Barney Frank Once Again Sides With Bernanke, Announces Proposed Fed Audit Will Be Materially Curbed

Tyler Durden's picture

Barney Frank has released the House "offer" language on various issues to be discussed tomorrow during the House-Senate Conference Committee, which will convene at 11am in Rayburn Room 2128.  While some of the items on the docket relating to Investor Protection and Executive Compensation, are largely irrelevant, Barney will also discuss such critical issues as the Fed Audit, the Fed's emergency lending power, and Foreign FX swaps. Ignoring that 80% of the S population demand an end to fed secrecy, the just released proposed language also appears to peddle exclusively to Bernanke and his Wall Street superiors, in that items under debate for the audit will not include monetary policy, and  it will be America's sad fate to extinguish under a 0% interest rate, never knowing how such lunacy can have come to be, until such time as the banking system blows itself up once again. This way the American public will never know whether someone like Goldman Sachs (in addition to Jerome Kerviel) has had any influence in determining monetary policy.

Full language of the completely uncorrupt Congressman's proposal as it relates to the Fed audit:

Title 11 of base text: Fed audit and governance, and emergency liquidity provisions

The House proposes the following amendments to the Base text:

•    Amend Senate provision regarding Federal Reserve 13(3) lending to insert requirement from House-passed bill that the Federal Reserve Board and Secretary of Treasury have reasonable cause to believe that the security or other collateral policies for any emergency lending program or facility provide 99% confidence that funds disbursed under the facility or program and interest will be repaid. (Senate bill §1101, Page 1724, lines 16-19).

•    Amend Senate Provision regarding ongoing Federal Reserve audit requirements to add discount window and open market transactions to items to be reviewed by GAO.   (Senate bill § 1102, Page 1730 line 7 –  Page 1733, line 23).

•    Amend Senate Provisions requiring public disclosure of emergency credit facilities information to also require public disclosure of Federal Reserve open market operations and discount window transactions three years after the transactions have been entered into. (Senate bill § 1103, Page 1735, after line 17).

•    Strike Senate provisions regarding emergency liquidity guaranties and replace with House provisions on emergency liquidity guaranties.  (Replace Senate bill §§ 1104-1106, Page 1735, line 18 – Page 1751, line 7, with House bill §§§ 1109-1111).

•    Strike Senate Provision on appointment of Federal Reserve Bank of New York President and limiting eligibility to vote for or serve as a Federal Reserve Bank director, and replace with provision removing the authority of the member banks’ representatives on each regional board of directors (Class A directors) from appointing/voting for the President of the Reserve Bank (Senate bill § 1107, Page1751, line 20 – 1752, line 6).

•    Add House Provision on no financial stability authority in the bill being delegated to Federal Reserve Bank Presidents to Senate Provision on no delegation of supervisory policymaking to reserve banks.  (House bill § 1114, Page 132, line 3-14; Senate bill § 1108, Page 1754, line 17).

•    Add House Provision adding new restrictions to the Federal Reserve’s foreign currency swap authority (House Bill, §1702, Page 517, line 1-15). 

Full proposed "offer" language.

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Ripped Chunk's picture

Does anyone know when this bag of shit is up for re-election?

pan-the-ist's picture

Congress Critters are up every two years.  He's trying to get rid of consumer protection too.

The Rock's picture

...and critters are up his ass every two hours...

Ripped Chunk's picture

When you are in Las Vegas on Groundhog Day, how do you know if there will be 6 more weeks of winter or if spring has arrived?

jmc8888's picture

Rachel Brown, a LaRouche Democrat is going against him. 

Yep, and she made him look as ridiculous as Barney the Dinosaur.

jmc8888's picture

I don't know how Barney Frank thinks he can get away with it.  But then again Scott Brown is a corporate whore too, so what if he's the tea parties answer....Brown and Frank sleep in the same bed together....with Mass. big banks.

neophyte's picture

RC, I share your sentiment. But does it really matter. The damage is being done..NOW!!

Ripped Chunk's picture

The damage is ongoing but most of it is in the past. You can't change the past. You can only try to alter the future.

Canoe Driver's picture

Wouldn't it provide for more useful discourse if we simply accept that the U.S. is a society operated by and for the benefit of criminals?

LMAO's picture

erm, yeah!


As long as the "infuriated" US citizens confine themselves to expressing their disgust in speech and writing only, nothing and absolutely diddly-squat will happen. This is a sign of complacency to the brass and their Wall Street cronies therefor, business as usual. As long as they are not seriously intimidated by the public their reign of terror will continue.

Tea anyone?



Muir's picture

I need ya, Decks. This is a bad one, the worst yet. I need the old blade runner, I need your magic.

Cursive's picture

I would say let's shove a red hot poker up this SOB's ass, but my understanding is that he enjoys that kind of thing.  Massachusetts, we're looking at you.

buzzsaw99's picture

Who cares what that fag does?


Ragnarok's picture

Don't forget pot grower and brothel manager.

Ripped Chunk's picture

Well he is from Massataxes you know (Oh I meant Massachusetts)

carbonmutant's picture

Don't be dissin' Pot Growers...

Noah Vail's picture

No problem, as of 1Q2010 combined federal and state spending (borrowing) constitutes 39% of GDP. Soon we won't have to worry about the private sector anymore. There won't be one.

Forget this risky investing shit, get a government job and steal all you want, risk-free.

Alcoholic Native American's picture

No shit, Whats the point of auditing the FED again?  They got an unlimited budget.

Wynn's picture

Remember when Ron Paul's original bill gathered all those co-signers, and Bwarney was assuring everyone that it would be included in the Financial reform bill?

Lying sack of shit




Ripped Chunk's picture

Its just politics.


How about the Democratic Congessman from NC!!!??? Bob Etheridge!!!!!




Wynn's picture

Have you seen the Dem candidate for Senate from S. Carolina (Green)?

Jon Stewart did a bit on him, funny funny shiit


Actually, 100 Green's would be better than what we have now.

Ripped Chunk's picture

The whole Green thing demonstrates that the entire system is broken and not repairable.

That said, I think he is a great candidate. I would love to see him debate Michelle Bachman and the debate break down into a porn fesitival with Green and his whole family putting it to Michelle.

But I'm not right.

almost_have_a_name's picture

He studders when he lies.....

taraxias's picture

I really hope that one of these days someone shoves their dick far enough down Barney's throat to choke him off.

Steaming_Wookie_Doo's picture

Paging Ron Jeremy, paging Harry Reams...oh wait, he'd probably be into Jeff Stryker.

tahoebumsmith's picture

He is nothing but a lying sack , just like the rest of the cronies in Washington! One thing is for sure, if his lips are moving you no he's lying.


svendthrift's picture

Sanders and Fank knee-cap Paul to help hide the crimes of Greenspan and Bernanke. Mmhm.

Milestones's picture


The Trials and Tribulations of the Federal Reserve Act of 1913


There has been, over the last several months that I have been reading ZH, issues raised concerning the Federal Reserve and The Federal Reserve Act of 1913. The almost unanimous opinion of the readers here as well as those blogs were the topic has come up such as Market Ticker, Jesse’s Café Americain, Naked Capitalism, Mish and others too numerous to mention all decry the “FED” and their propensity for large scale plundering of our economy among other peccadillos’ .

I would contend that after reviewing the circumstances of the FED, its origins and its daily operations, the FED is not only illegal and unconstitutional; that it is also void by law, and has been since its inception in 1913.

I will interject here and now, I am not an attorney. Hopefully the arguments I will lay out below will bring up the issue to be judged by what appears to be one of the most knowledgeable, well-educated and outspoken group on the web. I post below for your consideration, comments and rebuttal.

The Federal Reserve Act was passed by Congress in the last days of December by a handful of Senators who had not left for Christmas break.  The House had passed the bill earlier. President Wilson then signed it into law.

The concerns of those who oppose the FED generally center on Article I Section 8 (5) (18).That particular part of the U.S. Constitution reads in part: Article I Section 8 (5) says (Section 8)” Powers of Congress. The Congress shall have power: (5) To coin money, regulate the value thereof, and of foreign coin—“.

Herein lay my problem and question. The Constitution says “Congress shall have power—to regulate the value thereof.” That is what the Constitution says. Congress shall have the power to do. Oh, -I forgot, Congress apparently delegated that authority to the new kid on the block; the FED.

That delegation of power to the FED is my question. Did Congress have the authority to do so under the U.S. Constitution? So let us go to rulings by the Supreme Court to see what they had to say about this issue of delegation of authority.

Panama Refining Co. v Ryan 293 U.S. 388  1935

“The Constitution provides that 'All legislative Powers herein granted shall be vested in a Congress of the United States, which shall consist of a Senate and House of Representatives.' Article 1, 1. And the Congress is empowered “To make all Laws which shall be necessary and proper for carrying into Execution' its general powers.” Article 1, 8, par. 18. The Congress manifestly is not permitted to abdicate or to transfer to others the essential legislative functions with which it is thus vested. Undoubtedly legislation must often be adapted to complex conditions involving a host of details with which the national Legislature cannot deal directly. The Constitution has never been regarded as denying to the Congress the necessary resources of flexibility and practicality, which will enable it to perform its function in laying down policies and establishing standards, while leaving to selected instrumentalities the making of subordinate rules within prescribed limits and the determination of facts to which the policy as declared by the Legislature is to apply. Without capacity to give authorizations of that sort we should have the anomaly of a legislative power which in many circumstances calling for its exertion would be but a futility. But the constant recognition of the necessity and validity of such provisions and the wide range of administrative authority which has been developed by means of them cannot be allowed to obscure the limitations of the authority to delegate, if our constitutional system is to be maintained.”


The Court observed that 'it was impracticable for Congress to provide general regulations for these various and varying details of management,' and that, in authorizing the Secretary of Agriculture to meet local conditions, Congress 'was merely conferring administrative functions upon an agent, and not delegating to him legislative power.'

Thus, in every case in which the question has been raised, the Court has recognized that there are limits of delegation which there is no constitutional authority to transcend. We think that section 9(c) goes beyond those limits. As to the transportation of oil production in excess of state permission, the Congress has declared no policy, has established no standard, has laid down no rule. There is no requirement, no definition of circumstances and conditions in which the transportation is to be allowed or prohibited.

If section 9(c) were held valid, it would be idle to pretend that anything would be left of limitations upon the power of the Congress to delegate its lawmaking function. The reasoning of the many decisions we have reviewed would be made vacuous and their distinctions nugatory. Instead of performing its lawmaking function, the Congress could at will and as to such subjects as it chooses transfer that function to the President or other officer or to an administrative body. The question is not of the intrinsic importance of the particular statute before us, but of the constitutional processes of legislation which are an essential part of our system of government

FIELD V CLARK 143 US 649 1892

 “That congress cannot delegate legislative power to the president is a principle universally recognized as vital to the integrity and maintenance of the system of government ordained by the constitution.

: 'The legislature cannot delegate its power to make a law, but it can make a law to delegate a power to determine some fact or state of things upon which the law makes, or intends to make, its own action depend. To deny this would be to stop the wheels of government. There are many things upon which wise and useful legislation must depend which cannot be known to the law-making power, and must therefore be a subject of inquiry and determination outside of the halls of legislation.'

That no part of this legislative power can be delegated by congress to any other department of the government, executive or judicial, is an axiom in constitutional law, and is universally recognized as a principle essential to the integrity and maintenance of the system of government ordained by the constitution. The legislative power must remain in the organ where it is lodged by that instrument.”

Well now, it appears by the language of the above two cited Supreme Court decisions, i.e.: Panama of 1935 and Field of 1892, the Federal Reserve Act is bracketed by 2 separate decisions by the Supremes; one prior to the Fed act of 1913 and one after; that the court has said that Congress does not have the authority to delegate the power “to regulate the value thereof” as that power is directly mentioned in the Federal Constitution as being granted to Congress.

Please bear with me. Sovereignty is granted to “We the people” as outlined in the first 3 words of the Preamble. As such, under the Constitution, we delegate our sovereign authority to persons to represent us in dealing with the events that govern us from day to day. But it is the reserve of the sovereign’s to delegate authority, not Congress; they only represent us; but it does not carry with it the authority to yet further delegate congressional power-that is our power as sovereigns to bind this nation in such a manner.

John Locke came to the same conclusion: (Parliament, Congress)—“Cannot transfer power of making laws to any other hands for it is being but a delegated power from the people who have it and cannot pass it over to others.”

I would contend that the Federal Reserve Act of 1913 is illegal under the Constitution. Further if we consider Marbury v Madison of 1803, a decision which to my knowledge has never been legally overturned, states the case in even far starker terms:

Marbury v Madison 17 Wall 205 Cranch 2  1803

“Thus the particular phraseology of the Constitution of the United States confirms and strengthens the principal, supposedly to be essential to all written constitutions, that a law repugnant to the constitution is void; and the courts, as well as other departments, are bound by that instrument.” Marbury v Madison  17 Wall 205 Cranch 1,2,3,4, Book 2

So now, if we follow he train to the end of the line, not only does the Federal Reserve Act of 1913 appear to be unconstitutional due to Congress’s illegal delegation of power concerning “The regulating the value thereof” part of  Art. 1 Section 5 and 18; one is drawn to the conclusion that the Federal Reserve Act is void under Marbury. Congress acted illegally and contrary to the constitution by delegating its authority but President Wilson also acted illegally in signing said act into law.—“as well as other departments are bound by that instrument.”

: Black’s Law Dictionary

Manifest—Evident to the senses, especially to the sight, obvious to the understanding, evident to the mind, not obscure or hidden, and is synonymous with open, clear, visible, unmistakable, indubitable, indisputable, evident and self evident. In evidence, that which is clear and needs no proof; that which is notorious.

Void—Null; ineffectual; nugatory; having no legal force or binding effect; unable in law, to support the purpose for which it was intended. An instrument or transaction which is wholly ineffective, inoperative and incapable of ratification and which thus has no force or effect so that nothing can cure it.

In short, I contend Congress was and is prohibited by the Constitution from delegating any of its authority that is vested to it in the Constitution as shown in the 2 cases cited,i.e. Panama and Field and that that action was repugnant to that instrument and is Void under Marbury. There are undoubtly many, many laws that are currently on the books that would fall into this category. 

Because the Supremes have already addressed such acts as outlined above, I question how they could rule against what they have already done. I would think the government could simply fire up the presses, make changes to the currency as did JFK in 1962 when he used red ink on $5 bills and simply deal out the Fed. (This contemplates of course eliminating Tiny Tim and BB).

 I am well aware this sounds rather simplistic, but if the FED is seized lock, stock and barrel and folded into the Treasury there will of course issues to be resolved but I really can’t see them as being life threatening. Congress could try and reinstate the Act but would almost certainly face 1890’s wild west  justice rapidly; like while they are all still in D.isneyland C.entral.

I am not so naiveté as to believe TPTB are going to roll over if my argument is correct. It will be ignored, and laughed at later if ignoring it fails. But Joe Sixpack is growing more and more aware that somehow the FED is the central problem in the financial mess this country finds itself. The connection must be made in the public mind that this 1920’s Al Capone Chicago style Mafia lives again posing as upstanding bankers who are in fact monstrous crooks who are in direct violation, not of the law, but of the U.S. CONSTITUTION and the banking industry are not just “greedy” people but a Mafia criminal element threatening this nation and its well being. A proper coat of paint would go a long way to identify to the general public who and what these criminals are about.

And now the caveats: this is my first post. This issue has been sticking in my craw for some time now and ZH appears to be the best forum to outline my thoughts. It’s not the only one. Corporations as people, which Thom Hartmann has gone over in his book, Unequal Protection, is another saddle on the American public that has bothered me for some time. I hope to address that issue sometime in the near future.

 Further I am not an attorney as mentioned earlier and I do not know how to use the internet to Shepardize the 2 mentioned cases. I know there are attorneys on this site and any comments, critiques or help on this would be greatly appreciated.

 Getting bent over a barrel is never fun but that’s how the game has to be played if you want to know if you have something or you’re as full of shit as a Christmas goose. Let the games begin.

Regards, Milestones



Cursive's picture

Well, I guess you could bring a suit against them, but I seriously doubt that the federal courts, who are part and parcel of the Leviation, will see it that way.  Look, social security is unconstituional, but you don't see any courts striking it down, do you?  Don't worry, the massive impending economic depression will take care of social security and the FED.  The the drama will start over again....

Steaming_Wookie_Doo's picture

Yeah, it may be true, but there are quite a few cases that judges suddenly become deaf to...welcome to The Matrix. At least your mind is free.

LeBalance's picture

All of that case law was pre-1937.  After that year everything changed.  The architecture for receivership was completed and lawyers were no more.  Now only attorneys walk the land.  Attorn (verb) :: to return coin to the crown.  No Attorney is a citizen of the US, they are foreign agents.  So your entire proposal is interesting, but moot.

Implicit simplicit's picture

Thanks for your due dilligence. You've done your homework. I am not an attorney either, but I imagine that the old in the name of "national security" would supercede any challenge to abolish the fed in court. The goverment can basically use that anytime they want to get around the law.

sumo's picture

I'm not a lawyer either.

It seems to me your central question is, has the Congress delegated legislative power, and not merely powers of some other kind, to the Federal Reserve.

StychoKiller's picture

The answer to that question is unfortunately YES.  Witness the hundreds of alphabet agencies making rules/regulations that citizens/businesses must comply with as if they were Law!

Mongo's picture

Does Barney Frank have brain damage or is he just a slow learner?

carbonmutant's picture

 The question may be assuming facts not in evidence...

Implicit simplicit's picture

He has a bad lisp because he thinks he always has someting in his mouth even when he doesn't. He takes it up the ass so much that it drives the shit right out of his mouth. I say this not because he is a homsapien, but because he is bought and paid for by Freddie and Fannie.

seventree's picture

What! He's also a homo sapiens? This is just too much.

Pinefox's picture

Could the ZeroHedge store produce some "AUDIT THE FED"  bumper stickers?  I would plaster one on my car and every telephone pole in the area.   Recently saw a car that had a sign "Banks are Evil" stuck in the back window in Seattle Wa. 

SilverIsKing's picture

Not "Audit the Fed" but "End the Fed" with a URL to a website that will explain what damage the Fed has done and why they don't need to exist.

"Audit the Fed" only serves to legitimacize them.

Ending that corrupt institution is the goal but the masses need to be educated about their origin, evolution, and continuous ponzi put upon the American people.

tahoebumsmith's picture

I'm not a bigot or a racist and i'm not looking for an answer in that direction. With that said, can anybody explain why every single FED Chairman has been Jewish since it was created in 1913? 

SilverIsKing's picture

Why does every President have two balls?  Can't they find one with only one ball or better yet, get one with three balls.

Implicit simplicit's picture

Bernie's pal Barney has no balls; does that count?

Brett in Manhattan's picture

Makes good cover for the WASPs who really run things.

snakeboat's picture

BF is an Ass with a Hole.  and that's all I'm going to say about that.

buzzsaw99's picture

Frank had an asshole transplant last year but it didn't take. The asshole rejected him.