Federal Election Commission records indicate that Federal Reserve Governor Lael Brainard has contributed a total of $750 to Hillary Clinton’s presidential campaign over three different donations, which took place between November of 2015 and January of 2016.
It is currently legal for Fed governors, who are appointed by the president and help steer the private central bank’s monetary policy decisions, to donate to political campaigns and causes. However, it is uncommon for them to do so, and Brainard’s donations have sparked questions as to whether her advocacy for Clinton undermines the Federal Reserve’s claim that it is politically independent.
Brookings Institution senior fellow Sarah Binder, who said that the contributions “could provide fuel for Republican narratives about the proximity of the Fed and the board to the Obama administration,” told Bloomberg Politics, “If there is an issue here, it is one of optics. It is a question of where governors want to draw their own lines and how they want to be perceived.”
Brainard was appointed to her position as Fed governor by President Barack Obama and took office in 2014. Her husband, Kurt Campbell, once served under then Secretary of State Clinton as assistant secretary for east Asian and Pacific affairs.
Federal Reserve Chair Janet Yellen has vociferously opposed political efforts to launch a full audit of the Federal Reserve, claiming that doing so would weaken the bank’s independence from political whims. “Central bank independence in conducting monetary policy is considered a best practice for central banks around the world. Academic studies, I think, establish beyond the shadow of a doubt that independent central banks perform better,” she said last year according to The Hill.
The Daily Caller characterized the donation as “an unusual practice for an organization that strives to maintain political independence,” and Zero Hedge called it “proof that Fed members have a clear ideological bias.”
While it is uncommon for a Fed governor to donate openly to political campaigns, so much so that Brainard is the only one to have done so thus far this presidential election cycle, it has happened before in the past according to Bloomberg Politics. Former Federal Reserve governor and vice-chair Alice Rivlin, an appointee of former President Bill Clinton, donated $500 to the Democratic National Committee in 1998 at a time when she was actively serving as vice chair of the Federal Reserve Board of Governors.
The Hill notes that in November of 2015 U.S. Senator Rand Paul (R-Ky.) raised questions about the Fed’s level of political independence and called for an investigation into whether Federal Reserve funds are being used in “improper or illegal lobbying” of Congress.
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