Senate votes to audit the Fed, 96-0

By Reuters
Tuesday, May 11, 2010 12:34 EDT
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UPDATE: Senate voted down Ron Paul-approved Fed audit 37-62; passed bill does not audit monetary policy

UPDATE 2: Paul calls bill better than nothing, suggests Fed is ‘satisfied’ by outcome: ‘they think they’re getting off the hook’

The Senate on Tuesday approved a proposal to examine the Federal Reserve’s role in the Wall Street bailouts of 2008-2009 as part of a broad financial regulation reform bill.

The proposal from independent Senator Bernie Sanders would order congressional investigators to conduct a single audit of the U.S. central bank’s use of its emergency lending authority since December 2007. It would require the Fed by December 1 to disclose which banks received its help.

It passed by a vote of 96 to 0.

“Though the measure was always popular, it faced extraordinary opposition from the White House, Wall Street and the Fed itself,” Talking Points Memo’s Eric Lach noted Tuesday. “Late last week, in a move that defused the opposition, and may have saved Wall Street reform legislation, Sanders agreed to limit the scope of the audit to emergency lending only, exempting other Fed activities.

“That preserved the broad intent of the plan, which was always aimed at bringing the Fed’s shadowy activities during the financial crisis into the daylight,” Lach added. “Under the terms of the proposal, the Fed will also be required to make public which companies received upwards of $2 trillion in aide from the Fed, and under what terms.”

“Let’s be clear,” Sanders said in a statement after the vote. “When trillions of dollars of taxpayer money are being lent out to the largest financial institutions in this country, the American people have a right to know who received that money and what they did with it. We also need to know what possible conflicts of interest exist involving the heads of large financial institutions who sat in the room helping to make those decisions.”

“The Fed can no longer operate in virtual secrecy,” Sanders added.

The Senate was next expected to consider a more stringent measure, opposed by the Fed, that would subject the central bank to ongoing congressional audits.

With Raw Story reporting.

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