Sens. Rick Scott (R-Fla.) and Elizabeth Warren (D-Mass.) urged the Federal Reserve chair to hammer down on “improper” trade violations in a Friday letter, expressing concerns about what they described as a “culture of corruption” and called for ethics policy reform.
The duo blamed Federal Reserve chair Jerome Powell for improperly responding to a 2024 report outlining inappropriate trading, investment and disclosure activities by Raphael Bostic, the president of the Federal Reserve Bank of Atlanta.
“You allowed this culture of corruption to flourish, and were far too slow to put rules in place to address it. When you did establish these rules, they were inadequate. And now it appears that you are refusing to enforce them,” Scott and Warner wrote to Powell.
According to Warren and Scott, Bostic violated federal rules over 100 times and even destroyed evidence related to trades made between 2017 and 2022. The duo said that the Fed’s inspector general (IG) informed Powell of the matter, but the chair did not address it.
“Dr. Bostic is just the latest in a series of Fed officials that have been involved in what is now a four year old Fed trading scandal,” Warren and Scott wrote. “The IG referred the matter to you and the other members of the Board five months ago, but there has been no public indication that you have held Dr. Bostic accountable for his illicit trades.”
“These failures represent a stain on your record as Fed Chair, and have damaged the integrity and effectiveness of the Federal Reserve,” they added.
The bipartisan lawmakers not only urged Powell to adopt a stronger ethics policy in response, but also called for an independent IG after the oversight official closed Bostic’s case without providing recommendations to hold him “accountable.”
“The failure by the IG to fully hold Dr. Bostic accountable is another clear example of why the
Fed needs an independent IG,” Warren and Scott wrote, mentioning a bill they introduced that would require the president to appoint IGs and that they be confirmed by the Senate.
This call for IG independence comes on the heels of President Trump purging over a dozen IGs last month, prompting bipartisan concerns about independent oversight of federal agencies.
Scott and Warren have previously expressed concerns about Powell’s leadership.
The Florida Republican recently penned a Fox News op-ed blaming Powell for fluctuating interest rates and poor job markets.
“Working together with former President Biden, Chair Powell has led a Federal Reserve that has failed to act independently in the best interests of the American people, and instead chosen policies to appease Washington elites, Wall Street and left-leaning international organizations,” the Florida Republican wrote, suggesting a complete overhaul of the Fed’s board.
In December, Warren questioned Powell alongside Rep. Maxine Waters (D-Calif.) over concerns about the possibility the Fed could upend stress testing framework under a December proposal.
Powell was originally appointed by Trump in his first term and re-appointed by former President Biden. Trump said he would allow Powell to finish out his term despite his vocal criticism of the Fed chair.
