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Fed audit review beginning in Congress
'This is history in the making and victory is within reach'
Posted: September 25, 2009
12:50 am Eastern

Members of Congress will holding a hearing tomorrow on a plan by U.S. Rep. Ron Paul, R-Texas, to audit the Federal Reserve, which oversees U.S. monetary policy, and his supporters are calling it a precedent-setting event.

"This is history in the making and victory is within reach," said a statement on the RonPaul.com website, which is maintained in support of the congressman but is not linked to him.

WND reported just days ago that the congressman, who has sponsored similar legislation on and off since the 1980s, believes this is the year there actually will be progress on his efforts to open up the books of the private organization that sets interest rates, controls the U.S. money supply and impacts consumers in a hundred ways.

The Federal Reserve, an independent organization apart from the U.S. government, largely has operated behind a veil of secrecy for decades, but Paul told WND its operations could be about to face the light of day.

The hearing today is before the House Financial Services committee, and the plan should be ready for quick approval. It has co-sponsorship from nearly 300 members of the 435-member House – including all of the Republicans and a significant number of Democrats.

Democratic Rep. Barney Frank scheduled hearings on the proposal to start tomorrow. Paul said Frank has confirmed his support of an audit plan.

According to a schedule posted on the website of the committee, "Oversight and Audit Issues at the Federal Reserve" will be discussed.

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The Paul support site wrote, "Imagine what will happen if H.R. 1207, the Federal Research Transparency Act, comes up for a vote in Congress! With two-thirds of the House of Representatives already co-sponsoring this bill, it has real potential to pass – but only if we educate and rally the people to support it and get our [members of Congress] to put it to vote and pass it."

Paul long has been a critic of the secrecy of the Federal Reserve.

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"Throughout its nearly 100-year history, the Federal Reserve has presided over the near-complete destruction of the United States dollar," he said earlier. "Since 1913, the dollar has lost over 95 percent of its purchasing power, aided and abetted by the Federal Reserve's loose monetary policy."

He said the recent economic circumstances are helping generate support, and there are a multitude of questions that eventually could be answered.

For example, who made the decision to help Goldman Sachs and let Lehman Brothers fail? Was there a personal agenda? Who decided how much money to give General Motors? What about the money deals the Federal Reserve cuts with other nations? Who are the beneficiaries?

When the plan was introduced, Paul said, "How long will we as a Congress stand idly by while hard-working Americans see their savings eaten away by inflation? Only big-spending politicians and politically favored bankers benefit from inflation.

"Since its inception, the Federal Reserve has always operated in the shadows, without sufficient scrutiny or oversight of its operations. While the conventional excuse is that this is intended to reduce the Fed's susceptibility to political pressures, the reality is that the Fed acts as a foil for the government. Whenever you question the Fed about the strength of the dollar, they will refer you to the Treasury, and vice versa. The Federal Reserve has, on the one hand, many of the privileges of government agencies, while retaining benefits of private organizations, such as being insulated from Freedom of Information Act requests."

Paul has warned, "The Federal Reserve can enter into agreements with foreign central banks and foreign governments, and the GAO is prohibited from auditing or even seeing these agreements. Why should a government-established agency, whose police force has federal law enforcement powers, and whose notes have legal tender status in this country, be allowed to enter into agreements with foreign powers and foreign banking institutions with no oversight? Particularly when hundreds of billions of dollars of currency swaps have been announced and implemented, the Fed's negotiations with the European Central Bank, the Bank of International Settlements, and other institutions should face increased scrutiny, most especially because of their significant effect on foreign policy. If the State Department were able to do this, it would be characterized as a rogue agency and brought to heel, and if a private individual did this he might face prosecution under the Logan Act, yet the Fed avoids both fates."

Paul, who told WND the Fed has "more money than Congress," said, "There's going to be a lot of yelling and screaming before this is over."

Federal Reserve officials, meanwhile, are "fighting tooth and nail" against releasing any information sought under several lawsuits already in the court systems, he said.

WND recently reported that the Fed, despite being ordered to disclose to whom it awarded some $2 trillion in discount "stimulus" loans, continues its fight for secrecy.