As the nation tries to repair the damage to its economy, the one proposed legislative remedy which would provide real financial transparency, HR 1207, a bill to Audit the Federal Reserve, has been gutted by Democratic Congressman Mel Watt.

Representative Ron Paul, the Texas Republican who has called for an end to the Federal Reserve, said legislation he introduced to audit monetary policy has been “gutted” while moving toward a possible vote in the Democratic-controlled House.

The bill, with 308 co-sponsors, has been stripped of provisions that would remove Fed exemptions from audits of transactions with foreign central banks, monetary policy deliberations, transactions made under the direction of the Federal Open Market Committee and communications between the Board, the reserve banks and staff, Paul said today…

Paul, a member of the House Financial Services Committee, said Mel Watt, a Democrat from North Carolina, has eliminated “just about everything” while preparing the legislation for formal consideration. Watt is chairman of the panel’s domestic monetary policy and technology subcommittee.

Watt has taken tens of thousands of dollars in campaign contributions from Federal Reserve primary dealers Citigroup, UBS, and Bank of America, the last of which is headquartered in his home district of Charlotte, North Carolina.

He has taken this political maneuver to enrich special interests despite the fact that the overwhelming majority of Americans and Congressman support having the central bank’s books opened.

Recent polls have shown that more than 75 percent of Americans support efforts to audit the Fed, something which my bill, HR 1207, the Federal Reserve Transparency Act, aims to do. HR 1207 has the support of 304 members of Congress, and the Senate version of the bill, S. 604, is supported by 31 U.S. senators.

Fed Chairman Ben Bernanke has embarked on an ambitious program of monetary expansion, more than doubling the monetary base to almost $1.9 trillion and doubling the size of its balance sheet to over $2 trillion, placing the American economy in a precarious position.

After shredding real reform, liberals are attempting to satisfy their thirst for power by ramming legislation to grow government through the House. This new measure which attempts to expand the central bank’s power is being sponsored by longtime Federal Reserve lackey Barney Frank, who chairs the Financial Services committee and receives political donations from a long list of fat-cat firms.

Using language that has got others into trouble before him, Timothy Geithner, US Treasury secretary, on Tuesday called financial regulatory reform “a just war” – words given substance by a legislative proposal unveiled the same day by Mr Geithner and Barney Frank, chairman of the House Financial Services Committee…

Instead of bringing accountability to the Federal Reserve, whose mismanagement and artificial suppression of interest rates caused the economy to collapse, Rep. Frank’s new law would expand the Fed’s power.

The landmark bill drawn up by the Treasury and the House financial services committee sets up a council of regulators charged with snuffing out systemic risks and gives the government and the Fed sweeping powers over financial companies at home and overseas.

Among those who gave Congressman Frank at least $10,000 during the last cycle are six elite New York Federal Reserve broker dealers including Bank of America, RBS, JPMorgan Chase, Goldman Sachs, Morgan Stanley, and Credit Suisse.

Frank’s approach is a standard one for political shills, who when faced with a problem caused by government attempt to blame it on others and grab more power.