The Secret Fed Tapes of Carmen Segarra

The Federal Reserve Bank of New York is one of the world’s most powerful financial regulators, charged by Congress and the Federal Reserve Board with keeping Wall Street’s gargantuan banks from crashing the economy. But the public has little ability to witness how the nation’s top bank supervisor performs this vital work. By law and custom, what goes on inside the New York Fed is a closely guarded secret.

Last year that changed when I took readers inside this cloistered institution and revealed something that only a select few have experienced. I obtained a remarkable set of secret recordings of examiners and their bosses on the job, recordings that financial writer Michael Lewis dubbed “the Ray Rice video for the financial sector.

The story was called “Inside the New York Fed: Secret Recordings and a Culture Clash.

The recordings came from a former bank examiner, Carmen Segarra, who was fired after she refused to water down a critical finding about Goldman Sachs.

Read “So Who is Carmen Segarra? A Fed Whistleblower Q&A” by Jake Bernstein.

Here are links for the full series: “Fed Tapes – The Secret Recordings of Carmen Segarra

Her recordings were also prominently featured in a collaboration I did with the radio aces at This American Life for a program called “The Secret Recordings of Carmen Segarra.”

Building off the recordings, extensive interviews and a trove of confidential documents, I followed the first Segarra story with two others about the New York Fed. “Secret Tapes Hint at Turmoil in New York Fed Team Monitoring JPMorgan” detailed how the Fed’s dysfunctional culture compromised its ability to respond to the costly “London Whale” trades and led to a revolt by on-site examiners. “High-Level Fed Committee Overruled Carmen Segarra’s Finding on Goldman,” dove more deeply into how a secretive group of top Fed executives had reversed Segarra’s finding that Goldman lacked a firm-wide policy to manage conflicts of interest, despite ample evidence to the contrary.

Vicksburg: The Civil War’s Ugly Stepchild

The site where Grant and Pemberton first discussed Vicksburg's surrender.

The site where Grant and Pemberton first discussed Vicksburg’s surrender.

This July 4th coincides with the 150th anniversary of two Union victories in the Civil War. After three days of bloody fighting in Gettysburg, Robert E. Lee’s Army of Northern Virginia retreated south, leaving behind the high-water mark of the Confederacy. While in sultry Mississippi, Confederate General John C. Pemberton bowed to the inevitable and surrendered the river fortress of Vicksburg after a 47-day siege.

About 200,000 visitors are expected to come to Gettysburg to commemorate its anniversary. If you’re one of them, the New York Times has a travel piece about what to do while you’re there. The national park’s website is bursting with events. Planned festivities in Pennsylvania include musicals, a Lincoln look-alike contest, and author signings for yet another battle-chronicling tome. The reenactors sweltering in their woolen costumes are expected to number in the tens of thousands.

Vicksburg too will have commemorations but nothing on the scale of what is occurring in Gettysburg. Nor has anything like the amount of ink spilled on Gettysburg been lavished on Vicksburg. Yet the campaign in Mississippi was without doubt the more important and audacious conquest. Vicksburg’s status as ugly stepchild to Gettysburg is a cruel trick of history and geography. It says as much about how we as a nation have processed the Civil War and its protagonists as it does about the respective campaigns themselves.

Both Jefferson Davis and Abraham Lincoln understood the vital importance of Vicksburg and urged on their respective generals accordingly.

“Let us get Vicksburg and the country is ours,” said Lincoln in 1862. “The war can never be brought to a close until that key is in our pocket.”

Davis had spent some of his childhood at Brierfield Plantation, 20 miles south of Vicksburg. He served as the state’s U.S. Senator. Davis knew the survival of his fledgling nation rested on control of the Mississippi. The capture of Vicksburg would split the Confederacy in two and remove the South’s major artery for trade and communication. He ordered Pemberton to hold the city at all costs.

Ulysses S. Grant’s campaign to take Vicksburg was a military marvel, equal parts luck and pluck. Grant overrode the concerns of his generals and largely abandoned his supply lines, opting instead to feed his army off the surrounding countryside. In less than 20 days, Grant and his army marched more than 200 miles, defeated two separate armies and sacked Jackson, the capitol of the state. He defeated the Rebels at Port Gibson, Raymond, Jackson, Champion Hill and the Big Black River. When Grant arrived at Vicksburg in late May he launched a disastrous assault against the Confederate works, the folly of which was compounded by repeating it. After failing at a frontal assault, Grant’s army settled down to a siege.

A siege is inherently less dramatic than two sides bravely fighting it out across open terrain. The slow work of moving trenches ever closer, the steady bombardment and the daily privations of a besieged army are no match for Pickett’s Charge in the popular imagination. Still, the results cannot be disputed. Grant captured approximately 35,000 men, 172 cannon and 60,000 small arms, representing one of the largest surrenders of men and material in American history.

“The Father of Waters again goes unvexed to the sea,” wrote Lincoln after hearing Vicksburg had fallen.

History was cruel to both victor and vanquished at Vicksburg. Pemberton had the misfortune of not only surrendering the second most important city of the Confederacy but also of being a Northerner. He was a West Point graduate from Pennsylvania who at the urging of his Virginian wife joined the Confederacy. He became an easy scapegoat for Southerners. Pemberton was a poor leader but General Joseph Johnston’s refusal to support him and the disappearance of Brigadier General William Loring at the Battle of the Big Black exacerbated his failings. Neither of those men received the scorn heaped on Pemberton.

Oddly enough, on the reputation front, Grant in victory seems to have suffered more than Lee in defeat. Despite losing Gettysburg and the war, Lee became a martyr for the Lost Cause movement, a position he didn’t discourage. To this day, for many Lee is a byword for gallantry and military acumen.

Grant, of course, went on to command the entire Union army and win the war. He rode his popularity to the White House for two terms but his presidency was marred by corruption scandals. Grant himself was not corrupt although he had a tendency to place his trust with the wrong people, particularly family members. The political scandals along with old accusations that Grant was a drunkard and cavalier with the lives of his men gave historians plenty of fodder. Grant’s reputation diminished accordingly as did his extraordinary accomplishment at Vicksburg. Only beginning in 1960 did a reassessment of Grant’s legacy truly begin. In the past fifty years, even his White House years have received a more positive spin but it has been a long climb back.

Gettysburg was more of a bloody stalemate, with almost equal dead and wounded on both sides, than a resounding defeat for Lee. Both North and South celebrated their respective commanders at Gettysburg. It didn’t hurt that almost from the start, the town of Gettysburg embraced its history. Vicksburg for obvious reasons was more ambivalent. Independence Day wasn’t official observed in Vicksburg until 1947, when General Dwight D. Eisenhower visited.

The Gettysburg battlefield became a national park in 1895. Four years later, Vicksburg followed. They are both beautiful parks. It’s hard to visit Gettysburg and not be awed and deeply moved. The Gettysburg Cyclorama puts you right in the middle of the action. The battlefield, lovingly maintained, stands much as it did 150 years ago. Inside the cavernous park headquarters is a bookstore that could rival a Barnes and Nobles in size.

The Vicksburg National Military Park is also lovely. The park headquarters makes the most of its modest three rooms. In the evening, the grounds are taken over by joggers and dog walkers. But for the civil war aficionado, the park pales in comparison to Gettysburg, particularly when it comes to verisimilitude. Photos from the Vicksburg siege reveal almost a moonscape. Few trees are standing. Instead the land was marked by mazes of trenches leading to bristling fortifications. In the intervening years, the Mississippi jungle has taken over huge swathes of the battle site. Until recently it was almost impossible to envision how men fought and died on the site. Only in the past few years has private money become available to remove some of the trees.

And then there’s The Speech. The fame of Gettysburg obviously got a boost when it became the site of one of the greatest speeches in American history. Lincoln gave his historic address on November 19, 1863 as part of the dedication of the Soldiers’ National Cemetery. In just over two minutes, Lincoln’s oratory — fueled and elevated by the sacrifice of the fallen — helped bind the nation together. Vicksburg represents the other extreme: the open sore that refuses to heal.

Outside of the park in Vicksburg is the Old Courthouse Museum. On its grounds a young planter named Jefferson Davis launched his political career. It was the tallest building in Vicksburg during the siege and remarkably survived the constant bombardment by Union forces with only one direct hit. Here it’s all about “the war between the states.” The museum is a shrine to Davis. One of the prominent displays encountered talks about how the Confederate President was loved by his slaves.