Federal Inspector General Investigation proves Ron Paul’s claims “Bizarre”

{Updated annotation 05 April 2012: There is a cost to the “bizarre” accusations made by Rep. Dr. Ron Paul, MD (R-TX) during that Congressional hearing. As a direct result of his accusations, a 16-month long Inspector General investigation was conducted, which undoubtedly cost “we the people,” aka taxpayers, several millions of dollars.}

It’s one thing to say “the moon is made of green cheese.”

It’s an entirely different matter to say it and truly believe it.

In this case, Rep. Dr. Ron Paul, MD (R-TX), believes it.

God help him.

God help us all when kooks like him get elected to any public office.

I rather think this solitary example is proof positive that Rep. Dr. Ron Paul is unfit for office.

Following are various news items referencing the recently released findings.

Along with the news items about the findings is a link to Rep. Dr. Ron Paul’s, MD (R-TX) column hosted on the LewRockwell.com website. Lew Rockwell is another prime example of a kook, who, like Rep. Dr. Ron Paul (R-TX) subscribes to the theories of the “Austrian School of Economics” which – though it’s Mises Institute is headquartered in Auburn, Alabama – has no ties with the city or university located in that town.

{Note to the reader: Throughout this entry, there are numerous links to references and resources about the highlighted items. None of the links are advertising, and most all links refer to entries on Wikipedia, while some refer to original or referenced resources.}

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Excerpted from Marketplace, Morning Report, Wednesday, 04 April 2012 – “Fed money played no role in Watergate.“

Marketplace’s David Gura is here live from Washington to tell us about something a little juicier. Morning David.

David Gura: Morning Jeremy.

Hobson: So this item, I gather, comes from the Fed’s inspector general?

Gura: That’s right; so we’re learnign about the Fed’s history. First, we learned that the Federal Reserve was not involved in the Watergate burglary back in 1972; the cash used in the scandal did not come through the Federal Reserve. And second, there is no evidence the Fed helped Saddam Hussein, helped Iraq, get billions of dollars to buy weapons in the 80s.

Hobson: OK, all good to know — but why was the inspector general looking into this?

Gura: So, back in February of 2010, Ben Bernanke was testifying before the House Financial Services Committee. And Republican Congressman Ron Paul — one of the Fed’s biggest critics — made these two claims, about the Fed and Watergate, and about the Fed supposedly loaning money to Saddam Hussein.

And this is was Ben Bernanke’s reply, at the hearing back then:

Ben Bernanke: Congressman, these specific allegations you’ve made I think are absolutely bizarre and I have absolutely no knowledge of anything remotely like what you just described.

So at that hearing, Democratic Congressman Barney Frank — who was at that point the chair of that committee — asked for an investigation. So, the inspector general pores over documents and ultimately concludes in this report, Jeremy, there is no evidence of undue political interference with Federal Reserve officials in either of these cases. It’s just not true.

Hobson: Ben Bernanke probably breathing a sigh of relief this morning. Marketplace’s David Gura in Washington, thanks a lot.

Gura: Thank you.

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The full Inspector General‘s findings published in their Semi Annual Report to Congress, is available as a PDF download from the OIG website, here.

What is the Office of Inspector General?

The Office of Inspector General (OIG) was established by Congress as an independent oversight authority within the Board of Governors of the Federal Reserve System (Board), the government agency component of the broader Federal Reserve System. In addition, the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) established the OIG as the independent oversight authority for the Bureau of Consumer Financial Protection (Bureau). Within this framework, the OIG conducts audits, investigations, and other reviews of the Board’s and the Bureau’s program functions. By law, the OIG is not authorized to perform program functions.

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Here is an excerpt of the CSPAN video of Rep. Dr. Ron Paul’s (R-TX) questions in an official Congressional hearing, in which he makes those bizarre claims, about which  Chairman of the House Committee on Financial Services Rep. Barney Frank (D-MA) calls for an official investigation. The investigation has now concluded, and the news of findings are what this blog entry is about.

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{Note to the reader: Examining the webpage linked below to the LewRockwell.com site, it’s unclear whether the entry was written by Rep. Dr. Ron Paul (R-TX), or someone else.}

http://www.LewRockwell.com/paul/paul644.html

Ron Paul vs. Bizarre Ben Bernanke

by Ron Paul

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UPDATE 1-Fed not involved in Watergate, watchdog says

http://in.reuters.com/article/2012/04/03/federalreserve-watergate-idINL2E8F3AFX20120403

4:22am IST

* Long-time Fed critic Ron Paul sparked probe

* Government investigation lasted some 16 months

* More than 3,000 pages of testimony reviewed

By Dave Clarke and Margaret Chadbourn

WASHINGTON, April 3 (Reuters) – The Federal Reserve did not help the Watergate burglars get cash, stonewall congressional inquiries into the 1970s political scandal or help former Iraqi leader Saddam Hussein get a $5.5 billion loan to buy weapons in the 1980s, the agency’s inspector general said in a report posted on the Fed’s website on Tuesday.

The report is the result of a political tiff in 2010 that touched off a sizeable government investigation on topics seldom associated with the U.S. central bank.

The Federal Reserve has become a punching bag in the Republican presidential race because of its easy-money policies after the recent financial crisis.

Fed Chairman Ben Bernanke’s aggressive efforts to support the economy have further enraged long-time Fed critics such as Representative Ron Paul, who is seeking the Republican presidential nomination.

The watchdog report is based on charges Paul made at a congressional hearing in February 2010, in which he questioned whether the Fed has been used to funnel money to illicit causes, including the Watergate scandal that brought down the presidency of Richard Nixon and weapons purchases by Saddam Hussein.

Following the hearing, then-House Financial Services Committee Chairman Barney Frank asked the Fed to investigate what, if any, inappropriate role the central bank played in those areas.

The result was a roughly 16-month government investigation that involved extensive fieldwork.

“We did not find any evidence of undue political interference with Federal Reserve officials related to the 1972 Watergate burglary or Iraq weapons purchases during the 1980s,” the Fed’s inspector general told Fed Chairman Ben Bernanke in a letter dated March 30.

“Specifically, regarding the first Watergate allegation, we did not find any evidence of undue political interference with or improper actions by Federal Reserve officials related to the cash found on the Watergate burglars.”

The inspector general’s office operates independently of the Fed. It said in its report that the Fed’s general counsel reviewed the findings and “stated that our report confirmed past statements by Federal Reserve officials.”

EVIDENCE, INTERVIEWS

The federal watchdog reviewed more than 3,000 pages of transcribed testimony of congressional hearings that included accounts from 37 witnesses on the break-in at the Democratic National Committee’s offices located in Washington’s Watergate complex in 1972.

Boxes of Watergate-related documents, including memos, photographs, and summaries of the investigation were examined during the inspector general’s inquiry.

The staff involved in the report also visited the Gerald R. Ford Presidential Library and Museum in Ann Arbor, Michigan, to review the collection of then-Fed Chairman Arthur Burns.

The inspector general’s office wanted to show whether or not Burns tried to block investigations on the source of cash found on the burglars.

Employee interviews were also conducted at regional Federal Reserve Banks to better understand cash processing in the 1970s and to gather more information about the money found on the Watergate burglars.

To obtain more evidence regarding the Iraq allegation, the watchdog searched the Federal Reserve archives. While attempting to find any evidence of loans connecting the Fed and Hussein or Iraq during the 1980s, the inspector general consulted legal staff and reviewed supervision of foreign banks.

They also looked for evidence that would connect the central bank with any foreign institutions dealing in unauthorized loans that benefited Iraq, and obtained records to look for any unusual lending practices.

To address the allegations that Fed bank examiners in Atlanta failed to note $5.5 billion being funneled to Iraq from a local branch of an Italian bank, the inspector general’s office conducted numerous interviews among Fed officials and bank examiners.

The report “did not find any evidence of undue political interference with Federal Reserve officials” to indicate that the Fed help secure a $5.5 billion loan to Iraq for weapons.

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Testimony

Chairman Ben S. Bernanke
Federal Reserve’s exit strategy
Before the Committee on Financial Services, U.S. House of Representatives, Washington, D.C.
February 10, 2010

http://www.federalreserve.gov/newsevents/testimony/bernanke20100210a.htm

Download a PDF file of the testimony here.

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