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Fed audit bill backed by 222

Posted by Richard on June 14, 2009

H.R. 1207, the Federal Reserve Transparency Act of 2009, has attracted 222 co-sponsors, a majority of the House. The bill, introduced by Rep. Ron Paul, requires the Comptroller General to audit the Federal Reserve Board of Governors and Reserve Bank operations. The co-sponsors include 59 Democrats.

A majority of Financial Services Committee members, including 7 Democrats, have signed onto the bill. Committee chair Barney Frank has so far blocked it. Bill Wilson, President of Americans for Limited Government, asked Rep. Paul to circulate a discharge petition if the bill hasn't been voted out of committee by the end of the month:

Wilson says the legislation is necessary “to account for more than $7.76 trillion committed by the Fed in just the past two years. The American people have a right to know why the nation’s central bank is moving trillions of dollars to foreign governments and banks, killing markets, and crashing the economy.”

“If the will of the majority of the Financial Services Committee, and now a majority of the members of the House is to be heard, HR 1207 must be sent to the floor,” Wilson said.

According to Bloomberg News, the Federal Reserve has committed over $7.76 trillion in the past 20 months, $1,67 trillion of which has already been disbursed. However, it is unclear who received these loans, or who will receive the remainder of the committed funds.

Wilson added, “Nobody can account for where nearly $2 trillion of loans made by the Fed is going—all because the Fed has consistently stonewalled the press, Congress, and anyone else. And because law exempts most of the institution from being audited by the GAO.”

According to Bloomberg, “The Federal Reserve so far is refusing to disclose loan recipients or reveal the collateral they are taking in return.” The Fed has argued it is actually allowed to withhold “internal” memos as well as commercial and trade secrets information. Bloomberg, on the other hand, has actively filed a Freedom of Information Act (FOIA) request, demanding the information.

Thus far, the Fed’s Board of Governors has refused to comply with Bloomberg’s FOIA requests. In addition, the Fed’s regional Reserve Banks are arguing that they are private institutions beyond the reach of the Freedom of Information Act.

Yeah, they're public when it suits them and private when it suits them. That seems to be an increasingly popular modus operandi, unfortunately. There are good reasons why Fed operations shouldn't all be made public immediately, but releasing the information well after the fact would seem to address those (the audit would be due by the end of 2010). If there is zero accountability for these massive sums, the potential for waste, fraud, and abuse is huge. 

The $7.76 trillion amounts to over $25,000 for every man, woman, and child in America. But it's the children (and grandchildren… and great-grandchildren…) who are really on the hook for it. 

You can see the list of co-sponsors (plus the text and other information about the bill) at Thomas.gov. Only 16 Republicans haven't signed on, and Colorado's Mike Coffman (6th CD) is one of them. If you're a constituent of Coffman's (or one of the other non-supporters), how about asking his office what's up with that?   

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