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LEFT-RIGHT COALITION CALLS FOR AN AUDIT OF THE FEDERAL RESERVE BEFORE BERNANKE IS REAPPOINTED AS CHAIR

Senate Banking Committee to Hold Bernanke Nomination Hearings Thursday; Issues Raised By Letter Prompt Sen. Sanders To Place Hold On Nomination

WASHINGTON – Leaders on opposite sides of the political spectrum joined forces today on a letter to the Senate demanding that Congress mandate an audit of the Federal Reserve Bank before voting to reappoint Federal Reserve Chairman Ben Bernanke for a second term. Although the groups may not agree on all the elements of financial reform, they do agree that the Federal Reserve should be held accountable to taxpayers.

The left-right coalition sent a letter to members of the Senate today includes Campaign for America’s Future co-director Robert Borosage, Americans for Taxpayer Reform president Grover Norquist, FireDogLake blogger Jane Hamsher, Eagle Forum president Phyllis Schlafly Campaign for Liberty president John Tate and Center for Economic and Policy Research president Dean Baker.

The letter coincides with the announcement that Sen. Bernie Sanders, I-Vt., is placing a hold on the Bernanke nomination for the reasons cited in the joint letter.

The Federal Reserve took extraordinary actions in the financial crisis, committing trillions of dollars to bolster private institutions, and the letter says that these actions must be reviewed before any decision is made on Bernanke’s nomination. Bernanke has opposed a detailed review and has not answered questions from Congress about the trillions of taxpayer dollars the Federal Reserve lent to banks and other private companies.

Bernanke and his supporters have argued that auditing the Federal Reserve would constitute a takeover of monetary policy, but signers of the letter believe this is disingenuous. What is at issue is not monetary policy, but an unprecedented assertion of fiscal authority.

The complete letter follows:

December 3, 2009

Dear Members of the U.S. Senate:

In the last two years, the Federal Reserve Board has lent several trillion dollars to banks and other private companies, financial and non-financial institutions through a series of special lending facilities. The total amount of loans made through facilities exceeds the annual budget of the United States. In addition, it guaranteed trillions of dollars of various assets and also made hundreds of billions of dollars available to several foreign central banks through currency swap arrangements.

At this point, neither the public nor members of Congress has any information about who benefited from these loans, guarantees, and swap arrangements. There is no information available on the specific terms of the loans – the interest rate charged, the collateral posted, and whether or not they were repaid. There is no information available on how it was decided who would qualify for the Fed’s help and who would be denied assistance.

Almost three quarters of the members of the House of Representatives have co-sponsored a bill calling for an audit of the Federal Reserve Board. This audit will allow Congress to assess how the Fed, under the leadership of its chairman Ben Bernanke, performed in this crisis and whether it acted appropriately in its disbursement of an enormous amount of money and guarantees.

Without this audit, Congress lacks the information it needs to evaluate Mr. Bernanke’s performance. Therefore the Senate should delay action on Mr. Bernanke’s reappointment until an audit of the Fed’s books takes place, the results are made available to the Congress and Mr. Bernanke answers a serious inquiry into the actions he took.

Sincerely,

Ryan Alexander, president, Taxpayers for Common Sense

Chris Bowers, founder, OpenLeft

Dean Baker, co-director, Center for Economic and Policy Research

Robert Borosage, co-director, Campaign for America’s Future

Danielle Brian, executive director, Project On Government Oversight

Mark Calabria, director of financial regulation studies, Cato Institute

Mark Cohen, executive director, Government Accountability Project

Tom DeWeese, president, American Policy Center

Tyler Durden, founder, Zero Hedge

Sandra Fabry, executive director, Center for Fiscal Accountability

James Kenneth Galbraith, economist

Adam Green, co-founder, Progressive Change Campaign Committee

George Goehl, executive director, National People’s Action

Jane Hamsher, founder, FireDogLake

Gary Kalman, Washington director, Public Interest Research Group

Matt Kibbe, president, FreedomWorks

Grover Norquist, president, Americans for Tax Reform

Duane Parde, president, National Taxpayers Union

Aaron Swartz, co-founder, Progressive Change Campaign Committee

Phyllis Schlafly, president, Eagle Forum

John Tate, president, Campaign for Liberty

John Taylor, CEO, National Community Reinvestment Coalition

Stephanie Taylor, co-founder, Progressive Change Campaign Committee

Robert Weissman, president, Public Citizen

John Whitehead, president, The Rutherford Institute