(Bloomberg) -- Federal Reserve officials quietly tightened internal restrictions on employees’ political activities after several reserve banks ran afoul of Congress over real or perceived engagement on issues within the domain of elected officials.

The code of conduct, as updated in late 2022, now explicitly prohibits the kind of activity engaged in by Minneapolis Fed President Neel Kashkari, who teamed up in 2020 with retired Minnesota Supreme Court Justice Alan Page to propose an amendment to the state constitution that said quality public school education was a “fundamental right.” The amendment failed to advance through the state legislature.

“An employee may not use or create the appearance of using their position or bank resources to influence a partisan or non-partisan election or ballot initiative, such as a referendum or constitutional amendment,” according to the new language in the Federal Reserve Administrative Manual. Regional banks, including Minneapolis, are adopting the language in their own codes.

The proposed Minnesota amendment followed research by the Minneapolis Fed that documented educational disparities. While the topic wouldn’t be unusual for a reserve bank that is studying human capital and workforce conditions in its district, it’s rare for a top official like Kashkari to personally lobby for a change to a state constitution.

Fed policymakers typically take pains to avoid expressing opinions on plans before lawmakers and other elected officials. Fed Chair Jerome Powell and his colleagues regularly speak of the need to maintain the central bank’s independence from politics and stress that their decisions and deliberations are nonpartisan.

“Independence is not a given; it could easily be rolled back, and it wasn’t that long ago that the Fed wasn’t independent,” said Michael Strain, director of economic policy studies at the American Enterprise Institute in Washington. “The conduct of Fed officials should be evaluated, and certainly restrictions on their conduct should be put in place.”

Yet seven of the 12 reserve banks have run into trouble with Congress or internally at the Fed over the past few years over issues such as personal trading, climate research and who accesses the Fed’s payments system.

Kashkari’s advocacy drew sharp criticism from former US Senator Patrick Toomey. The Pennsylvania Republican, who retired rather than run for reelection in 2022, called the initiative “political lobbying” that was “well beyond” the Fed’s mandate, according to an April 2022 letter to Kashkari.

Despite the new Fed language, Kashkari’s proposal remains on the Minneapolis Fed’s website. Alyssa Augustine, a spokesperson for the bank, said its presence reflects a “commitment to transparency” about the president’s activities.

A Federal Reserve Board spokesperson declined to comment beyond the updated code. 

(Updates with comment from economist in sixth paragraph.)

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