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Fed Audit: Trillions For Foreign Banks, Conflicts of Interest

During a 2½ year period starting at the end of 2007, the Federal Reserve provided more than $16 trillion in secret bailouts to banks and other companies around the world, according to a government audit of some of the U.S. central bank’s operations.

Much of the Fed’s largesse was lavished on banks in Europe (such as Barclays, left)  and Asia, the audit revealed. More than $3 trillion, for example, went to financial institutions in just five European countries. Trillions more flowed toward some of the biggest banks in America. Institutions from Brazil and Mexico to South Korea and Canada also benefited.

The 266-page report, produced by Congress’s non-partisan investigative service known as the Government Accountability Office (GAO), has already sparked intense outrage since its release on July 21. Fed apologists, however, have been quick to defend the actions, saying they were “necessary” to “save” the economy and justified under the Federal Reserve Act.

“The scale and nature of this assistance amounted to an unprecedented expansion of the Federal Reserve System’s traditional role as lender-of-last-resort to depository institutions,” the report stated.

Beyond the secret bailouts — to put the figure in perspective, consider that the output of the entire U.S. economy last year was well under $15 trillion — problems with conflicts of interest and no-bid contracts also featured prominently in the audit report.

One example highlighted by Sen. Bernie Sanders (I – Vt.) was the CEO of JP Morgan Chase serving on the board of the New York Fed even as his firm scooped up almost $500 billion from the central bank. The bank was simultaneously helping to administer the Fed’s secret bailouts.

But JP Morgan Chase was hardly the only example. According to the analysis, more than 80 percent of the Fed’s largest contracts to manage the programs were awarded without bidding.

Many of the companies that received the contracts were also being showered with central-bank bailouts at the same time. And more than a few insiders were granted “waivers” to hold investments in companies that were being rescued by the Fed.

“As a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world,” Sen. Sanders, a self-described socialist, said in a statement about the report. “This is a clear case of socialism for the rich and rugged, you’re-on-your-own individualism for everyone else.”

The congressional investigation was triggered as part of the financial “reform” bill passed last year despite strong Fed opposition. After the original “audit the Fed” bill by Rep. Ron Paul (R-Texas) passed in the House and became extraordinarily popular with Americans, Sen. Sanders helped ensure that only a watered-down version made it out of the Senate.

But even with what is known so far, critics are on the attack. Another report about the Fed is also due to be released in October of this year. And in recent months, other previously secret information about the Fed and its operations has come out following years of litigation.

All of the disclosures have fueled a growing anti-Fed movement aiming to eventually abolish the central bank – essentially a sort of banking cartel with private shareholders but some veneer of government oversight. Sen. Sanders suggested in his public statement, however, that the institution should merely be “reformed” to serve “working families” and not just Wall Street CEOs.

“No agency of the United States government should be allowed to bailout a foreign bank or corporation without the direct approval of Congress and the president,” he noted in the statement, perhaps not realizing that the Fed, by its own admission, is not an agency of the government. “No one who works for a firm receiving direct financial assistance from the Fed should be allowed to sit on the Fed’s board of directors or be employed by the Fed.”

The biggest single beneficiary of the Fed’s bailouts was Citigroup, which received about $2.5 trillion in assistance. Several other top banks in the United States, including Bank of America and Morgan Stanley also benefited to the tune of trillions of dollars. British bank Barclays PLC took close to $1 trillion.

The GAO report suggested that the Fed should implement better policies to deal with conflicts of interest. Its policies on awarding contracts, record keeping and risk management should also be revised, the agency recommended.

The Fed’s chief lawyer responded by saying that the central bank would “strongly consider” the advice. But for now — following bailouts to a bank owned by Libyan dictator Muammar Gaddafi, blatant and widespread market manipulation, wild money printing, and secret bailouts larger than the U.S. economy — analysts expect outrage to continue growing.

source: The New American

Fed Audited: $16 Trillion Loaned to Banks

http://www.youtube.com/watch?v=HUykpqlEvn0

If that $16 Trillion had been divided equally among every man, woman and child in the US (310 million of us) each of us would have received over $50,000. Our economy would be humming, banks & corporations would have gotten their share. On the other hand, if that $16 Trillion had been divided equally among all the people on this planet (not quite 7 billion) every person would have received more than $2200. That’s the scale of this crime against humanity.

The Fed loaned out trillions both internationally and domestically.

With 12 days left until the US reaches their borrowing limit and looks towards default, economists are trying to figure out how to avoid running into the $14.3 trillion debt ceiling. Here’s one answer: stop giving away money.

Results published today of the first-ever audit of the US Federal Reserve reveal that, between December 1 2008 and July 21, 2010, the Fed loaned out over $16 trillion to US and foreign financial institutes. That is nearly $2 trillion more than the entire GDP for the States last year, which topped out at around $14.5 trillion.

During that two year span that the audit takes into consideration, over $4 trillion was lent to banks in the UK, Germany, Switzerland, France and Belgium. Domestically, Citigroup was awarded with $2.5 trillion, Morgan Stanley with $2.04 trillion and Merrill Lunch with $1.9 trillion.

Additionally, the analysis carried out by the Government Accountability Office shows that the Fed outsourced many of its lending operations to the banks that served as a catalyst for the debt crisis.

Fittingly, the actual title of the GAO’s report to congressional addressees released today is “Opportunities Exist to Strengthen Policies and Processes for Managing Emergency Assistance.” In the introduction to the audit, the document explicitly calls out the Fed, noting that Ben Bernanke and company have several options to strengthen risk management practices for future crisis lending.

Sen. Bernie Sanders (I-Vt.) pushed for the audit, in a statement to The Hill today, writes that the data exposed in the findings shows “a clear case of socialism for the rich and rugged, you’re-on-your-own individualism for everyone else.”

Sanders adds that the Fed abused its powers by making unauthorized emergency loans and writes, “No agency of the United States government should be allowed to bail out a foreign bank or corporation without the direct approval of Congress and the president.”

Yesterday, Philadelphia Federal Reserve Bank President Charles Plosser told Reuters that the Fed was working along with the Treasury in order to find out how to handle a default, should the US default on its debt next month. The New York Times responded by calling the discussions “doomsday plans.”

source: RT

GAO Audit Finds Fed Loaned Trillions Secretly to Banks

An audit on the Federal Reserve conducted by the Government Accountability Office (GAO) found secret loans made to large banks and companies around the world and conflicts of interest within the central banking system.

The GAO report says the Federal Reserve issued $16 trillion worth of loans to large private institutions such as JP Morgan Chase, Wells Fargo, and General Electric during the financial crisis.

The mandatory evaluation was part of the Dodd-Frank Wall Street Reform and Consumer ProtectionAct, which was passed one year ago. The report said that all federal emergency bailout money went to large banks and companies around the world instead of to smaller local banks and businesses. Notably, it loaned tax dollars to foreign banks and to large companies outside theUnited States ”from South Korea to Scotland, “according to the GAO report.

The Fed made its 2008 emergency loan decisions without input from Congress and citizens.

“This is a clear case of socialism for the rich and rugged, you’re-on-your-own individualism for everyone else,” said Sanders in his statement. The senator proposed an amendment to the Dodd-Frank Act that required an audit of the Federal Reserve. Sanders, who is an Independent and strong critic of policies favoring corporations at the expense of ordinary citizens, said “the Federal Reserve must be reformed to serve the needs of working families, not just CEOs on Wall Street.”

A significant example of conflict of interest applied to the current head of the Federal Reserve. The GAO found that William Dudley was issued a waiver in 2008 to keep his shares in companies including those that received federal assistance, such as American International Group Inc. (AIG), while he was still the executive vice president of the New York Fed Markets Group.

Although New York Fed spokesman Jack Gutt said Dudley gave up his AIG shares shortly after succeeding Timothy Geithner as president of the New York Fed, the Fed has not made rules to eliminate potential conflicts of interest.

“No one who works for a firm receiving direct financial assistance from the Fed should be allowed to sit on the Fed’s board of directors or be employed by the Fed,” said Sanders regarding the issue.

The GAO recommends that theinstitution should “strengthen policies for managing noncompetitive vendor selections, conflicts of interest, risks related to emergency lending, and documentation of emergency program decisions.”

Scott Alvarez, general counsel of the New York Fed, responded in a letter to GAO saying that the Fed will “give each recommendation serious attention” and that he believes “the process will further enhance the Federal Reserve’s capability to respond effectively in future crises.”

The GAO will conduct another investigation centering on conflicts of interest in the Fed on Oct 18.

source: Epoch Times

Federal Reserve audit highlights possible conflicts of interest

When the Federal Reserve launched an unprecedented series of interventions in the financial system in 2008, it often moved so quickly that the usual practices for preventing conflicts of interest couldn’t keep up, according to a new report.

An audit of the Fed’s emergency lending programs by the Government Accountability Office, ordered by the financial reform law passed last year and released Thursday, reports generally sound financial management by the central bank as it undertook programs that deployed trillions of dollars to backstop a faltering financial system. But it brings to light difficult issues that arose when the Fed undertook actions that its rules never envisioned.

For instance, William C. Dudley, the president of the Federal Reserve Bank of New York who was a senior official there in 2008, owned stock of American International Group before the Fed bailed out the giant insurance firm. The GAO report did not mention him by name, but Sen. Bernie Sanders (I-Vt.), who spearheaded the audit, identified Dudley as the unnamed official described in the report.

Lawyers at the New York Fed allowed Dudley to continue owning the shares while working on issues relating to the bailout. They concluded that for him to sell the shares immediately after the central bank bailed out the firm would be more ethically problematic than simply holding onto them and selling at a later date.

Dudley “held shares in these companies as part of his personal portfolio that predated his service at the New York Fed,” a spokesman for the central bank said. “A waiver was granted allowing him to hold these shares based in part on the judgement that had he sold these shares immediately after the interventions it would have the appearance of a conflict.”

The GAO report did not condemn the Fed’s actions, it simply illuminated them. Dudley has subsequently sold all the shares on dates agreed to with the bank’s ethics officers, the spokesman said.

The GAO also recommended that the Fed make clearer and more rigorous its policies for hiring independent contractors to manage investment programs. During the crisis, the New York Fed hired outside firms to manage many of its special lending programs, such as one designed to backstop the market for short-term corporate loans, without holding a normal bidding process for the contracts.

The report also found that lines of authority between the Fed’s Board of Governors in Washington and the 12 regional Fed banks around the country were sometimes muddled during the crisis. For example, it was not always clear where authority resided on questions of what collateral would be adequate for an emergency loan.

The report was the latest to detail aspects of the Fed’s actions during the financial crisis that were shrouded in mystery at the time. Another provision in last year’s Dodd-Frank Wall Street regulatory overhaul, also instigated by Sanders, required the disclosure of what individual banks and other entities received loans from the Fed.

“As a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world,” Sanders said in a statement. “This is a clear case of socialism for the rich and rugged, you’re-on-your-own individualism for everyone else.”

The Fed’s general counsel, Scott Alvarez, said in a letter responding to the GAO’s audit that officials will “strongly consider” the recommendations.

source: Washington Post Business

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The Federal Reserve is the chief culprit behind the economic crisis.Its unchecked power to create endless amounts of money out of thin air brought us the boom and bust cycle and causes one financial bubble after another. Since the Fed’s creation in 1913 the dollar has lost more than 96% of its value, and by recklessly inflating the money supply the Fed continues to distort interest rates and intentionally erodes the value of the dollar.

For the past 30 years, Congressman Ron Paul has worked tirelessly to bring much-needed transparency and accountability to the secretive bank. And in 2009 and 2010 his unfaltering dedication showed astonishing results: HR 1207, the bill to audit the Federal Reserve, swept the country and made the central bankers shudder at their desks. The bill passed as an amendment both in the House Financial Services Committee and in the House itself. But eventually the most significant portions of the bill were derailed. (Full story here.)

This year, Audit the Fed is back with a vengeance. Reintroduced on 01/26/2011 as HR 459, Ron Paul’s bill to audit the Federal Reserve now has 196 co-sponsors, and the numbers keep growing! HR 459′s companion bill in the Senate, S 202, has already attracted 19 co-sponsors.

This is history in the making, and victory is within reach. Imagine what will happen if HR 459, The Federal Reserve Transparency Act, comes up for vote in Congress! It has real potential to pass — BUT only if we educate and rally the people to support it and get our Congresspeople to put it to vote and pass it.

Step 1: Your Representative

If your representative is not on the following list of HR 459 co-sponsors, call their offices, write to them, email them. Let them know they need to support HR 459. If you live in their district, let them know. Go to their office.

Capitol Switchboard: (202) 224-3121

HR 459 Co-Sponsors
Rep Adams, Sandy [FL-24] – 2/11/2011
Rep Akin, W. Todd [MO-2] – 6/13/2011
Rep Alexander, Rodney [LA-5] – 1/26/2011
Rep Altmire, Jason [PA-4] – 2/16/2011
Rep Amash, Justin [MI-3] – 2/8/2011
Rep Amodei, Mark E. [NV-2] – 12/12/2011
Rep Austria, Steve [OH-7] – 4/11/2011
Rep Bachmann, Michele [MN-6] – 4/6/2011
Rep Bachus, Spencer [AL-6] – 1/26/2011
Rep Baldwin, Tammy [WI-2] – 2/28/2011
Rep Barletta, Lou [PA-11] – 2/15/2011
Rep Barrow, John [GA-12] – 10/13/2011
Rep Bartlett, Roscoe G. [MD-6] – 1/26/2011
Rep Barton, Joe [TX-6] – 1/26/2011
Rep Benishek, Dan [MI-1] – 5/11/2011
Rep Biggert, Judy [IL-13] – 3/29/2011
Rep Bilbray, Brian P. [CA-50] – 7/6/2011
Rep Bilirakis, Gus M. [FL-9] – 1/26/2011
Rep Blackburn, Marsha [TN-7] – 1/26/2011
Rep Bonner, Jo [AL-1] – 6/22/2011
Rep Boustany, Charles W., Jr. [LA-7] – 5/23/2011
Rep Broun, Paul C. [GA-10] – 1/26/2011
Rep Buchanan, Vern [FL-13] – 2/8/2011
Rep Burgess, Michael C. [TX-26] – 1/26/2011
Rep Burton, Dan [IN-5] – 1/26/2011
Rep Calvert, Ken [CA-44] – 1/26/2011
Rep Camp, Dave [MI-4] – 9/12/2011
Rep Campbell, John [CA-48] – 1/26/2011
Rep Canseco, Francisco “Quico” [TX-23] – 2/8/2011
Rep Carter, John R. [TX-31] – 2/8/2011
Rep Chaffetz, Jason [UT-3] – 1/26/2011
Rep Coffman, Mike [CO-6] – 1/26/2011
Rep Cole, Tom [OK-4] – 5/10/2011
Rep Conyers, John, Jr. [MI-14] – 3/31/2011
Rep Cravaack, Chip [MN-8] – 11/29/2011
Rep Crenshaw, Ander [FL-4] – 3/15/2011
Rep Culberson, John Abney [TX-7] – 5/2/2011
Rep Davis, Geoff [KY-4] – 2/8/2011
Rep DeFazio, Peter A. [OR-4] – 3/15/2011
Rep Dreier, David [CA-26] – 2/8/2011
Rep Duffy, Sean P. [WI-7] – 9/7/2011
Rep Duncan, Jeff [SC-3] – 4/15/2011
Rep Duncan, John J., Jr. [TN-2] – 2/8/2011
Rep Farenthold, Blake [TX-27] – 3/30/2011
Rep Fincher, Stephen Lee [TN-8] – 2/8/2011
Rep Fitzpatrick, Michael G. [PA-8] – 9/19/2011
Rep Flake, Jeff [AZ-6] – 3/30/2011
Rep Flores, Bill [TX-17] – 1/26/2011
Rep Forbes, J. Randy [VA-4] – 1/26/2011
Rep Fortenberry, Jeff [NE-1] – 1/26/2011
Rep Foxx, Virginia [NC-5] – 3/29/2011
Rep Frelinghuysen, Rodney P. [NJ-11] – 4/14/2011
Rep Gallegly, Elton [CA-24] – 1/26/2011
Rep Gardner, Cory [CO-4] – 5/2/2011
Rep Garrett, Scott [NJ-5] – 1/26/2011
Rep Gerlach, Jim [PA-6] – 1/26/2011
Rep Gibson, Christopher P. [NY-20] – 3/1/2011
Rep Gingrey, Phil [GA-11] – 9/7/2011
Rep Gohmert, Louie [TX-1] – 1/26/2011
Rep Goodlatte, Bob [VA-6] – 3/1/2011
Rep Gosar, Paul A. [AZ-1] – 8/1/2011
Rep Gowdy, Trey [SC-4] – 3/29/2011
Rep Granger, Kay [TX-12] – 2/15/2011
Rep Graves, Sam [MO-6] – 4/5/2011
Rep Graves, Tom [GA-9] – 1/26/2011
Rep Green, Gene [TX-29] – 11/2/2011
Rep Griffin, Tim [AR-2] – 4/6/2011
Rep Griffith, H. Morgan [VA-9] – 3/15/2011
Rep Grimm, Michael G. [NY-13] – 10/24/2011
Rep Guinta, Frank C. [NH-1] – 4/15/2011
Rep Guthrie, Brett [KY-2] – 9/12/2011
Rep Harris, Andy [MD-1] – 3/11/2011
Rep Hartzler, Vicky [MO-4] – 9/19/2011
Rep Heck, Joseph J. [NV-3] – 3/29/2011
Rep Heller, Dean [NV-2] – 1/26/2011
Rep Herger, Wally [CA-2] – 4/15/2011
Rep Herrera Beutler, Jaime [WA-3] – 3/29/2011
Rep Hinchey, Maurice D. [NY-22] – 7/21/2011
Rep Huelskamp, Tim [KS-1] – 5/3/2011
Rep Huizenga, Bill [MI-2] – 1/26/2011
Rep Hultgren, Randy [IL-14] – 6/2/2011
Rep Hurt, Robert [VA-5] – 5/23/2011
Rep Jenkins, Lynn [KS-2] – 3/30/2011
Rep Johnson, Sam [TX-3] – 3/10/2011
Rep Johnson, Timothy V. [IL-15] – 2/28/2011
Rep Jones, Walter B., Jr. [NC-3] – 1/26/2011
Rep Kaptur, Marcy [OH-9] – 1/26/2011
Rep Kelly, Mike [PA-3] – 5/12/2011
Rep Kingston, Jack [GA-1] – 3/17/2011
Rep Kissell, Larry [NC-8] – 6/2/2011
Rep Kline, John [MN-2] – 4/5/2011
Rep Kucinich, Dennis J. [OH-10] – 1/26/2011
Rep Labrador, Raul R. [ID-1] – 5/5/2011
Rep Lamborn, Doug [CO-5] – 1/26/2011
Rep Lance, Leonard [NJ-7] – 1/26/2011
Rep Landry, Jeffrey M. [LA-3] – 11/29/2011
Rep Lankford, James [OK-5] – 2/8/2011
Rep Latham, Tom [IA-4] – 3/2/2011
Rep LaTourette, Steven C. [OH-14] – 1/26/2011
Rep Latta, Robert E. [OH-5] – 5/4/2011
Rep LoBiondo, Frank A. [NJ-2] – 1/26/2011
Rep Loebsack, David [IA-2] – 10/24/2011
Rep Lofgren, Zoe [CA-16] – 9/7/2011
Rep Lucas, Frank D. [OK-3] – 10/31/2011
Rep Luetkemeyer, Blaine [MO-9] – 2/8/2011
Rep Lummis, Cynthia M. [WY] – 3/29/2011
Rep Mack, Connie [FL-14] – 2/15/2011
Rep Manzullo, Donald A. [IL-16] – 3/17/2011
Rep Marchant, Kenny [TX-24] – 1/26/2011
Rep Marino, Tom [PA-10] – 3/4/2011
Rep McCarthy, Kevin [CA-22] – 5/23/2011
Rep McCaul, Michael T. [TX-10] – 1/26/2011
Rep McClintock, Tom [CA-4] – 1/26/2011
Rep McCotter, Thaddeus G. [MI-11] – 2/18/2011
Rep McGovern, James P. [MA-3] – 7/6/2011
Rep McIntyre, Mike [NC-7] – 3/29/2011
Rep McKeon, Howard P. “Buck” [CA-25] – 1/26/2011
Rep McKinley, David B. [WV-1] – 1/26/2011
Rep McMorris Rodgers, Cathy [WA-5] – 1/26/2011
Rep Meehan, Patrick [PA-7] – 7/21/2011
Rep Michaud, Michael H. [ME-2] – 3/17/2011
Rep Miller, Candice S. [MI-10] – 8/5/2011
Rep Miller, Gary G. [CA-42] – 1/26/2011
Rep Miller, Jeff [FL-1] – 1/26/2011
Rep Mulvaney, Mick [SC-5] – 2/8/2011
Rep Murphy, Tim [PA-18] – 4/1/2011
Rep Myrick, Sue Wilkins [NC-9] – 1/26/2011
Rep Neugebauer, Randy [TX-19] – 4/12/2011
Rep Noem, Kristi L. [SD] – 10/13/2011
Rep Nugent, Richard [FL-5] – 2/8/2011
Rep Paulsen, Erik [MN-3] – 12/6/2011
Rep Petri, Thomas E. [WI-6] – 1/26/2011
Rep Platts, Todd Russell [PA-19] – 4/15/2011
Rep Polis, Jared [CO-2] – 3/29/2011
Rep Pompeo, Mike [KS-4] – 7/25/2011
Rep Posey, Bill [FL-15] – 1/26/2011
Rep Price, Tom [GA-6] – 7/6/2011
Rep Reed, Tom [NY-29] – 1/26/2011
Rep Rehberg, Denny [MT] – 1/26/2011
Rep Ribble, Reid J. [WI-8] – 3/10/2011
Rep Rigell, E. Scott [VA-2] – 2/8/2011
Rep Roe, David P. [TN-1] – 9/7/2011
Rep Rogers, Mike D. [AL-3] – 5/10/2011
Rep Rogers, Mike J. [MI-8] – 3/17/2011
Rep Rohrabacher, Dana [CA-46] – 1/26/2011
Rep Rokita, Todd [IN-4] – 5/10/2011
Rep Rooney, Thomas J. [FL-16] – 9/12/2011
Rep Roskam, Peter J. [IL-6] – 7/29/2011
Rep Ross, Dennis [FL-12] – 1/26/2011
Rep Ross, Mike [AR-4] – 2/8/2011
Rep Rothman, Steven R. [NJ-9] – 5/23/2011
Rep Runyan, Jon [NJ-3] – 5/3/2011
Rep Scalise, Steve [LA-1] – 10/13/2011
Rep Schilling, Robert T. [IL-17] – 4/5/2011
Rep Schock, Aaron [IL-18] – 1/26/2011
Rep Schrader, Kurt [OR-5] – 3/10/2011
Rep Schweikert, David [AZ-5] – 2/8/2011
Rep Scott, Austin [GA-8] – 9/7/2011
Rep Scott, Tim [SC-1] – 9/13/2011
Rep Sensenbrenner, F. James, Jr. [WI-5] – 2/11/2011
Rep Shimkus, John [IL-19] – 4/12/2011
Rep Shuster, Bill [PA-9] – 5/23/2011
Rep Simpson, Michael K. [ID-2] – 1/26/2011
Rep Smith, Adrian [NE-3] – 1/26/2011
Rep Smith, Lamar [TX-21] – 1/26/2011
Rep Speier, Jackie [CA-12] – 11/30/2011
Rep Stark, Fortney Pete [CA-13] – 5/3/2011
Rep Stearns, Cliff [FL-6] – 3/29/2011
Rep Stutzman, Marlin A. [IN-3] – 3/10/2011
Rep Sullivan, John [OK-1] – 6/13/2011
Rep Terry, Lee [NE-2] – 3/4/2011
Rep Thompson, Glenn [PA-5] – 1/26/2011
Rep Thornberry, Mac [TX-13] – 2/15/2011
Rep Tiberi, Patrick J. [OH-12] – 5/25/2011
Rep Tierney, John F. [MA-6] – 5/3/2011
Rep Tipton, Scott [CO-3] – 4/5/2011
Rep Turner, Michael R. [OH-3] – 5/23/2011
Rep Visclosky, Peter J. [IN-1] – 4/1/2011
Rep Walberg, Tim [MI-7] – 2/11/2011
Rep Walden, Greg [OR-2] – 11/2/2011
Rep Walsh, Joe [IL-8] – 2/17/2011
Rep Welch, Peter [VT] – 6/22/2011
Rep West, Allen B. [FL-22] – 10/24/2011
Rep Westmoreland, Lynn A. [GA-3] – 2/8/2011
Rep Wilson, Joe [SC-2] – 2/28/2011
Rep Wittman, Robert J. [VA-1] – 1/26/2011
Rep Wolf, Frank R. [VA-10] – 9/7/2011
Rep Womack, Steve [AR-3] – 9/7/2011
Rep Woodall, Rob [GA-7] – 1/26/2011
Rep Woolsey, Lynn C. [CA-6] – 1/26/2011
Rep Wu, David [OR-1] – 5/4/2011
Rep Yarmuth, John A. [KY-3] – 5/3/2011
Rep Yoder, Kevin [KS-3] – 8/5/2011
Rep Young, C.W. Bill [FL-10] – 1/26/2011
Rep Young, Don [AK] – 1/26/2011
Rep Young, Todd C. [IN-9] – 3/29/2011

S 202 Co-Sponsors

Sen Barrasso, John [WY] – 10/6/2011
Sen Blunt, Roy [MO] – 10/6/2011
Sen Boozman, John [AR] – 5/24/2011
Sen Burr, Richard [NC] – 10/6/2011
Sen Chambliss, Saxby [GA] – 7/25/2011
Sen Coburn, Tom [OK] – 10/6/2011
Sen Crapo, Mike [ID] – 9/6/2011
Sen DeMint, Jim [SC] – 1/26/2011
Sen Grassley, Chuck [IA] – 10/31/2011
Sen Hatch, Orrin G. [UT] – 5/24/2011
Sen Heller, Dean [NV] – 6/22/2011
Sen Inhofe, James M. [OK] – 10/6/2011
Sen Lee, Mike [UT] – 3/1/2011
Sen McCain, John [AZ] – 10/31/2011
Sen Risch, James E. [ID] – 10/6/2011
Sen Rubio, Marco [FL] – 10/6/2011
Sen Thune, John [SD] – 10/6/2011
Sen Vitter, David [LA] – 1/26/2011
Sen Wicker, Roger F. [MS] – 10/6/2011

Here’s a sample letter you can use:

Step 3: The People

Tell everyone you know about HR 459 and S 202. Ask them to support the bills and to contact their representative as well. Link to this page and to CampaignForLiberty.com.

Link: http://www.ronpaul.com/legislation/audit-the-federal-reserve-fed-hr-459-s202/

Banner:

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Read the Bill

H.R.459 — Federal Reserve Transparency Act of 2011 (Introduced in House – IH)

HR 459 IH

112th CONGRESS 1st Session

H. R. 459

To require a full audit of the Board of Governors of the Federal Reserve System and the Federal reserve banks by the Comptroller General of the United States before the end of 2012, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

January 26, 2011

A BILL

To require a full audit of the Board of Governors of the Federal Reserve System and the Federal reserve banks by the Comptroller General of the United States before the end of 2012, and for other purposes.

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 2011′.

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

(a) In General- Notwithstanding section 714 of title 31, United States Code, or any other provision of law, an audit of the Board of Governors of the Federal Reserve System and the Federal reserve banks under subsection (b) of such section 714 shall be completed before the end of 2012.

(b) Report-

• (1) IN GENERAL- A report on the audit required under subsection (a) 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 subcommittee of jurisdiction in the House of Representatives and the Senate, and any other Member of Congress who requests it.

• (2) CONTENTS- The report under paragraph (1) 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.

(c) Repeal of Certain Limitations- Subsection (b) of section 714 of title 31, United States Code, is amended by striking all after `in writing.’.

(d) Technical and Conforming Amendment- Section 714 of title 31, United States Code, is amended by striking subsection (f).

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“End The Fed” Protest in Washington DC on July 3, 2010

Just say NO!vember

Audit the Fed Update: It’s Over… For Now

Ron Paul’s attempt to audit the Federal Reserve, which had previously attracted 320 co-sponsors in the House of Representatives, failed by a vote of 229-198.

All Republicans voted in favor of the measure with 23 Democrats crossing the aisle to vote with Republicans. 114 co-sponsors of HR 1207, all Democrats, jumped ship and voted against Audit the Fed.

How They Voted

Watch Ron Paul’s Video Update

Audit the Fed Update: The Fed has won the battle but they will lose the war

Ron Paul discusses the latest in the efforts to get a full and complete audit of the Fed as well as the future of Fed transparency.

http://www.youtube.com/watch?v=7IixLg4AtNI

Ron Paul’s attempt to audit the Federal Reserve, which was previously co-sponsored by 320 members of the House (HR 1207), failed by a vote of 229-198. All Republicans voted in favor of the measure with 23 Democrats crossing the aisle to vote with Republicans. 114 co-sponsors of HR 1207, all Democrats, jumped ship and voted against Audit the Fed.

The GOP had offered the Fed audit as the minority’s last chance to alter the financial regulation bill. The bill does have an watered-down audit provision in the conference report, but it is limited to loans made by the Fed during the height of the economic crisis. Ron Paul’s bill would have allowed a total examination of the Fed’s books.

How they voted

KEY: Democrats, Republicans, HR 1207 Co-Sponsors

YEA! = Audit the Federal Reserve System (a private rockefeller/rothschild bank that started in 1913 that bankrupted the USA by 1933 & stole OUR gold, and which is paid INTEREST on this debt in the form of UN-Constitutional unapportioned federal INCOME TAXES on your WAGES that were traded even-up for LABOR)

NAY! Traitors:

Not Voting (cowards, but not traitors)

Bishop (UT)
Taylor
Wamp
Woolsey
Young (AK)

LEARN ABOUT THE FEDERAL RESERVE!

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TSLA stock went from an IPO of $17, up to $20 on the first day, up to $24.24 on the second day, peaking at $30 per share.

Tesla Motors sells 2 models of cars:

2010 Tesla Roadster $128,500

- Improved Power and Handling
- Power motor: Hand wound stator and increased winding density for lower resistance and higher peak torque
- 0-60 mph in 3.7 seconds
- Custom tuned suspension: Adjustable dampers and anti-roll bars tuned to driver’s preference
- Dark finish forged alloy Tesla wheels
- Tires: Yokohama A048 Ultra High Performance
- Unique Sport badging

Tesla is now delivering the Roadster Sport, a shockingly high-performance sports car based on the world’s leading electric, zero emission vehicle. Price starts at $128,500 in the United States, €99,000 (excluding VAT) in Europe and £101,900 (including VAT) in United Kingdom.

2012 Tesla Model S $49,900

- 300 mile range
- 45 minute QuickCharge
- 0-60 mph in 5.6 seconds
- Seats 7 people
- More cargo space than sedans
- 2X as efficient as hybrids
- 17 inch infotainment touchscreen

With a range up to 300 miles and 45-minute QuickCharge, the Model S can carry five adults and two children in quiet comfort – and you can charge it from any outlet, without ever stopping for gas. World’s first mass-produced electric vehicle offers performance, efficiency and unrivaled utility for a base price of $49,900*, making it the only car you’ll ever need.

Electric Power

Drive Quickly, Tread Lightly. Most electric vehicles operate under the assumption that driving is merely a necessary evil if you need to get someplace you can’t reach on foot or bike. The result has been cars that are designed, built, and marketed in ways that refuse to glorify driving.

We respectfully disagree. We believe driving is exhilarating. Just watch any child on a go-cart and the joy is plain to see. And when you can soar along at top speed, knowing the only oil in the car is in the transmission, the only emissions are the songs from the radio, the ride becomes more enjoyable still.

The Ultimate Multi-Fuel Vehicle

Electric cars equal freedom. Not simply from oil reliance, but from dependence on any specific power source. Electric power can be generated from natural gas, coal, solar, wind, hydro, and nuclear sources — or a combination of all of them — without changing the design of the car. No matter how or when the world changes, the car adapts, making it immune from obsolescence.

We foresee a day when all cars run on electric power and when people will struggle to remember a time when a love of driving came with a side order of guilt.

No More Tradeoffs

Up until now, if you wanted a car with amazing gas mileage, you’d pick something like the leading hybrid; but when you pressed down the gas pedal to zip up a freeway on-ramp, you’d likely be a little disappointed — it takes over 10 seconds to reach 60 miles per hour. On the other hand, if you demanded the 0 to 60 times of a $300,000 supercar, you’d wind up with an embarrassing 9 miles to the gallon in the city.

Acceleration & Torque = Instant Freedom

The first time you drive the Tesla Roadster, prepare to be surprised. You’re at freeway speed in seconds without even thinking about it. There is no clutch pedal to contend with and no race-car driving techniques to perform. Just the touch of your foot and you’re off, without any of the sluggishness of an automatic.

How powerful is the acceleration? A quick story to illustrate. A favorite trick here at Tesla Motors is to invite a passenger along and ask him to turn on the radio. At the precise moment we ask, we accelerate. Our passenger simply can’t sit forward enough to reach the dials. But who needs music when you’re experiencing such a symphony of motion.

Rest assured that this responsiveness works at all speeds, as noticeable when you’re inching your way through parking lots as when flying along freeways.

100% Torque, 100% of the Time
The Tesla Roadster delivers full availability of performance every moment you are in the car, even while at a stoplight. Its peak torque begins at 0 rpm and stays powerful at 14,000 rpm.

This is the precise opposite of what you experience with a gasoline engine, which has very little torque at a low rpm and only reaches peak torque in a narrow rpm range. This forces you to make frequent gear changes to maintain optimal torque. With the Tesla Roadster, you get great acceleration and the highest energy efficiency at the same time. All while requiring no special driving skills to enjoy it. This makes the Tesla Roadster six times as efficient as the best sports cars while producing one-tenth of the pollution.

Tesla Raises Hopes for Cleantech IPOs

Its stock’s 41% jump on Day One may herald a shift in sentiment

With all eyes in the cleantech world focused on Tesla Motors’ (TSLA) first day of trading on June 29, venture capitalists and industry executives released a collective cheer when the stock of the electric vehicle maker surged 41 percent. Even sweeter, the investor support came on a day when the Standard & Poor’s 500-stock index and Nasdaq both plunged more than 3 percent.

It’s been a grim time for cleantech investors. Prior to Tesla, there hadn’t been a U.S.-based initial public offering since A123 Systems (AONE), a maker of batteries for electric cars, went public in September. With stock markets worldwide reeling, solar-panel maker Solyndra pulled its IPO filing on June 18, choosing instead to raise $175 million in debt.

That was only part of the reason for skepticism leading up to Tesla’s first day of trading. The company has been losing money since opening for business in 2003, and Tesla says it won’t see profitability for at least two years as it moves from selling $109,000 sports cars to cheaper sedans.

The Palo Alto (Calif.)-based company’s shares rallied on Day One to a stock-market value in excess of $2 billion. Chief Executive Officer Elon Musk sold shares worth at least $24 million. The strong showing had investors seeing a window of opportunity for more “liquidity events,” to use a Silicon Valley term for IPO. “It really lubricates the way,” says Nat Goldhaber, managing director of Claremont Creek Ventures in Oakland, Calif., which invests in energy-conservation companies. “You’ll see a rush of bankers and companies trying to push through new green-based IPOs.”

THE NEXT CLEANTECH IPO?

No one knows which cleantech company might go public next, but the likeliest are those that, like Tesla, have raised tremendous amounts of money—and thus need to find a way to pay back investors. Fuel-cell manufacturer Bloom Energy, biofuel producer Sapphire Energy, and solar companies eSolar and BrightSource Energy each have raised at least $100-million in venture capital. Better Place, which is trying to build a network of battery-swapping facilities—sort of like filling stations for electric cars—raised $350 million in May.

For these and other cleantech companies, the Tesla IPO “is a real confidence builder,” says Gary Bloom, the CEO of eMeter, which makes software to help utilities manage data and bolster energy efficiency. EMeter has raised more than $70 million. While the decade-old company isn’t preparing for an IPO, Bloom says, Tesla’s success is “proving that things are moving in the cleantech sector and that there’s real deliverables.”

Bloom is quick to caution against reading too much into Tesla’s opening-day gains. After A123 raced out of the gates on Sept. 24, the stock proceeded to lose half its value over the next nine months and continues to sell below its offer price.

The bottom line Tesla’s initial public offering may be a “real confidence builder” that paves the way for more cleantech IPOs.

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EMERGENCY! Senate Sellout Threatens Ron Paul’s Audit the Fed Bills HR1207 + S.604

Bernie Sanders sold out to wall street. tell him we want OUR S.604 back, which we already have 32 cosponsors = 1/3 of the senate + 319 cosponsors for it’s sister bill HR1207 = 73% of the house backing us. Audit the Fed! and then End the Fed! that’s why JFK gave us Executive Order #11110

http://www.youtube.com/watch?v=iuVBAMQ0j4A

Ron Paul: Audit the Fed! No More Bailouts!

http://www.youtube.com/watch?v=wVNvjQobulQ

Congressman Ron Paul (R-Texas) and Senator Bernie Sanders (I-Vt.) had long worked together on their campaign for a full audit of the Federal Reserve, which emerged last year as H.R. 1207 and S. 604. Dr. Paul’s House version of the Audit the Fed bill had 319 cosponsors; Sanders’ Senate version, 32 cosponsors. Despite these bills’ massive popularity with a public grown increasingly suspicious of central banking, efforts to audit our central bank, the Federal Reserve, have been effectively thwarted for the time being.

Last-minute Senate maneuvering on Thursday May 6 resulted in a compromise measure that would require the Fed to disclose more details about its lending practices during the financial crisis, but would permit just a one-time audit of its loans and a one-time review of Fed governance. The compromise would also shield the Fed’s interest rate decision-making procedures from Goverment Accounting Office (GAO) scrutiny.

Dr. Paul, who has long advocated opening the Fed’s books to scrutiny to reveal its dealings with foreign banks as well as its domestic lending practices, expressed disappointment with the compromise in a sternly worded statement released Thursday evening.

Sanders had originally argued, “At a time when our entire financial system almost collapsed, we cannot let the Fed operate in secrecy any longer.”

Federal Reserve Chairman Ben Bernanke disagreed. The Wall Street Journal reported his remark that the original measure would “seriously threaten monetary policy independence, increase inflation fears and market interest rates, and damage economic stability and job creation.”

Members of the Obama administration, among their number former Fed officials, backed the changes to Sanders amendment. These include Treasury Secretary Timothy Geithner, former chair of the New York Federal Reserve, and Paul Volcker, who was Alan Greenspan’s predecessor as Fed chair. They gave credit to Christopher Dodd (D-Ct.), Chair of the Senate Banking Committee, for pushing through the compromise bill. Deputy Treasury Secretary Neal Wolin stated that the compromise measure would allow for a comprehensive audit of the Fed’s operations “while preserving the existing protections of the Federal Reserve’s independence with respect to monetary policy.” It is just this independence which the Fed’s critics wish to challenge, as it leaves the Fed essentially accountable to no one except other elite bankers — some of them foreign.

On Thursday night, Ron Paul made an urgent appeal in a two and a half minute video (see below) urging Senators to reject the Sanders Amendment when it comes up for a vote, possibly as soon as next Tuesday (May 11). Dr. Paul stated,

I’m not a bit surprised that the Federal Reserve got to the Senate. I had expected Bernie Sanders to offer 604, which was the same as 1207, which is Audit the Fed bill, and at the last minute he switched it and watered it down, and really it adds nothing, It’s a possibility that it even makes the current conditions worse….

But as we speak — this is Thursday night — they are working on this on the Senate floor. And we need to get as many messages as possible to as many Senators you can think of, especially to Bernie Sanders’ office, that we don’t want this version….

But the only thing that would be fair to the American people after all this work and energy that we put into this is to have an up and down vote on what was our 1207 in the House which is 604 in the Senate….

Dr. Paul’s website adds that the compromise “exempts monetary policy decisions, discount window operations, and agreements with foreign central banks from [GAO] audit. This is of particular concern when several countries such as Greece, Portugal, and Spain are seeking IMF help in the midst of their financial crises, because American taxpayers provide fully 17% of all IMF funding.”

“Taxpayers are weary of bailing out privileged banks and corporations in the U.S.,” Dr. Paul added, “and we certainly cannot afford to bail out entire countries. The possibility of this happening behind a veil of Federal Reserve secrecy is not acceptable.”

“This compromise language represents a huge missed opportunity by Congress to finally make the Fed accountable for trillions of taxpayer dollars it administers. Full transparency, via a full GAO audit, is the only acceptable option. However, I am grateful to Senator Vitter for offering the original full audit language in an alternative amendment to the bill.”

The John Birch Society has issued a press release urging opposition to the compromise measure and restoration of the original language. Readers are invited to go to “Ron Paul Appeals for Help to Rescue His ‘Audit the Fed’ Bill in the Senate” and spreading the word on social networking sites such as Twitter and Facebook.

Or they may contact their Senators directly to urge support for an amendment that would restore the original ‘Audit the Fed’ language and intent:  “As Ron Paul says in the video,” reads the JBS statement, “it’s vital and urgent that we do as much as we can to bombard the Senate with information that we the people deserve to have an up-or-down vote on Audit the Fed bill.”

View Ron Paul’s complete statement below. The vote on the compromise measure is expected to take place next Tuesday, May 11.

Source: The New American

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The Federal Reserve will finally be required to disclose the names of banks that could have collapsed if they had not received emergency loans. The story from Ronald D. Orol of MarketWatch.com:

WASHINGTON (MarketWatch) – The Federal Reserve will be required to identify the names of banks that could have collapsed if not for the central bank’s emergency lending, a federal appeals court said Friday. The U.S. Court of Appeals for the Second Circuit in New York ruled on Friday that the Fed needs to disclose documents in response to Freedom of Information Act requests by Bloomberg L.P. and other news organizations. “We are reviewing the decision and considering our options for reconsideration or appeal,” said Fed spokeswoman Barbara Hagenbaugh.

source: AuditTheFed.com

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http://www.youtube.com/watch?v=8Ry6-1L2Xxs

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Washington, D.C. – Congressman Ron Paul has continued to run his Congressional office in a frugal manner, and was able to return more than $100,000 from his allotted office budget to the Treasury this year, an increase over the $90,000 returned last year.

“Since my first year in Congress representing the 14th district I have managed my office in a frugal manner, instructing staff to provide the greatest possible service to the people of the 14th district at the least possible cost to taxpayers,” said Paul.

Source: Ron Paul

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Jekyll Island, Georgia on January 26, 2010

Robert P. Murphy – Only the Austrians Can Explain Depressions
Christopher Westley – Why the Fed Got Birthed
Peter G. Klein – Did Keynesian Economics Win the Battle of Ideas?
Douglas E. French – Failure and Prosperity
Llewellyn H. Rockwell, Jr. – Parallel Lives: Liberty or Power?
Joseph T. Salerno – The Macroeconomics of the Fed: Mainstream and Austrian
Mark Thornton – What Were They Saying in July 2007?
George Selgin – The Fed’s Dismal Record
Gary North – Heckle and Jekyll: How Murray Rothbard Got the Fed’s Story Right
Thomas E. Woods, Jr. – The Source and Workings of the Latest Crisis
Ron Paul – My Battle Against the Fed

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House passes HR1207 – Ron Paul voted against it

Ron Paul’s HR1207 is one step closer to becoming law. The bill was attached to a horrible financial “reform” bill which calls for the creation of yet another government agency to regulate private industry. So of course Ron Paul voted against it on principle, despite the fact that it contains the “Audit the Fed” bill he’s worked so hard for.

Source: Liberty Maven

Ron Paul votes against his own amendment

Congressman Ron Paul (R Texas) is the last true statesman. Want proof, the Congressman and 2008 Presidential candidate fought more than twenty years to finally create an amendment to fully audit the Federal Reserve, which is the main cause of the present financial crisis.

The Audit the Fed bill was accepted as an amendment to a larger bill, the Wall Street Regulatory Overhaul. Even though the congressman’s bill was attached he could not in good faith vote for the larger legislation. Imagine a country full of men like that. Imagine just having 100 representatives like that.

The legislation will now go to the Senate for a vote. Ron Paul said “I have no clout in Congress, it was the people (grass roots) who made this happen.” A good guess would be that the Senate will try to take this amendment out. Reportedly, Senator’s are a little closer to those at the Fed than Congressman. It will be up to the people once again to make sure this amendment sticks if the larger bill is passed.

Voters should take notes from Dr. Paul on this issue. When your representatives have back bones like him liberty will flourish. People must become more involved and not fall for the left/right nonsense. There obviously is still room for honesty and integrity in Washington but it will be up to you to make it happen.

As you can see auditing the Federal Reserve is not an easy task. Some say they are more powerful than the President since they control the money supply. It’s reported that John F. Kennedy tried to abolish this powerful organization before being assassinated. Auditing it has been hard enough.

Source: Examiner.com

House Passes Wall Street Reform Bill With Zero GOP Votes

In a close vote, the House of Representatives Friday afternoon passed a financial reform bill intended to re-regulate Wall Street and increase protections for Main Street.

The bill, passed in a 223-202 vote, calls for the creation of a new federal agency dedicated to protecting consumers that would police consumer credit products like mortgages and credit cards. It also establishes new rules for the trading of derivatives and increases the transparency of the credit-rating process — two previously under-regulated parts of the economy that played a large role in last year’s economic collapse.

Not a single Republican voted for the bill. Twenty-seven Democrats broke with the rest of their party to vote against it.

The measure includes language, introduced in committee by Reps. Ron Paul (R-Texas) and Alan Grayson (D-Fla.), that would authorize an expansive audit of the Federal Reserve, a landmark achievement for critics of the central bank’s secretive operations.

The bill also requires systemically important banks to pay into a fund that would be used to break them up and sell them off if they go bankrupt. Republicans bitterly and inaccurately referred to it as a “bailout fund,” telegraphing a critique that will undoubtedly re-emerge during the 2010 midterm elections.

“Today is an important milestone in reversing the decades-long stranglehold Wall Street and big banks have had over our economy. But it is just the first step,” said Service Employees International Union Secretary-Treasurer Anna Burger. “Despite the millions Wall Street and the Chamber of Commerce spent fighting the demands of the American people and the dozens of visits by big bank CEOs to strong-arm members of Congress, our leaders found the political will and courage to pass the most historic financial reform legislation in nearly 80 years.”

The fight to fundamentally reform financial regulations began soon after President Barack Obama took office. Public zeal, though, was tempered on Capitol Hill by bankers and other Wall Street titans, who united to fight against the kind of reform advocated by consumers, union groups, and academics.

The bill disappointed some consumer groups, who pledged to work to make it stronger as it moves to the Senate.

“The bill does very little to address industry structure,” the consumer advocacy group Public Citizen said in a statement. “The biggest banks are now bigger than they were before the crisis.”

Michael Calhoun, president of the Center for Responsible Lending, hailed the bill’s creation of the Consumer Financial Protection Agency, but worried it goes too far in allowing federal regulators to preempt their state compatriots.

“The bill would provide consumers with significant protections from the industry practices that dismantled our economy and those of countries around the world,” he said. “We commend the House for this vote to protect families and small business from unfair, unsafe financial practices. However, we remain concerned that the bill allows the same federal banking regulators whose inaction led to the current crisis to continue to ignore state law. That must be fixed as the legislation moves forward.”

Despite the advocacy by financial luminaries like former Federal Reserve Chairman Paul Volcker, the bill does nothing to break up big banks or address the mixing of commercial and investment banking by giant firms like JPMorgan Chase and Goldman Sachs.

Barbara Roper, director of investor protection at the Consumer Federation of America, praised the part of the bill dealing with credit rating agencies — with a caveat, though.

“If you accept the whole business model as a given, the rest of it is strong,” she said, referring to the fact that the agencies are paid by bond issuers to rate their products, creating an inherent conflict of interest.

Specifically, the bill subjects the credit rating agencies to increased liability, allowing for aggrieved investors to sue. Also, thanks to Rep. Brad Sherman (D-Calif.), a provision was added mandating that the agencies owe a duty of care to investors, rather than just to the bond issuers that pay them, she said.

The bill takes a stab at regulating derivatives, but key reforms were either ignored or voted down. An amendment by Bart Stupak (D-Mich.) calling for increased transparency in trading, which was backed by a coalition of pro-reform advocates, was voted down 330-98.

Financial Services Committee Chairman Barney Frank offered another amendment regarding derivatives that would have beefed up the powers of federal regulators, who have long lacked critical authority to initiate meaningful regulation. That, too, died.

A third amendment would have banned those derivatives that are, in essence, used by big financial firms to place bets upon bets upon bets, like the kind pioneered by AIG that helped crash the financial system last year. It also was voted down.

“Basically, the financial houses and the big banks are working [these amendments] real hard,” Stupak said. “Wall Street’s been working hard. We’ve been tripping over them all week. They’ve won this round.”

Public Citizen offered this explanation:

It’s no mystery why this legislation is not stronger. Wall Street spent $5 billion in political investments in the decade before the financial crisis to obtain deregulation and non-enforcement of existing rules.

Despite Wall Street having crashed the economy, nothing has changed on Capitol Hill. Wall Street continues to invest heavily in politics and wield enormous influence. More than 900 former federal employees, including 70 former members of Congress, are working as lobbyists for the financial services sector this year. Wall Street has spent more than $40 million on campaign contributions since November 2008.

“It was the single most important they needed to get right if they wanted to protect the system from future crises, and I don’t think they got it right,” Roper said.

The bill also addressed investor protection, increasing it in some areas but weakening it in others. Shareholders will now be able to hold non-binding votes on executive compensation — a big win for investor groups. But the bill also includes a provision that changes current law by exempting about half of all publicly-traded companies from having to get audits of their internal controls. Fraud will be harder to catch, investor groups argue.

The House also voted to kill what many experts, consumer advocates and economists believe to be the best — and perhaps the only — way to stem the rising tide of foreclosures: a provision that would have allowed judges to cut the principal for struggling homeowners in bankruptcy.

Belying their expressions of outrage towards banks and sympathy for struggling homeowners, enough Democrats joined Republicans to kill the amendment offered by Democrats John Conyers of Michigan and Jim Marshall of Georgia, by a 241-188 vote.

Bankruptcy courts may reduce several forms of debt for distressed borrowers, but not the mortgage on a primary residence. Judges can, however, alter loan terms on vacation homes and cars, for example.

In March, the House passed a bill that was “substantively identical” to today’s amendment, according to a summary of the amendment provided by the chamber’s Rules Committee. The Senate, however, voted it down, leading Sen. Dick Durbin (D-Ill.), a longtime advocate for homeowners, to conclude that banks “frankly own the place.”

“The financial industry has so much invested in political influence, in lobbying, in campaign contributions, into having a local network through the local banks and the credit unions,” said Rep. Brad Miller (D-N.C.). “It’s just very hard to go up against that based upon a strong public policy objective.”

Backers of the measure thought it had a reasonable chance of passage, since, after all, it had already passed, and the foreclosure crisis has only gotten worse. About one in seven homeowners with a mortgage are either delinquent or in foreclosure. The passage of time, however, gave banks a chance to work the halls.

“We got a vote for it earlier this year, but it took a huge effort. There was none of that effort this time. I think that leadership has been working other issues in the bill, but not that one. And there’s enormous opposition to it,” said Miller.

One in four homeowners with a mortgage are “underwater,” meaning they owe more on the home than it’s worth. The administration’s $75 billion foreclosure-prevention effort does virtually nothing to help those homeowners, consumer advocates and economists argue.

Furthermore, since the program’s launch in March, less than 32,000 troubled homeowners have received permanent relief through the government’s mortgage modification plan. It’s supposed to help three to four million homeowners avoid foreclosure.

“You would think that would be a strong argument for doing something about it,” Miller said. “And with the continued foreclosure rate and the effect that’s having on home values and the effect they’re having on each other, being such a downward force on our economy. But there’s just a united front of opposition by the financial industry. If some members are playing it by thinking, well, I’ll give them this vote but then I’ll vote for the CFPA, I guess I can see that calculation.”

Marshall pinned some of the blame on Treasury Secretary Tim Geithner, who had been cool to the idea last spring.

“The leadership here in the House is a big friend to this bill. The White House, well, the Treasury Secretary made some comments earlier this year that I thought were unfortunate. Other than Geithner’s comments, I haven’t really heard anything else from the White House. Obviously it’s not on their priority list, among the many things they don’t have much of an opinion about. Though Geithner did say something, and I wish I could recall, he said something earlier this year that was chilling. Not that he said it was a bad idea, but it certainly wasn’t an endorsement,” said Marshall.

Candidate Obama supported the idea of allowing judges to modify mortgages in bankruptcy en route to the White House. He even expressed public support in February when outlining his plan to stem foreclosures. But it wasn’t in his detailed plan released the next month. Since then, the White House has largely been silent.

President Obama cheered the House action Friday. “This legislation brings us another important step closer to necessary, comprehensive financial reform that will create clear rules of the road, consistent and systematic enforcement of those rules, and a stronger, more stable financial system with better protections for consumers and investors,” he said in a statement.

But the loopholes in the bill and the reforms that were voted down revealed something else to Roper — an apparent deep-seated hostility to government regulation.

Time and time again, Roper noticed various reform proposals killed on the specious claim that they would kill jobs. Looking beyond today’s vote, there are deep, structural roadblocks to fundamental reform, she said.

“Even as they’re trying to cure the regulatory failures that led to the current crisis, they’re setting us up for future crises,” she said. “It’s a philosophy and attitude to regulation that suggests that as soon as the spotlight is off they will be back to attacking regulation as too costly.”

The vote, she said, reveals “that the attitude, the underlying problem, has not changed, and will come back to haunt us in the future.”

“It’s hard to be all that enthusiastic when you know that nothing has changed,” she said.

Source: Huffington Post

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