FEDERAL RESERVE: FOIA AND AUDIT – Updated
FEDERAL RESERVE: FOIA AND AUDIT by ProLiberty for The Daily Coin
Conspiracy theorists have a history of sullying the good name of the Federal Reserve. They even attempt to get legislation passed in Congress so that an audit can be authorized. Their efforts have been unsuccessful. All annual audits of the Federal Reserve are done “by private-sector auditors”1 in accordance with restrictive guidelines established by the BOG which eliminate the auction accounts.
The Federal Reserve banks have claimed they are privately owned institutions and not subject to FOIA requests, and support the claim with two Federal court adjudications on other issues. Those court opinions specifically identify the holdings are restricted to the issues before the court.
FOIA requests directed to the Federal Reserve system are codified at 12 CFR 261. 12 CFR § 261.3 (a) identifies the Secretary of the Board of Governors as custodian of all Federal Reserve records. 12 CFR § 261.3 (c) directs service to the Secretary of the Board. Procedures for requesting records are detailed at 12 CFR § 261.12.(b) and (c). Bloomberg media received court support for their demand for FOIA access to Federal Reserve bank information:
“So long as records at the [Federal Reserve Banks] satisfy the plain language meaning of 12 C.F.R. § 261.2(i)(1), they qualify as agency records of the Board and are subject to FOIA requests. …[The CFR reads]: Records of the Board include . . . all information coming into the possession and under the control of the Board, any Board member, any Federal Reserve Bank, or any officer, employee, or agent of the Board or of any Federal Reserve Bank, in the performance of functions for or on behalf of the Board that constitute part of the Board’s official files; or [records] [t]hat are maintained for administrative reasons in the regular course of business in official files in any division or office of the Board or any Federal Reserve Bank in connection with the transaction of any official business..[provisions are to be broadly applied].The FRBs give all revenue in excess of expenses to the U.S. Treasury. 12 U.S.C. § 289.” Bloomberg L.P. v. Board. of Governors of Federal Reserve System, 649 F. Supp. 2d 262, 274++ (S.D.N.Y. 2009), aff’d, 601 F.3d 143 (2d Cir. 2010). emphasis added.
But what records would be of interest ? Well, it has been theorized that a considerable amount of funds from the Federal Reserve’s handling of government funds from auctions of Treasury securities disappears.2 The FRBNY, as fiscal agent of the U.S. government, has exclusive management of disbursement of the funds and any related function they wish to claim.3 The accounts currently handle over $10 trillion annually and no audit of the funds has been found.
TreasuryDirect identifies securities for redeeming market securities usually have an approximate 10% “new cash” allocation.4 That would appear to relate to deficit spending. Funds for redeeming securities are disbursed in large part to select Primary Dealers who collect designated securities—or who have the securities they hold identified for recall. PDs also bid on auctioned securities. Transfer of funds for redeeming securities from funds received by auction does not increase the currency in circulation (inflation) nor does it increase the National Debt.
If funds designated as ‘new cash’ went to the government, they would have to purchase securities. There is no known government account that receives the approximate $1 trillion annual funds. If the funds purchased securities, they would eliminate any increase in currency in circulation (inflation) and would not increase the national debt. This obviously does not occur. Where do the funds go ? It undoubtedly involves a scramble of CUSIP numbers5 and a commingling of government funds. The identified as loans and, in large part, have been paid back. Some pundits claim they were made to prevent an economic collapse; some say it was a postponement.6 If a commercial bank was doing it, it would be called fractional reserve lending without any reserve requirement; it is the key to rampant inflation.
It would appear that FOIA can be used to obtain the records maintained by the FRBNY as to the disbursement of ‘new cash’ funds and the consideration received for them from the identified recipients. The CRS report identifies the Fed establishes rules for audits.7 It is sometimes claimed the GAO is restricted in auditing the Fed by statute.8 Some pundits claim the central bank is owned by the Rothschild.9 Other pundits claim the BOG is a privately held corporation with shares owned by select Primary Dealers and others.10 Maybe FOIA can find out what is correct.
Failure to take any action has been prophesied to result in a Greek/ Argentina oppression and collapse of the U.S. society. The structure for such an action which would allow the Federal Reserve to transfer national assets to TBTF banks appears to be in place.11
1….Congressional Research Service Report 42079, Federal Reserve; Oversight and Disclosure Issues, March 27, 2017. The CRS report on the Federal Reserve states the GAO has conducted many audits of the Fed. At footnote 15, “audit” is identified to have a broad application in the report. It is used to confuse the reader. In fact, the GAO has conducted two REVIEWS of the FRBNY’s handling of security measures of Treasury auction procedures. No audit of FRBNY’s handling of United States’ funds, as fiscal agent for the government, from auctions of Treasury securities in accordance with standard accounting practices is known. The footnote clearly identifies “statutory restrictions” do not apply to audits by the GAO. Further, the Report appears to imply identification of recipients of FR funds is not subject to disclosure That misconception was laid to rest in the Bloomberg adjudication.
2 .. https://thedailycoin.org/2018/08/21/the-federal-reserve-a-different-view-updated/ ; https://ppjg.me/2019/11/18/the-federal-reserve-a-different-view/
3..31 CFR 375.3.
7….CRS report, id. “(T)he Fed’s rulemaking (sic) is not subject to executive review by the Office of Information and Regulatory Affairs…” p3. “DISCLAIMER; Information in a CRS Report should not be relied upon for purposes other than public understanding of information…” p16. In other words, it does not represent the law. Of special note is the report’s superficial mention of the Bloomberg adjudication at footnote 48. Ref. https://crsreports.congress.gov/product/pdf/R/R42079.
The Summary includes “GAO audit would not, under current law, release any confidential information identifying institutions that have borrowed from the Fed or the details of other transactions.” Also at p1. That is clearly not in agreement with the Bloomberg adjudication, nor with the reports’ declaration that statutory law is not a restriction on the GAO as evidenced in footnote 15: “Technically, existing statutory restrictions are relevant for GAO’s ability to conduct reports, not audits or investigations.”
The GAO may accept the accuracy of “Thus, a GAO audit would not result in the disclosure of any confidential information, such as who has borrowed from the Fed. “ (p5) if they wish to broaden the meaning of audit to include reports and investigations. It is certainly not a restriction on a private entity demanding FOIA access by 12 C.F.R. § 261.2(i)(1) as affirmed by the Bloomberg appeal.
8….31 U.S.C. §714(b). Such federal statute restrictions are not applicable when the GAO is considering their mission to “ensure the accountability of the federal government [money] for the benefit of the American people.” CRS report id, p3. Ref. Footnote 1 and 7.