May 10, 2010
URGENT: Audit the Fed, Update and Opportunity
By James Wilson

Do you ever wonder what's going on behind closed doors on Capital Hill? We're about to give you a behind the scenes view . . .

Last week we told you, based on our best available information, that a Senate vote on the Audit the Fed amendment could come on May 4. It didn't happen.

Here's the background . . .

* An amendment requiring an audit of the Federal Reserve, co-sponsored by Rep. Ron Paul and Rep. Alan Grayson, was added to the House financial reform bill that passed late last year
* Sen. Bernie Sanders then introduced this amendment to the Senate's version of the financial reform bill

But Sanders recently came to believe that this amendment couldn't win the 60 votes needed to beat a filibuster, so he cut a deal for a new amendment with Banking Chairman Chris Dodd and the Obama Administration, both of whom want to protect the big banks and the Fed.

Under the Sanders compromise (unlike the original Paul-Grayson version), there will be . . .

* no audit of Fed activities prior to December 1, 2007, nor after the date the bill becomes law
* no audit of how the Fed sets interest rates

But there was something gained in the compromise. Under the Paul-Grayson version of the amendment the GAO (General Accounting Office) was prohibited from publishing the results of the audit, while the Federal Reserve was merely "permitted" to share the results. In other words . . .

Any negative audit results would likely have been shielded from public view. By contrast, the Sanders compromise amendment requires . . .

* The Fed to publish, by December 1st, a list of the institutions that received emergency assistance
* The GAO to publicly publish a full audit report on a date certain in late-2011
* A review and report about any conflicts of interest surrounding the Fed's emergency activities

In addition, the existence of the Sanders compromise amendment gives us two chances to win something out of this process . . .

FIRST CHANCE: Sen. Vitter has said that he will introduce an amendment with the original Paul-Grayson language. If this passes then we will have what we want, but if it fails then the Sanders deal with Chris Dodd will give us our . . .

SECOND CHANCE: The Sanders compromise is much better than nothing, and some kind of Fed audit amendment is needed if we want any audit at all to be included in the final version bill negotiated by the House-Senate conference committee. 

The worst-case scenario is that the Senate passes nothing. This would put us back to the starting line. This is why . . .

We need your immediate action!

The schedule is currently uncertain, but our best information indicates that the vote will likely happen tomorrow.

And so we ask you to send a letter telling your Senators to support the Vitter (Paul-Grayson) amendment, and ONLY IF that fails, to THEN support the Sanders compromise.

You can borrow from or copy this letter . . .

I understand that Senator Sanders negotiated a watered-down Audit the Fed amendment to the Senate's financial "reform" bill. With this in mind . . .

I strongly urge you to support Senator Vitter's amendment that will restore the Paul-Grayson language that appears in the House bill.

* The overwhelming majority of House members support a strong, comprehensive audit of the Fed
* As many as 69 Senators have, within the past year, indicated support for an audit along the lines of the Paul-Grayson amendment  
* The people deserve to know what the Fed has done, because it's the one government agency that most impacts our lives

I'm counting on my Senators to support Vitter's amendment. I will pay attention to your vote.

If other Senators do the wrong thing, so that the Vitter amendment fails, ONLY THEN will I consider it okay for my Senators to support the Sanders compromise.

Because the Paul-Grayson amendment passed the House, it's crucial that the Senate also pass a Fed Audit amendment so that some kind of Fed Audit appears in the final bill produced by the House-Senate conference committee. Vitter's amendment, which preserves the Paul-Grayson language, is stronger and you must support it first. ONLY support the Sanders compromise if the Vitter amendment fails.


If you wait, it could be too late, so please send your letter TODAY through's Audit the Fed campaign.

Thanks for taking action!

Jim Babka

P.S. We're aware that many have already been led to believe that Sanders "sold-out" on this legislation, and that his compromise version is completely useless. It's true that Sanders is most interested in the class warfare aspects of this issue, but we still think the Sanders' compromise could uncover important information. A lot of corporate welfare corruption -- "socializing the losses" -- has occurred since December, 2007! Your tax dollars were used to pay for the mistakes of others. To get an idea of just how badly your money may have been managed by the FED during the crisis, as well as get an example of the important things a Sanders-style audit could still uncover, please check out this YouTube video featuring Rep. Alan Grayson (D-FL), "Taxpayers, You own the Red Roof Inn."

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