Fed Employee Accused of Mishandling Sensitive Files Before Retirement
A Federal Reserve Board staffer mishandled sensitive classified files and triggered hundreds of data loss prevention alerts in the months leading up to their retirement, according to a new report from the agency's inspector general.
The security issues with the employee were uncovered by the watchdog during its audit of the Fed's offboarding process, which began in March 2025. The employee was working in the Division of International Finance and had announced plans to retire in July 2024.
The auditors found that the employee copied hundreds of Federal Open Market Committee files to an unencrypted USB device in 2021, claiming they thought the device was encrypted. In 2023, the staffer tried to send classified FOMC information to their personal email account, but the Fed's IT unit blocked the attempt.
The inspector general determined that the Fed fell short on multiple fronts in dealing with this employee, calling out the board for insufficiently reviewing the incidents and not properly escalating them. The watchdog also found that the central bank's information security program and enforcement controls are unclear, and its response protocols for incidents involving the removal of information are inadequate.