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Annotated captions of Why We Need HR 1207, Ron Paul's Bill to Audit the Federal Reserve in English

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kramerdsp 00:00

Alan Grayson: Thank you very much, Mr. Chairman. Inspector Coleman, you’re the Inspector General for the Federal Reserve, right?

kramerdsp 00:07

Elizabeth A. Coleman: That’s correct.

kramerdsp 00:09

Alan Grayson: Okay. Have you done any investigation concerning the Federal Reserve’s role in deciding not to save Lehman Brothers,

kramerdsp 00:15

which led to shockwaves that went through the entire financial system?

kramerdsp 00:20

Elizabeth A. Coleman: In that particular area, you know, I don’t feel like to comment on specific investigations,

kramerdsp 00:27

but we do not currently have an investigation in that particular area.

kramerdsp 00:32

Alan Grayson: All right, what about the $1 trillion-plus expansion of the Federal Reserve’s balance sheet since last September?

kramerdsp 00:38

Have you conducted any investigations regarding that?

kramerdsp 00:41

Elizabeth A. Coleman: Well, right now, we have a… we call it a review and with the term investigation, we have different connotations.

kramerdsp 00:52

We’re actually conducting a fairly high-level review of the various lending facilities collectively, which would include, you know,

kramerdsp 01:00

the TOWS, the variety of the different programs that are in process, so we’re looking at them at a fairly high level to identify risks.

kramerdsp 01:09

Alan Grayson: Well, I understand that, but we’re talking about events that started unfolding eight months ago.

kramerdsp 01:13

Have you reached any conclusions about the Fed expanding its balance sheet by over a trillion dollars since last September?

kramerdsp 01:19

Elizabeth A. Coleman: We have not yet reached any conclusions.

kramerdsp 01:22

Alan Grayson: Do you know who received that money?

kramerdsp 01:24

Elizabeth A. Coleman: For the… we are in the process right now of doing our review and…

kramerdsp 01:32

Alan Grayson: Right, but you’re the Inspector General. My question specifically is

kramerdsp 01:37

do you know who received that $1 trillion-plus that the Fed extended and put on its balance sheet since last September.

kramerdsp 01:42

Do you know the identity of the recipients?

kramerdsp 01:45

Elizabeth A. Coleman: I do not know. We have not looked at that specific area at this particular point on those reviews.

kramerdsp 01:51

Alan Grayson: (AUDIBLE SIGH)

kramerdsp 01:54

Alan Grayson: What about Bloomberg’s report that there are trillions of dollars in off-balance sheet transactions that the Federal Reserve has entered into since last September?

kramerdsp 02:04

Are you familiar with those off-balance sheet transactions?

kramerdsp 02:08

Elizabeth A. Coleman: You know, I think it may be important at this point to, just to bring up a certain aspect related to our jurisdiction and just to clarify perhaps some of my earlier comments.

kramerdsp 02:21

We are the Inspector General for the Board of Governors and we have direct oversight over Board programs and operations

kramerdsp 02:31

and we’re also able to look at Board-delegated functions to the Reserve Banks, as well as the Board’s oversight and supervision of the Reserve Bank.

kramerdsp 02:41

We do not have jurisdiction to directly go out and audit Reserve Bank activities specifically.

kramerdsp 02:50

Nevertheless, in our lending facility projects, for example, we are looking at the Board’s oversight over the programs and to the extent that it extends out to the Federal Reserve Bank of New York.

kramerdsp 02:58

Alan Grayson: Well, I have a copy of the Inspector General Act here in front of me and it says among other things that if you’re responsible,

kramerdsp 03:03

you can conduct and supervise audits and investigations relating to the programs and operations of your agency.

kramerdsp 03:08

Elizabeth A. Coleman: That’s correct.

kramerdsp 03:10

Alan Grayson: So I’m asking you if your agency has in fact, according to Bloomberg, extended $9 trillion in credit,

kramerdsp 03:15

which by the way works out to $30,000 for every single men, women, and child in this country. I’d like to know if you’re not responsible for investigating that, who is?

kramerdsp 03:24

Elizabeth A. Coleman: We, actually… we have responsibility for the Federal Reserve’s programs and operations, to conduct audits and investigations in that area.

kramerdsp 03:36

In terms of who is responsible for investigating… would you mind repeating the question one more time?

kramerdsp 03:45

Alan Grayson: What have you done to investigate the off-balance sheet transactions conducted by the Federal Reserve, which according to Bloomberg now?

kramerdsp 03:58

Elizabeth A. Coleman: I’ll have to look specifically at that Bloomberg article. I’m not… I don’t know if I have actually seen that particular one.

kramerdsp 04:08

Alan Grayson: That’s not the point. The question is have you done any investigation or auditing of off-balance sheet transactions conducted by the Federal Reserve?

kramerdsp 04:15

Elizabeth A. Coleman: At this point, we’re conducting our lending facility project at a fairly high level

kramerdsp 04:20

and have not gotten to a specific level of detail to really be in a position to respond to your question.

kramerdsp 04:25

Alan Grayson: Have you conducted any investigation or auditing of the losses that the Federal Reserve has experienced on its lending since last September?

kramerdsp 04:35

Elizabeth A. Coleman: We are still in the process of conducting that review. Until we actually, you know, go out and gather the information, I’m not in a position to really respond to this specific question.

kramerdsp 04:46

Alan Grayson: So are you telling me that nobody at the Federal Reserve is keeping track on a regular basis of the losses that it incurs on what is now a $2 trillion portfolio?

kramerdsp 04:56

Elizabeth A. Coleman: I don’t know if… you’re telling me that there’s… you’re… missing… that there are losses.

kramerdsp 05:04

I’m just saying that we’re not… until we actually look at the program and have the information, we are not in a position to say whether there are losses or to respond in any other way to that question.

kramerdsp 05:14

Alan Grayson: Mr. Chairman, my time is up, but I have to tell you honestly, I am shocked to find out that nobody at the Federal Reserve including the Inspector General is keeping track of this.

kramerdsp 05:23

Mr. Chairman: All right. Thank you, gentleman and…