Ron Paul Introduces Bill to Audit the Fed




February 26, 2009

Madame Speaker,

I rise to introduce the Federal Reserve Transparency Act. Throughout its nearly 100-year history, the Federal Reserve has presided over the near-complete destruction of the United States dollar. Since 1913 the dollar has lost over 95% of its purchasing power, aided and abetted by the Federal Reserve’s loose monetary policy. 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.

Serious discussion of proposals to oversee the Federal Reserve is long overdue. I have been a longtime proponent of more effective oversight and auditing of the Fed, but I was far from the first Congressman to advocate these types of proposals. Esteemed former members of the Banking Committee such as Chairmen Wright Patman and Henry B. Gonzales were outspoken critics of the Fed and its lack of transparency.

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.

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.

More importantly, the Fed’s funding facilities and its agreements with the Treasury should be reviewed. The Treasury’s supplementary financing accounts that fund Fed facilities allow the Treasury to funnel money to Wall Street without GAO or Congressional oversight. Additional funding facilities, such as the Primary Dealer Credit Facility and the Term Securities Lending Facility, allow the Fed to keep financial asset prices artificially inflated and subsidize poorly performing financial firms.

The Federal Reserve Transparency Act would eliminate restrictions on GAO audits of the Federal Reserve and open Fed operations to enhanced scrutiny. We hear officials constantly lauding the benefits of transparency and especially bemoaning the opacity of the Fed, its monetary policy, and its funding facilities. By opening all Fed operations to a GAO audit and calling for such an audit to be completed by the end of 2010, the Federal Reserve Transparency Act would achieve much-needed transparency of the Federal Reserve. I urge my colleagues to support this bill.

111th Congress – 1st Session

H.R. 1207

A BILL

To amend title 31, United States Code, to reform the manner in which the Board of Governors of the Federal Reserve System is audited by the Comptroller General of the United States and the manner in which such audits are reported, and for other purposes.

1. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.
This Act may be cited as the “Federal Reserve Transparency Act of 2009″.

SEC. 2. AUDIT REFORM AND TRANSPARENCY FOR THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM.

(a) IN GENERAL. – Subsection (b) of section 714 of title 31, United States Code, is amended by striking all after “shall audit an agency” and inserting a period.

(b) AUDIT. – Section 714 of title 31, United States Code, is amended by adding at the end the following new subsection:

“(e) AUDIT AND REPORT OF THE FEDERAL RESERVE SYSTEM. –

“(1) IN GENERAL. – The audit of the Board of Governors of the Federal Reserve System and the Federal reserve banks under subsection (b) shall be completed before the end of 2010.

“(2) REPORT –

“(A) REQUIRED. – A report on the audit referred to in paragraph (1) shall be submitted by the Comptroller General to the Congress before the end of the 90-day period beginning on the date on which such audit is completed and made available to the Speaker of the House, the majority and minority leaders of the House of Representatives, the majority and minority leaders of the Senate, the Chairman and Ranking Member of the committee and each sub-committee of jurisdiction in the House of Representatives and the Senate, and any other Member of Congress who requests it.

“(B) CONTENTS. – The report under subparagraph (A) shall include a detailed description of the findings and conclusion of the Comptroller General with respect to the audit that is the subject of the report, together with such recommendations for legislative or administrative action as the Comptroller General may determine to be appropriate.”.

Sponsor

Rep. Ronald Paul [R-TX]

Cosponsors

The number of co-sponsors keeps growing! Check out the latest list here.

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221 Comments:

  1. God Bless You Dr. Paul!

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  2. Thank you for working for us Congressman Paul!

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  3. Go Ron!
    Thank you for everything you do!
    Sincerely
    Debbie
    Orlando, FL

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  4. If this bill doesn't pass then I truly have lost all faith in congress to represent the peoples best interest anymore. We need more legislation like this. Dr. Paul is indeed one of the last few honest politicians left in washington.

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  5. Dr Paul
    keep up the good work and don't let us down

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  6. Pingback: H.R. 1207 - Audit the Federal Reserve! « kristopheR.derentZ

  7. Would something like Statistical Release H.4.1 not help? That would detail, from a high level, ‘Factors Affecting the Fed Balance Sheet’:

    http://www.federalreserve.gov/Releases/H41/20090115/default.htm

    If that is too many numbers, how about a more layman’s terms approach to the various components within H.4.1?

    http://www.federalreserve.gov/monetarypolicy/bst.htm

    No offense, but the government hasn’t exactly been doing a bang-up job in auditing itself, its agencies, or what *used to be* (and are now all of our) government sponsored entities up to this point. Please note this is not pointed at any party or congress, it’s just the way it is.

    Beyond that, im not sure if most of the ‘auditors’ know what the intention behind a reverse repurchase agreement is (or how to read a balance sheet), nonetheless audit the efficacy of a reverse repurchase agreement with another central bank to provide currency liquidity.

    Anyway, check out the website, you can always email them if you have questions. Feel free to educate yourself.

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  8. It is time the federal reserve is better understood by all taxpayers. It seems that this middle entity has all the benefits and for reasons that might become more clear later with an audit, the WH seems to pick present, past members to handle all our money concerns. Yes, in an era of transparency let's support this bill. Thank you Ron Paul

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  9. Pingback: Ron Paul: Audit the Federal Reserve! | Ron Paul .com

  10. How many trillions of dollars have we paid this private company over the years do do our governments job. It is my understanding that we could buy back the federal reserve for the paltry sum of $450,000,000 and completely eleminate this waste of tax payers dollars.

    At least Ron and a few select others are attempting to have this audit.

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  11. Look up your congressman and urge them to support this bill. Here is a template I created you can use so it is easy and a no-brainer. Feel free to modify it:

    Dear (Congressman)

    I urge you to cosponsor the bill proposed by representative Ron Paul of Texas, H.R. 1207. The actions of the Federal Reserve have significant effects upon this whole nation, which includes the citizens of our state, and sadly the Federal Reserve has power to in fact hurt the economy of this nation if it goes unchecked. There needs to be more oversight and regulation on what the Federal Reserve can and should do. Unfortunately as a primarily private entity the Federal Reserve is causing destruction, willful destruction, and it is unfair and wrong for us, you and me included, to have to suffer and pay the consequences of a private entity like this. If anything, the Federal Reserve should be more regulated, including being audited, and if that is not enough, the Federal Reserve should be dissolved and the power to control the U.S. currency be put into the hands of the government, not some private entity.

    For these reasons, and many more exist, which I urge you to discover, please support bill H.R. 1207. Thank you.

    Sincerely,
    (Your Name)

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    • "and the power to control the U.S. currency be put into the hands of the government"

      Do you believe the government can do a better job than a private entity that has a vested interest in our economic vitality? Do you truly believe that to be a feasible solution?

      What portion of government is as educated, structured in a democratic fashion, and behaves in an largely (noone is completely) apolitical fashion?

      If you haven't noticed all the other central banks are now following our lead and decreasing interest rates... Maybe they are all wrong?

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  12. It's amazing that so few people know about JFK's issue of United States Notes BACKED BY SILVER! After his assassination, these notes (the small percentage that went into circulation) were hastily called in. Silver backed currency would have pushed out of
    the market the Federal Reserve Notes backed by NOTHING of ANY value -- in other words, thin air. IS THAT MOTIVE or is that MOTIVE? The BIG Monied cartel is ruthless!

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  13. The bill requires one audit. Shouldn't the Fed be audited on a regular basis?

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  14. Ron Paul is 100% correct on this, and has my vote locked up should he run in 2012.

    For anyone looking for the history of the Fed, check out The Creature from Jekyll Island, which has its history from the initial conception documented. I can't recommend it highly enough for anyone remotely curious about how this bankers' cartel got to where it is today.

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  15. Is this true Paul?

    http://www.chron.com/disp/story.mpl/front/6286883.html

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    • I stumble upon that too, but a little skeptical. It'd would be hypocrisy, but the bill is passed, who wouldn't want a part of the pie? He'd denied it like Jindal? Plus, I'm sure the people of his district would want him to receive it. The bill was passed with his support or not, so I don't think this is an issue as big as auditing the FED! Though, it's pretty hypocrite if it is true?

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      • I think Dr. Paul has explained this before, and he said something like this: he will vote against big spending bills all day long, but once they get passed, he will try to get the most money for his district as possible. This 1. provides services for the people in his community, and 2. keeps the money out of the hands of the federal government. If money is earmarked, the Treasury Secretary doesn't get to "lose" several hundred billion dollars.

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  16. Genius! Why didn't he think of this 10 years ago? I'm calling my representative right now and my senators as wells! You know what, why don't we rally up this bill so that people can know about this?

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  17. Ok, so go check out this page if you have not yet. It is so crazy how true all the videos are.

    http://www.youtube.com/user/singletreefilms

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  18. Wow!!! Check tis out.

    http://www.youtube.com/watch?v=3RhnHo3RDfg&eurl=http://federalfallacy.blogspot.com/&feature=player_embedded

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  19. christ is not black

    Greetings Mr Paul,
    I thank you for having nerve to stand up to this lucifarian bunch of dry bones. Someone needs to commit(lunny bin) who ever thinks that you can ever survive in life by someone who sells you a counterfit $100 bill for $110 dollars LOL. FED KNOWS WE ARE SO DUMBED DOWN AND EXPLOITS OUR WEAKNESSES AS A COUNTRY THAT ONLY HAS TO PAY OFF JUST UNDER 500 MEMBERS TO CONTROL JUST 300+MILLION PEOPLE. i tell all my friends this ... IF YOU DONT LIKE PAYING TAXES JUST DONT USE THE FED ISSUDE MONEY just that simple. Need some ideas for better currency? (BARTER GOODS FOR SERVICES, SERVICES FOR GOODS, SERVICES FOR SERVICES,AND LASTLY GOODS FOR GOODS). This would not only create a domestic economy wich we desprately need. but look at it this way if somone traded a crapy roof job that leaked for say enough food for 3 weeks then next time someone needed a roof and some one wanted a roof that you knew you wouldnt recomed them so starvation would drive them to excell in what they do, as a professional. also it would keep nabors closer in order to network them selves and thus make most people better by creating a bond between people that in the cercumstances cantot and would not occur. Now you may ask your selves how do you save in this kind of economy? your relationship between people who give and recive to each other would prove to be much more vauleable that anything in this world. Just ask your selves this question how much dose it cost you to make a baby? a life that will love you back for as long as it lives. So shall your nabor view you as the same remember we all have different strengths and weaknesses the divesity would run the economy. Besides ask your selves this last question when you die why cant you take money to heaven? .... because its a discusting thing to him. that is why. hope the few that make it past the great tribulation see all we need is good people who truely care for our fellow man not for greed. the root of the cause why we are in the boat we are in. amen

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  20. Are you kidding? No one who isn't looking is ever going to see this. Nobody cares anymore... or at least not enough of us.

    Now excuse me while I go bury some more jewelery and gold coins in the yard.

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