Transparency and the Federal Reserve: A Briefing

In my capacity as Coalition Development Consultant for the Campaign for Liberty, I helped to organize a briefing on the federal reserve and the lack of transparency around its activities which was held on March 25th 2009.  I have included Andrew Ward's blog on the briefing below.   As of today. June 2nd 2009, there are 179 co-sponsors of H.R. 1207 and now we are working to get R co-sponsorship of the Senate version.

On Wednesday, March 25th Campaign for Liberty sponsored a briefing on transparency and oversight at the Federal Reserve.  The briefing was attended by heads and representatives of various Washington-based organizations, all of whom were very concerned about the direction in which our country is headed.  The meeting opens the gateway to partnerships with over 140 groups across the political spectrum. Of particular importance was OpentheGovernment.org, who represents 40 groups on the Left.

The meeting was opened with an introduction by Campaign for Liberty's own Michael D. Ostrolenk, the primary organizer of the meeting, followed by a discourse on the Federal Reserve and HR 1207 by Paul-Martin Foss, Legislative Assistant to Congressman Ron Paul.

Mr. Foss explained that the crucial issue of Federal Reserve transparency requires an analysis of 31 USC 714, the section of US Code which establishes that the Federal Reserve may be audited by the General Accounting Office (GAO), but which establishes severe restrictions on just what the GAO may in fact audit. Essentially the only thing the GAO is allowed to audit are check-processing, currency storage and shipments, and some regulatory and bank examination functions, etc.  The most important matters, which directly affect the strength of the dollar and the health of the financial system, are immune from oversight.

The four major areas to which GAO may not have access are:

(1) transactions for or with a foreign central bank, government of a foreign country, or nonprivate international financing organization;
(2) deliberations, decisions, or actions on monetary policy matters, including discount window operations, reserves of member banks, securities credit, interest on deposits, and open market operations
(3) transactions made under the direction of the Federal Open Market Committee; or
(4) a part of a discussion or communication among or between members of the Board of Governors and officers and employees of the Federal Reserve System related to clauses (1)-(3) of this subsection.

HR 1207, The Federal Reserve Transparency Act, would eliminate these restrictions and mandate a GAO audit of the Fed to be completed by the end of 2010.

The meeting was then opened up for questions and comments by Mr. Ostrolenk.  Attendees asked Mr. Foss questions regarding congressional support for the bill (it now has over 40 co-sponsors), media attention (Ron Paul and Campaign for Liberty being at the forefront of promotion), and congressional opposition (no open opponents of the bill so far).  Joe Seehusen commented that an audit of the Fed would bring it into the light of public scrutiny, and that these "giant baby steps" would clear the way for greater freedom.

As Mr. Foss explained to the attendees of the briefing: all it takes is one audit to blow away this cloud of secrecy and wake up the American people to the Fed's malfeasance.  It is important to understand that whether you support the abolition of the Federal Reserve as Congressman Paul does, or think that the Federal Reserve has a useful role to play in management of the economy, it should concern people on both sides of the issue that the Federal Reserve is able to wield such an enormous amount of influence over monetary policy, the financial sector, and the economy in general with essentially no oversight.

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