Fed Not So Tight When It Comes To Staff Director Of Support Services Earns More Than Cabinet Secretaries
The Federal Reserve, renowned for its tightfisted control of the nation’s money supply, is considerably more generous to its own staff: In just the last three years, it has more than doubled the number of executives who earn above $125,000 annually, a congressional study shows.
The Fed’s director of support services, for example, whose job is to oversee janitors and guards, earns more than the secretary of defense, for instance, according to a study by the House Banking Committee released Wednesday.
The Federal Reserve has 72 staff members who earn more than $125,000 - up from just 35 in 1993, investigators for the committee found.
“I want to know why the Federal Reserve is building a bigger kingdom while the rest of the government is on the rack,” Rep. Henry Gonzales, D-Texas, a longtime Fed critic, said in a letter to Federal Reserve Board Chairman Alan Greenspan.
A Federal Reserve spokesman declined comment on Gonzales’ letter and on the findings of the study. The letter arrived Wednesday and the agency has not had time to look into the issue, the spokesman said.
In comparison, however, salaries paid by private-sector banks are much higher than those of the Federal Reserve, which is a semiautonomous arm of the government. A survey of the banking industry in 1995 found that multimillion-dollar compensation packages are not unusual.
The Federal Reserve also has come under increasing criticism for its overall growth in costs.
A General Accounting Office report issued in June showed that the Fed’s costs had grown 48 percent between 1988 and 1994 - about double the rate of inflation. That was in contrast to the commercial-banking sector, which was downsizing its organizations, the GAO report noted.
The Banking Committee study, done by the committee’s Democratic staff, examined only the salaries of Federal Reserve staff and not the senior executives of Federal Reserve Banks or the Board of Governors.
Fed Chairman Alan Greenspan makes $133,600, while the members of the Board of Governors each make $123,100 - salaries that are set by law along with other federal agency chiefs. William Parry, chairman of the San Francisco Federal Reserve Bank, is the highest paid Federal Reserve banker, however, earning $253,000 annually - more than the $200,000 earned by President Clinton.
A spokeswoman for the San Francisco Federal Bank said Parry’s high salary is based in large part on the fact that he has headed the institution longer than any other Fed bank president.
The Banking Committee study shows that the top dozen Federal Reserve staff members in Washington earn a salary of $174,000, far more than Vice President Al Gore, House Speaker Newt Gingrich or the nine Supreme Court justices.
The individuals were not identified by name, but rather by job title. The jobs include staff director for management, director for research and statistics, director for monetary affairs and legal director.
A committee investigator said the official identified as being director of support services was actually head of custodial services, earning $163,800. By contrast, the secretary of Defense and other Cabinet secretaries earn $148,400.