Restoring American Financial Stability Act of 2010

Floor Speech

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Mr. SANDERS. Mr. President, before I talk about financial reform, I did want to say a word about the disaster on the gulf coast now and the oil spillage there. Obviously, all of our hearts go out to the families of the 11 workers who lost their lives and to the thousands and thousands of employees in the region who are going to lose their jobs as this terrible contamination spreads all over the gulf coast.

But I hope very much we comprehend, in the midst of the disaster, that when we are dealing with technologies such as offshore drilling or, in fact, nuclear energy, we cannot be 99.99 percent successful. Unfortunately, as human beings, 100 percent success is a goal we often do not reach. That is why, in my view, as someone who has long opposed offshore drilling, I think it is absolutely imperative we understand as a nation if we move aggressively to energy efficiency, if we move aggressively to such clean, sustainable energies as wind, solar, biomass, and geothermal, we can, in fact, break our dependence on foreign oil and on fossil fuel in general, and we can create millions of jobs as we become energy independent without having to deal with the calamities we are experiencing today.

Mr. President, either tomorrow or shortly after--I hope tomorrow--I will be offering an amendment which deals with transparency at the Fed. I did want to say a few words about that.

At a time when many Americans are dispirited by the intensity of the partisanship which they see in Congress, this amendment, demanding transparency at the Federal Reserve, does something which is quite unusual. It brings together some of the most progressive Members of the U.S. Congress--and I consider myself in that fold--with some of the most conservative. It also brings together some of the strongest grassroots progressive organizations in the country with some of the most conservative. So what we are seeing in this amendment is a coming together of millions of Americans who have very different political ideologies but who agree it is absolutely imperative we bring transparency to the Fed.

This amendment is virtually identical to legislation I have offered on the subject that now has 33 cosponsors. In order to give an indication of the diversity of ideological position, let me read who they are. They are Senators Barrasso, Bennett, Boxer, Brownback, Burr, Cardin, Chambliss, Coburn, Cochran, Cornyn, Crapo, DeMint, Dorgan, Feingold, Graham, Grassley, Harkin, Hatch, Hutchison, Inhofe, Isakson, Landrieu, Leahy, Lincoln, McCain, Murkowski, Risch, Sanders, Thune, Vitter, Webb, Wicker, and Wyden. That is a very broad cross section of ideological opinion in the Senate.

In the House of Representatives, a similar process has taken place, and this concept has been cosponsored by 320 Members of Congress. That is a lot. That very rarely happens. That legislation was authored by Republican Congressman Ron Paul and Democratic Congressman Alan Grayson.

The amendment I will be bringing to the floor of the Senate has 15 cosponsors--Republicans and Democrats alike--and I very much appreciate their support. This amendment is simple and it is straightforward. At a time when the Federal Reserve has provided over $2 trillion in zero or near zero interest loans to some of the largest financial institutions in this country, this amendment requires the Fed to tell the American people who got the money. I do not think that is a very radical concept.

This amendment would simply do two things: No. 1, require the nonpartisan GAO, the Government Accountability Office, to conduct an independent and comprehensive audit of the Fed within 1 year; and, secondly, require the Federal Reserve to disclose the names of the financial institutions that received over $2 trillion in virtually zero interest loans since the start of this recession.

In terms of progressive grassroots organizations, this amendment enjoys the strong support of Americans for Financial Reform, a coalition of over 250--250--consumer, employee, investor, community, and civil rights groups, including the AFL-CIO, which represents millions of American workers, and the AARP, which is the largest senior group in this country representing tens of millions of seniors. So what we are looking at are grassroots organizations representing a huge part of our population that say it is time for transparency at the Fed.

There are also many conservative grassroots organizations that are supporting this amendment, including the Campaign for Liberty, the Rutherford Institute, the Eagle Forum, and many other groups.

This amendment is not a radical idea. As part of the budget resolution debate in April of 2009, the Senate voted overwhelmingly in support of this concept by a vote of 59 to 39. That is a strong sign that this Senate wants transparency.

In the House of Representatives, this concept passed the House Financial Services Committee by a vote of 43 to 28 and was incorporated into the House version of the Wall Street reform bill that was approved by the House last December. So a provision very similar to what I am offering is already in the House bill. So we are not talking about some kind of fringy idea. It has widespread support in the Senate. It is already, to a significant degree, incorporated into the House bill.

This concept has the support of the Speaker of the House, Nancy Pelosi, who has said Congress should ask the Fed to put this information ``on the
Internet like they've done with the recovery package and the budget.'' In other words, what she is saying is, if we look at the TARP bailout, we have all the information we want--from who received that money, how it was paid back, et cetera, et cetera--it is out there on the Internet of the Treasury Department. That is where it should be. We want to bring that same type of transparency to the Fed.

This concept, interestingly enough, has already been supported by two Federal courts--two Federal courts--that have ordered the Fed to release all of the names and details of the recipients of more than $2 trillion in Federal Reserve loans since the financial crisis started as a result of the Freedom of Information Act lawsuit filed by Bloomberg News.

The Fed has argued in court that it should not have to release this information, citing, according to Reuters, ``an exemption that it said lets federal agencies keep secret various trade secrets and commercial or financial information.''

However--this is important; this is not Bernie Sanders speaking, but this is a Federal court--the U.S. Appeals Court in New York disagreed with the Fed's assertion. Here is what a unanimous--underline ``unanimous''--three-judge appeals court panel wrote in their opinion. I quote them:

[T]o give the [Fed] power to deny disclosure because it thinks it best to do so would undermine the basic policy that disclosure, not secrecy, is the dominant objective. If the Board--

The Fed--

believes such an exemption would better serve the national interest it should ask Congress to amend the statute.

That is what a three-judge U.S. appeals court panel unanimously said. This appeals court decision upheld an earlier ruling by the Southern Federal District Court of New York that also ordered the Fed to release this information.

In other words, we now have 59 Senators, 320 Members of the House of Representatives, and 2 U.S. courts who have all told the Fed, in no uncertain terms: Give us transparency. Tell us what happened when you put at risk trillions of dollars of taxpayer money.

Based on the kind of grassroots support that exists in support of my amendment, I think the overwhelming majority of the American people want that transparency, and it is our job to give it to them.

I do understand this amendment will not be supported by every Member of the Senate. Some of them may come up and say: Well, it is not accurate, so I want to deal with this right now. They may state that this amendment would take away the independence of the Fed and put monetary policy into the hands of Congress. Every other day, there could be a great debate here about whether we raise interest rates and that we get involved in every detail of monetary policy. That is absolutely not what this amendment does, and the language in the amendment is very, very clear.

This amendment does not take away the court-appointed independence of the Fed, and it does not put monetary policy into the hands of Congress. This amendment does not tell the Fed when to cut short-term interest rates or when to raise them. It does not tell the Fed what banks to lend money to and what banks not to lend money to. It does not tell the Fed which foreign central banks they can do business with and which ones they cannot do business with. It does not impose any new regulations on the Fed, nor does it take any regulatory authority away from the Fed. In fact, the amendment prohibits Congress and the GAO from interfering with or dictating the monetary policy decisionmaking at the Fed. We are very clear about this in the amendment. This amendment simply requires the GAO to conduct an independent audit of the Fed and requires the Fed to release the names of the recipients of more than $2 trillion in taxpayer-backed assistance.

There is a lot more to say, and I look forward to saying it when the amendment gets to the floor. Let me conclude by saying this: I don't remember the exact date--perhaps a year or so ago--when, as a member of the Budget Committee, we were addressed by Ben Bernanke, the Chairman of the Fed. When he came before the committee, I asked Mr. Bernanke if he would release the names of the financial institutions that received trillions of dollars on near zero interest loans. He said he would not do that. On that day, I introduced the legislation which now has 33 cosponsors.

So I look forward to hopefully tomorrow bringing this amendment to the floor. I am proud of the kind of tripartisan support we have gotten. I am proud of the fact that we have people from every conceivable ideology who are fighting for transparency, and I hope we can win this amendment and let the American people get an understanding of who received trillions of dollars of their money during the bailout period.

Mr. President, with that, I yield the floor and note the absence of a quorum.

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