This week, I signed on to a letter from those on both sides of the political spectrum, from Grover Norquist to Jamie Galbraith and Dean Baker, calling for an audit of the Federal Reserve before Ben Bernanke can be reconfirmed as Chairman. And yesterday, Bernie Sanders put a hold on Bernanke’s nomination until questions about what happened at the Fed during his tenure have been satisfactorily answered.
Today, Dave Dayen breaks the story that a Republican Senator on the Senate banking committee will join Sanders’ hold, which means it now falls to Senate Majority Leader Harry Reid and Senate Banking Committee Chair Chris Dodd to honor them or not.
December 3, 2009
Dear Members of the U.S. Senate:
In the last two years, the Federal Reserve Board has lent several trillion dollars to banks and other private companies, financial and non-financial institutions through a series of special lending facilities. The total amount of loans made through facilities exceeds the annual budget of the United States. In addition, it guaranteed trillions of dollars of various assets and also made hundreds of billions of dollars available to several foreign central banks through currency swap arrangements.
At this point, neither the public nor members of Congress has any information about who benefited from these loans, guarantees, and swap arrangements. There is no information available on the specific terms of the loans – the interest rate charged, the collateral posted, and whether or not they were repaid. There is no information available on how it was decided who would qualify for the Fed’s help and who would be denied assistance.
Almost three quarters of the members of the House of Representatives have co-sponsored a bill calling for an audit of the Federal Reserve Board. This audit will allow Congress to assess how the Fed, under the leadership of its chairman Ben Bernanke, performed in this crisis and whether it acted appropriately in its disbursement of an enormous amount of money and guarantees.
Without this audit, Congress lacks the information it needs to evaluate Mr. Bernanke’s performance. Therefore the Senate should delay action on Mr. Bernanke’s reappointment until an audit of the Fed’s books takes place, the results are made available to the Congress and Mr. Bernanke answers a serious inquiry into the actions he took.
Ryan Alexander, president, Taxpayers for Common Sense
Chris Bowers, founder, OpenLeft
Dean Baker, co-director, Center for Economic and Policy Research
Robert Borosage, co-director, Campaign for America’s Future
Danielle Brian, executive director, Project On Government Oversight
Mark Calabria, director of financial regulation studies, Cato Institute
Mark Cohen, executive director, Government Accountability Project
Tom DeWeese, president, American Policy Center
Tyler Durden, founder, Zero Hedge
Sandra Fabry, executive director, Center for Fiscal Accountability
James Kenneth Galbraith, economist
Adam Green, co-founder, Progressive Change Campaign Committee
George Goehl, executive director, National People’s Action
Jane Hamsher, founder, FireDogLake
Gary Kalman, Washington director, Public Interest Research Group
Matt Kibbe, president, FreedomWorks
Grover Norquist, president, Americans for Tax Reform
Duane Parde, president, National Taxpayers Union
Aaron Swartz, co-founder, Progressive Change Campaign Committee
Phyllis Schlafly, president, Eagle Forum
John Tate, president, Campaign for Liberty
John Taylor, CEO, National Community Reinvestment Coalition
Stephanie Taylor, co-founder, Progressive Change Campaign Committee
Robert Weissman, president, Public Citizen
John Whitehead, president, The Rutherford Institute
Will Reid and Dodd opt for transparency, or will they cover for the Fed, and the bankers–like JPMorgan’s Jamie Dimon–who run it? Reid ignored Chris Dodd’s hold on FISA on behalf of the telecoms, and was handsomely rewarded–he’s the #1 recipient in the Senate of telecom money ($37,800 from Telephone Utilities, $73, 450 from Telecom Services & Equipment) for the 2010 cycle.
But that’s a drop in the bucket next to the money he’s received from the finance sector this cycle: $678,460 from Securities & Investment, $284,890 from Misc. Finance, $146,050 from commercial banks, $130,950 from Finance/Credit Companies. That’s $1,240,350 for the 2010 election cycle alone.
Chris Dodd, on the other hand, reports no money from telecom interests this cycle. Zero. But the banks? Well, that’s a different story. We’re talking $3,830,874 from Securities & Investments, $769,244 from Commercial Banks, $424,620 from Misc Finance, and $273,950 from Finance/Credit Companies. Total: a whopping $5,298,688 for 2010.
If Harry Reid and Chris Dodd ignore the bipartisan holds from Bernie Sanders and the Republicans, they are shielding the Fed from having to explain what it has done. And the financial institutions will have spent their money well.