Audit the Federal Reserve

According to the Center for Media and Democracy's recent accounting of the bailout, $4.6 trillion was disbursed propping up the financial system and $2 trillion of that is still outstanding mostly in the form of loans from the Federal Reserve. (See Total Wall Street Bailout Cost table). The public still does not know all the institutions these funds went to and the collateral that was given as the basis for these loans. This is why taxpayers deserve a full, and public audit of the secretive Federal Reserve. Even after a federal court ruled that it needed to make public key information on their emergency lending programs, the Fed has failed to comply and is fighting to keep its books in the dark.

HOUSE BILL PROVIDES FOR A FULL AND COMPLETE AUDIT

A bill sponsored by Texas Congressman Ron Paul to audit the Fed quickly garnered 313 cosponsors over the course of last year. The bipartisan team of Paul and Florida Congressman Alan Grayson pushed hard for an amendment to audit the Fed to be attached to the House financial reform bill. In a victory for the public, they succeeded in doing so over the strong objections of the Federal Reserve. Their amendment compels a full audit by the GAO, with everything released to the public after six months (except private conversations among Federal Open Market Committee members).

SENATE FINANCIAL REFORM BILL KEEPS KEY INFORMATION SECRET

The Senate financial reform bill does provide for audit of the Federal Reserve, but the audit provisions PROHIBIT the GAO from making public key pieces of information for extended periods of time. From the bill:

The Comptroller General shall not disclose to any person or entity, including to Congress, the names or identifying details of specific participants in any credit facility, the amounts borrowed by specific participants in any credit facility, or identifying details regarding assets or collateral held by, under, or in connection with any credit facility, and any report provided under subparagraph (A) shall be redacted to ensure that such names and details are not disclosed.

This is exactly the type of information that the public needs to assess where the trillions in Federal Reserve funds have gone and what collateral has been given for these loans. The bill would turn this information over to Congressional committees but not the public. The Fed's refusal to give this information to Bloomberg News and other news outlets has resulted in two federal court decisions against the Fed and supportive of the public's right to know, court decisions that would be undermined if this law were passed by Congress. (The Fed is still deciding whether or not to appeal this case.)

SENATOR SANDERS TAKES UP THE FIGHT IN THE SENATE

Independent Vermont Senator, Bernie Sanders, will offer an amendment containing the Paul-Grayson audit language, plus he will codify a recent 2nd Circuit Court decision requiring the Federal Reserve to turn over information about the original bailout recipients requested in the Bloomberg News Freedom of Information Act lawsuit against the Federal Reserve.

Sanders has a bipartisan team of cosponsors including: Feingold-DeMint-Leahy-McCain-Wyden-Grassley-Dorgan-Vitter-Boxer-Brownback-Risch-Wicker-Graham-Crapo-Hatch-Bunning and Robert Bennett.

LEARN MORE

• About the Paul-Grayson Amendment by clicking here.
• About the Bloomberg lawsuit by clicking here.