The Washington PostDemocracy Dies in Darkness

Top Federal Reserve official donates to Hillary Clinton’s campaign

Federal Reserve governor Lael Brainard has contributed $2,700 to the presidential campaign of Democratic front-runner Hillary Clinton, according to federal records, an unusual donation from a top official at an institution that prides itself on political independence.

Brainard joined the nation’s central bank as a member of its Washington-based board of governors in June 2014 after serving as a senior official at the Treasury Department. Since then, she has made three donations directly to the Clinton campaign and one contribution to a joint fundraiser supporting her bid.

The most recent -- and largest -- donation was Feb. 1 for $1,950. Brainard has now reached the maximum limit for personal contributions.

Federal Reserve board members are presidential appointees, but the central bank has fiercely defended its decisions as free from political influence. Republicans have criticized the Fed for keeping interest rates too low for too long and have supported several bills that attempt to rein in the central bank’s power. Meanwhile, Democrats are urging the Fed not to raise interest rates too quickly to support faster growth. Both parties have questioned the Fed’s relationship with the big banks that it is charged with regulating.

Under federal law, Fed governors -- along with any employees of the executive branch -- are barred from engaging in partisan activities, but they are allowed to vote and make campaign donations. In practice, central bank officials rarely make contributions while in office. Federal records do not show any other members of the Fed’s policy-setting committee having made a political donation so far this election cycle.

“Gov. Brainard's donations are clearly legal,” said Sarah Binder, a senior fellow at the Brookings Institution who has analyzed the Fed’s relationship with Congress. “It's a problem of perceptions: the contributions fuel GOP charges that the Fed board is too close to the Democratic White House. It's just that much harder for the Fed to duck out of the political winds during an election year when a governor contributes to a presidential candidate.”   

A spokesman for the central bank declined to comment for this story. The contributions were first reported by Bloomberg.

Several prominent Republicans, including House Financial Services Chairman Jeb Hensarling of Texas, have criticized Brainard’s donations. At a news conference last month, Fed Chair Janet Yellen said the central bank remains politically neutral.

“I have never seen political views in any way influence the policy judgments that are made inside the Federal Reserve,” she said. “I want to say that emphatically.”

Correction: An earlier version of this post misspelled the name of Rep. Jeb Hensarling.