The White House continues to support Ms. Raskin. Michael Gwin, an administration spokesman, said she had “earned widespread support in the face of an unprecedented, baseless campaign that seeks to tarnish her distinguished career in public service and her commitment to upholding the highest ethical standards any administration has ever put forward.”
But the controversy surrounding her nomination could prove uncomfortable for Democrats, who are trying to prevent regulators from so frequently leaving the government to advise the sort of companies they once policed.
“The Republicans do this all the time because they are seen as the party of business,” said Meredith McGehee, a longtime Washington ethics expert. “The vulnerability is that here you have a Democrat who’s in this position that’s in conflict with the rhetoric of the Democratic Party.”
The issue centers on a wonky but increasingly important corner of finance.
Ms. Raskin started on the board of Reserve Trust, a Colorado-based trust company that now calls itself a financial technology firm, shortly after leaving a top role at the Treasury Department in 2017. From 2010 to 2014, she served as a Fed governor.
When she joined the board, the Kansas City Fed had recently rejected the firm’s first application for a so-called master account with the central bank. Such accounts allow firms to tap the Fed’s payment infrastructure, enabling them to carry out services for clients without relying on an external partner. They are hot commodities, and nonbank financial firms often strive but struggle to qualify for them.
To qualify for the account, the firm changed its business model and reapplied in 2017.
Dennis Gingold, a founder of Reserve Trust who was a longtime acquaintance of Ms. Raskin’s and who has donated to the political campaigns of her husband, Representative Jamie Raskin of Maryland, said in an interview that he had helped to bring Ms. Raskin to the company.
Mr. Gingold said Ms. Raskin had called the Fed about the master account at his behest, because he was worried that the central bank was not giving the reapplication a fair consideration. From his Washington office, she phoned Esther George, the Kansas City Fed president. The call lasted two minutes and was “insignificant,” Mr. Gingold said, noting that Ms. Raskin simply “asked that the decision be made on the facts.”
Article source: https://www.nytimes.com/2022/03/02/business/economy/sarah-bloom-raskin-biden-fed.html
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