Senators Rick Scott (R-Fla.) and Elizabeth Warren (D-Mass.) have sent a forceful letter to Federal Reserve Chair Jerome Powell, demanding accountability for Fed officials involved in unethical trading and rule violations.
The letter, dated February 17, 2025, follows a September 2024 report by the Federal Reserve Inspector General (Fed IG), which uncovered numerous improper trades by Dr. Raphael Bostic, President of the Federal Reserve Bank of Atlanta.
Despite these findings, Dr. Bostic has not faced public consequences, raising concerns about systemic ethical issues within the Fed. In their letter, the senators criticized Powell’s handling of the situation, accusing him of fostering a “culture of corruption.”
“You allowed this culture of corruption to flourish, and were far too slow to put rules in place to address it,” the senators wrote. “When you did establish these rules, they were inadequate. And now it appears that you are refusing to enforce them.”
The Fed IG’s report on Dr. Bostic is the latest in a string of ethics scandals that have plagued the Federal Reserve. High-ranking officials, including Powell himself, have been implicated in trades that violated ethics rules, further eroding public trust.
The senators emphasized that repeated violations have harmed the credibility of the Federal Reserve, an institution vital to economic stability. “These failures represent a stain on your record as Fed Chair, and have damaged the integrity and effectiveness of the Federal Reserve,” they stated.
Scott and Warren called on Powell to implement stronger ethics policies and take immediate action to hold officials accountable. They warned that a lack of consequences for Dr. Bostic and others sends a dangerous message that ethical breaches will be tolerated at the highest levels of the institution.
The letter also included several questions for Powell, seeking clarification on how he plans to address these ethical concerns and restore public confidence in the Federal Reserve. The senators reiterated the need for transparency and accountability, stressing that the institution must uphold the highest ethical standards to maintain its credibility.
