Diary

DeMint's Faux Fed Transparency Bill

Sen. Jim DeMint [R, SC] is one of the 31 co-sponsors of 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 §714), 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…

(Cross-posted from OpenCongress)