These days, it is difficult to find issues on which there is bipartisan agreement - especially with regard to congress. Difficult, but not impossible. One such issue concerns the Federal Reserve. There is a bill that is going to be re-introduced this year in congress called The Federal Reserve Transparency Act, also known as “Audit the Fed”.

The bill has already been passed twice in the House of Representatives. In 2012, as reported in the Huffington Post, “In a rare moment of bipartisanship, the House overwhelmingly passed a bill…to audit the Federal Reserve”. It had 270 co-sponsors and passed 327-98 with 89 Democrats voting in favor. It passed again in 2014 by an even wider margin, 333-92, this time with 106 Democrats voting in favor. Both times it was blocked in the Senate because then Majority Leader Harry Reid (D-NV) refused to allow it to come up for a vote.

This time might be different as Reid is no longer Senate Majority Leader. His replacement, Mitch McConnell (R-KY) has indicated that he will allow the bill to come to the floor for a vote. It already has 89 co-sponsors including several Democrats - so far.

The bill was originally proposed by former congressman Ron Paul (R-TX) in 2009. According to Wikipedia, it reforms the way audits are conducted by the US Comptroller General. It eliminates exceptions to the current audit protocol replacing an “indefinite deadline” with a one year deadline. Says Wikipedia, “It also ensures the audit results are available to Congress. The audit would include the Fed’s ‘discount window’, its funding facilities, its open market operations, and its agreements with foreign bankers”.

Much of what the Fed does with regard to its operations is done in secret and the so called discount window is where “eligible” banks go for short term financing when they get into trouble - in other words, when they need to be bailed out. During the banking crisis the Fed opened up the discount window to troubled banks and other entities that normally wouldn’t be “eligible”. However, no one would have known the extent of the bail outs if not for Bloomberg financial journalist Mark Pittman. According to Bloomberg, on May 21, 2008, Pittman “filed a Freedom of Information Act (FOIA) request with the Fed seeking documents showing which banks had borrowed money under the emergency lending programs, including the 98 year old discount window”. The Fed denied the request.

According to an article in Bloomberg co-written by Pittman in May of 2009, “The New York Fed is one of 12 regional Federal Reserve banks and the one charged with monitoring capital markets. It is also managing $1.7 trillion of emergency lending programs. While the Fed’s Washington-based Board of Governors is a federal agency subject to the Freedom of Information Act and other government rules, the New York Fed and other regional banks maintain they are separate institutions, owned by their member banks, and not subject to federal restrictions”.

The Fed is apparently a very complicated entity. The Washington Fed is a government agency, while the regional Fed banks, including the NY Fed are privately owned. That’s right, privately owned. As such, the NY Fed believes that it is not subject to FOIA requests. That begs the question, if it is a private bank, why is it “charged with monitoring capital markets”? Further, nowhere have I been able to find a shareholder list of this private bank. To my mind, not only should there be an audit, the audit should include identifying who the shareholders are. While we don’t know who owns it, there are, however, records of present and past directors. They include Jeffery Immelt, CEO of General Electric and Jamie Dimon, CEO of JP Morgan Chase, both former directors. Former CEO of Goldman Sachs Stephen Friedman has served as its Chairman. Current Chairman William Dudley has also worked at Goldman Sachs.

Mark Pittman passed away in November of 2009 at the age of 52, but Bloomberg News pursued his FOIA request through the courts. After winning the initial court battle, Bloomberg had to eventually take the matter all the way to the Supreme Court to finally force the Fed to release the documents. When released they caused quite a stir.

Bloomberg published an article in November of 2011 with the headline “Report: Fed Committed 7.77 Trillion to Rescue Banks”. That staggering amount of money was a shocker. Further articles revealed that the Fed had provided loans to the Bank of China and “a company part-owned by the Central Bank of Libya”, among others. Again according to Bloomberg, “The biggest borrowers from the…discount window as the program reached its crisis-era peak were foreign banks”. Sounds like the Fed was conducting foreign policy without oversight from congress.

Here’s what progressive economist Robert Reich, who I have written about previously, had to say about Fed actions with regard to the Bear Stearns bailout: “First, only Congress is supposed to risk taxpayer dollars. The Fed is not part of the legislative branch. Its secret deals, announced almost two years after they were done, violate the democratic process, if not the Constitution itself. Thomas Jefferson put a stop to Alexander Hamilton’s idea of a powerful central bank out of fear it would be unaccountable to the public. The Fed has just proven Jefferson’s point”. Robert Reich goes tea party. Wow. He goes on to say, “The Fed has a big problem. It acts in secret. That makes it an odd duck in a democracy”. Or a Republic.

According to a Rasmussen poll published in November of 2013, 74% of all Americans “favor a public audit of the Federal Reserve”, little changed from the 75% registered in a similar poll Rasmussen conducted in 2009. Quoted in Bloomberg, regarding the bank bailouts, liberal Senator Sherrod Brown said, “This is an issue that can unite the Tea Party and Occupy Wall Street”. And everyone in between.

The Federal Reserve is the only entity in the world that is authorized to create and issue US Dollars, the world’s reserve currency. As such, the Fed is arguably the most powerful entity in the world. That being the case, I think it might be prudent to audit everything it does.