By Zac Nickerson
Why Audit the Federal Reserve? Don’t We Already Do That?
The quick answer to that is "Yes." But it isn’t audited entirely.
The Federal Reserve was created in 1913 after the Federal Reserve Act became law. In the original bill, the only thing remotely close to a mandate of transparency was in Section 10, Paragraph 7, where it states;
“The Federal Reserve Board shall annually make a full report of its operations to the Speaker of the House of Representatives, who shall cause the same to be printed for the information of the Congress.”
This is rather ambiguous in that it fails to cite clear examples of items to be listed in the annual report or what depth of information that should be divulged.
Then, in 1978, Congress passed an amendment to the Accounting and Auditing Act of 1950 to include in the duties of the Comptroller General an audit of the Federal Reserve. It read as follows in Section 2, Paragraph 1:
“The Comptroller General of the United States shall make, under such rules and regulations as he may prescribe, audits—
"(A) of the Federal Reserve Board, all Federal Reserve Banks,
and their branches and facilities;
"(B) of the Federal Deposit Insurance Corporation; and
"(C) of the Office of the Comptroller of the Currency.”
Now this is usually where most people stop reading and erroneously declare that an audit of the Fed is already mandated. But the amendment went on further to restrict the extent of this audit in Paragraph 3:
“An audit made under paragraph (1) (A) shall not include—
"(A) transactions conducted on behalf of or with foreign cen-
tral banks, foreign governments, and nonprivate international
"(B) deliberations, decisions, and actions on monetary policy
matters, including discount window operations, reserves of mem-
ber banks, securities credit, interest on deposits, and open market
"(C) transactions made under the direction of the Federal
Open Market Committee including transactions of the Federal
Reserve System Open Market Account; and
"(D) those portions of oral, written, telegraphic, or telephonic
discussions and communications among or between Members of
the Board of Governors, and officers and employees of the Federal
Reserve System which deal with topics listed in subparagraphs
(A), (B), and (C) of this paragraph.”
Why can’t we know what goes on with these? This audit clearly didn’t shed enough light on the Fed’s operations.
As Dr. Paul stated in a recent blog post, if the Federal Reserve has nothing to hide, then they shouldn’t be afraid of complete transparency. These aren’t government or military secrets; they’re simply maximizing employment, stabilizing prices, conducting our Nation's monetary policy, and over-regulating our economy. Right?
The Audit the Fed bill requires a complete and “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.” It’s time that We the People found out how our money has become worth less and less every passing year and what the Fed has, and has not, been doing about it.