Addressing a pair of simmering controversies, the Supreme Court Monday announced it would not clear room on its docket for a Republican-backed challenge of federal campaign finance restrictions, while allowing the release of Federal Reserve Board documents identifying financial companies that received Fed loans to survive the financial crisis.
In what campaign finance activists said was the most significant case in the field since last year’s Citizens United decision, the high court refused to hear an appeal by former Louisiana Rep. Anh “Joseph” Cao and the Republican National Committee.
Mr. Cao wanted the Supreme Court to declare unconstitutional the $42,000 federal limit on what state and national parties could spend in 2010 in coordinated efforts on behalf of a candidate in his race. Currently, the state and national parties cannot consult with each other on money spent beyond that limit.
State party leaders have said the restrictions can lead to duplicative or contradictory messages.
News Corp.’s Fox News Network LLC and Bloomberg L.P. had sued separately for details about loans that commercial banks and Wall Street firms received and the collateral they put up. The 2nd U.S. Circuit Court of Appeals in New York City had said that such information isn’t automatically exempt from requests under the Freedom of Information Act.
But the Fed argued that if it identified banks that drew emergency loans, it could cause a run on those institutions, undermine the loan programs and potentially hurt the economy. The Fed acts as lender of last resort for banks that can’t get money from private sources.
The Fed said in a statement that it would “fully comply” with the court’s decision and was preparing to make the information available. The Fed noted that some of the information relating to emergency lending was already released Dec. 1 under the Dodd-Frank financial reform law.
The Obama administration had asked the high court not to hear the appeal. But the Clearing House Association, which represents some of the nation’s largest banks, wanted the high court to review the decision. The Clearing House Association said it was “disappointed” that its petitions were rejected.
In the Bloomberg case, the court rejected the Fed’s argument that identifying the banks and providing other information would harm them and discourage other distressed banks from seeking the Fed’s help. The court said the disclosure requirements under FOIA are set by Congress, not the court.
“The Federal Reserve forgot that it is the central bank for the people of the United States and not a private academy where decisions of great importance may be withheld from public scrutiny,” said Bloomberg News Editor in Chief Matthew Winkler.
Congress last year passed legislation requiring the release of some of the information being fought over in this lawsuit.
Justice Elena Kagan did not take part in this decision because she worked on this case while serving as solicitor general.
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