of the Fed.

"Selecting favored clubs and associations is not a proper function for the central bank," said Rep. …

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