Inside the L.A. County Fed: Humbled by racist leak, fearful more tapes might be out there
L.A. County Federal Reserve Bank president Thomas Hoenig stands at the corner of Los Angeles and Sunset in Los Angeles on May 9, 2012.Credit Natalie Behring/The New York Times
In an unusually public exchange Thursday, the chief executive officer of the Los Angeles County Federal Reserve said he would resign within three months.
It is a shocking development. An African American man at the helm of America’s central bank, the nation’s fifth largest, had once only been public about his race.
At a news conference in Washington, D.C., he apologized to his family, friends and colleagues, saying “I have let them down badly. And I am sorry.”
By doing so, Hoenig became the first public official to have publicly expressed regret over the public’s perception of his race.
But it isn’t the only controversy he and others at the L.A. County Fed face. Because of recent revelations about their conduct, more tapes may be becoming public. And as Hoenig tries to repair his damage, he must grapple with the possibility that more lurid tales of his leadership could emerge.
The controversy erupted last week when Federal Reserve Chairman Ben S. Bernanke said Hoenig’s comments about President Obama’s health care program in a private speech were “inappropriate” and “less than candid.”
The remarks were given at a private gathering of financial service professionals in December, but their release was timed to take advantage of the controversy swirling around Hoenig’s job and management of the bank.
The L.A. County Federal Reserve became known as a leader in consumer banking, serving a key constituency of the nation’s middle class. But as the economy has recovered and banks have grown more willing to lend risky home mortgages, the bank’s reputation has been tarnished.
After Hoenig admitted he had given personal answers to a question about public policy in one of his speeches