Matthew Winkler thinks that what we don’t know can kill us.
That was the message Bloomberg News editor-in-chief gave to students Wednesday, when he discussed the Freedom of Information Act and its relevance to a lawsuit being pursued by Bloomberg L.P.
In 2007, Bloomberg faced a challenge when trying to reveal the government’s investments in unsafe subprime mortgage-backed securities.
Mark Pittman, the Bloomberg reporter covering the unraveling of the debt market, found that following the market crash, the Federal Reserve entered the toxic debt market.
“Over the next two years the Federal Reserve became steeped in debt instruments that were opaque,” Winkler said.
But when Bloomberg requested records of where the money was invested, the reserve refused, stating that revealing the information might trigger an economic panic.
During that time, the Federal Reserve arranged billions in bailouts of Wall Street banks using taxpayer money.
Winkler said Bloomberg then sued the Federal Reserve in the name of transparency under the Freedom of Information Act, which states that government documents are public record.
The first court ruled in favor of Bloomberg, stating that the Federal Reserve has no evidence to prove that such disclosure would trigger a panic, and should therefore release the records.
