The makeup of the Federal Reserve’s board of directors poses a major conflict of interest and there is concern that several financial firms and corporations could have reaped monetary benefits from their executives’ close ties to the Fed, according to a new report released today by the Government Accountability Office.

In one case, the Federal Reserve consulted with General Electric on the creation of a commercial paper funding facility and then provided $16 billion in financing to the company while its chief executive, Jeffrey Immelt, served as a director on the board of the Federal Reserve Bank of New York. Immelt is now President Obama’s “jobs czar.”

JP Morgan Chase could also have benefited from its chief executive Jamie Dimon’s position on the board of the Federal Reserve Bank of New York, according to the GAO. The bank received emergency loans from the Federal Reserve at the same time it served as the clearinghouse for the Fed’s emergency lending program.

The Federal Reserve gave JP Morgan Chase an 18-month exemption from risk-based leverage and capital requirements in 2008, the same year that the Fed gave it $29 billion to acquire Bear Stearns, according to the GAO.

Similarly, Lehman Brothers’ chief executive Richard Fuld served on the board of the Federal Reserve Bank of New York at the same time one of its subsidiaries participated in the Fed’s emergency programs.

The Federal Reserve system has come under increased scrutiny in recent years, particularly for the structure of its board of directors. Executives of banks and companies that are regulated by the Fed, and that receive emergency funding from it, often serve on the board.

“Without more complete documentation of the directors’ roles and responsibilities with regard to the supervision and regulation functions, as well as increased public disclosure on governance practices to enhance accountability and transparency, questions about Reserve Bank governance will remain,” the report states, adding that such affiliations “could create reputational risk for the Reserve Banks.”

The GAO did state that it “did not find evidence that Reserve Bank boards of directors participated directly in making any decisions about authorizing, setting the terms of, or approving a borrower’s participation in the emergency programs.”

The report also questions the independence of the Fed’s own executives, some of whom have sought waivers for owning stock in companies that are regulated by the agency. The Fed is not required to disclose those waivers. In September 2008, Goldman Sachs received permission from the Fed to become a bank holding company and get access to loans from the Fed while Stephen Friedman, then chairman of the New York Federal Reserve’s board of directors, owned shares in Goldman Sachs and sat on its board of directors. The Fed gave Friedman a waiver from its conflict of interest rules but did not consult with the board nor did it publicly disclose the affiliation.

One bank official told the GAO that the Fed gave the waiver because it would be difficult to find a chairman during a financial crisis and the bank already had one vacancy on its board. There was also concern that then-president Tim Geithner’s possible nomination as treasury secretary would leave a major gap in the bank’s leadership.

But the Federal Reserve was unaware that Friedman continued to purchase additional shares in Goldman Sachs, leading to his resignation in May 2009.

In a similar case, one director of the Federal Reserve Bank of Minneapolis was found to have shares in Merrill Lynch, which had been acquired by Bank of America, a bank that is regulated by the Federal Reserve.

Even the current makeup of the Federal Reserve Bank of New York’s board of directors is especially corporate-heavy. It includes executives such as James Tisch, chief executive of Lowe’s, and Terry Lundgren, chairman of Macy’s.

“While these relationships may not give rise to actual conflicts of interest, they can create the appearance of a conflict as illustrated by the participation of director-affiliated institutions in the Federal Reserve System’s emergency programs,” the report states. “Most Reserve Banks’ bylaws do not document the role of the board in supervision and regulation. To increase transparency, GAO recommends that all Reserve Banks clearly document the directors’ role in supervision and regulation activities in their bylaws.”

The lack of diversity is also an issue, the GAO found. In 2010, only 15 of its 108 board of directors were minorities while a majority were white, senior executives of financial companies. At the same time, labor and union groups were disproportionately represented. In 2010, 56 of the 91 directors that responded to GAO’s survey had financial markets experience.

The report comes as the Occupy Wall Street movement rallying against Wall Street and corporate greed is gaining momentum. Some politicians, such 2012 Republican presidential candidate Rep. Ron Paul, R-Texas, are also raising calls to end the Federal Reserve or scale back its role.