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DeMint's Faux Fed Transparency Bill

January 26, 2010 - by Donny Shaw

Sen. Jim DeMint [R, SC] is one of the 31 co-sponsors of Sen. Bernie Sanders’ [I, VT] popular “audit the Fed” bill (S. 604), which mirrors the Ron Paul bill in the House. But he has also introduced his own version of the bill that would maintain the Fed’s current level of secrecy under the guise of the “audit the Fed” ethos (S. 2939).

The two bills look outwardly similar. Both would amend Title 31 of U.S. Code so as to require the Comptroller General to conduct an audit of the Board of Governors of the Federal Reserve System and the Federal reserve banks within the year and submitted their finding to Congress within 90 days of the audit’s completion.

But the bills have one small but crucial difference.

Under current law (31 USCA ยง714), the Comptroller General/Government Accountability Office is specifically restricted from auditing the Fed in four important areas:

(1) transactions for or with a foreign central bank, government of a foreign country, or non-private 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.

Sanders’ bill includes language that would strike these special audit protections for the Fed from the law. DeMint’s bill contains no such language and would keep the restrictions in place.

The Fed is already routinely audited at the same level that DeMint’s bill would allow. According to this PublicEye report, they have been audited over 100 times at this level in the past 30 years. You can find the audit reports on the Government Accountability Office’s website — here’s a recent GAO Fed audit report from May 2009 (.pdf) that found room for improvement in areas of information security. As far as I can tell, DeMint’s bill would literally maintain the status quo.

So, someone please tell me, what’s the point of DeMint introducing this completely toothless bill? Or am I missing something here…

NOTE: Post updated to reflect that DeMint is a co-sponsor of the Sanders bill.

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Comments

  • WinLiberty 01/26/2010 5:01pm

    I don’t know. A quick look at Paul’s campaignforliberty.com shows many Paul supporters love DeMint, and I saw no criticism there.
    I’ll have to give a look at what you are talking about. Thanks for the input.

  • Comm_reply
    donnyshaw 01/26/2010 7:18pm

    Yeah, I can’t find any other critical analyses of the bill either. I’m not surprised Paul supporters like DeMint generally. DeMint is definitely a libertarian-leaning Republican. But on this issue, I think they part ways.

    Read the bills… The Sanders bill strikes the section of U.S. Code that protects the Fed from meaningful audits. The DeMint bill keeps those restrictions in place.

  • Comm_reply
    WinLiberty 01/27/2010 5:31am

    I read it. A portion, 3(b), kinda has me stumped. I’ll have to do some digging so I can understand if this bill would require more accountability or stick to the status quo.
    I’ll start my digging by asking DeMint’s office for an explanation.
    If you are correct in your suspicions, it would be wise to question Caqmpaign for Liberty and Senator Sanders as to their views on the DeMint bill.

  • ryandsmith 01/27/2010 4:01am

    It seems like DeMint is scared to take a strong stance against the Fed. Maybe he fears political backlash. He is just not ready to be a true patriot.

  • WinLiberty 01/27/2010 4:24am

    I’m doing some work related to the FED bills..your article is helpful to me. Thanks for pointing this out. Oh crap, now I’m gonna have to go and actually read the DeMint thing…at least opencongress makes it easier than it used to be.

  • WesleyDenton 01/28/2010 11:33am

    Donny-

    Thanks for giving me the chance to update your readers. The bill you refer to, which was intended to be identical to the Sanders-DeMint bill (S.604), was placed on the Senate calendar so Senator DeMint could press for an up or down vote to audit the Fed. Unfortunately, the bill contained a drafting error which we are quickly working to correct. The correct bill language should appear online within the next day or two and will mirror S.604, which Senator DeMint strongly supports and will fight to be debated and voted on in the Senate.

    Thanks for your attention to the critical importance of full transparency at the Federal Reserve.

    -Wesley Denton, spokesman for Senator DeMint
    http://demint.senate.gov

  • Comm_reply
    WinLiberty 01/28/2010 5:56pm

    Thanks for the info Wesley. I’d earlier faxed over some questions but this answers them I think. Thanks also to donnyshaw.

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