Committee Guts Ron Paul's "Audit the Fed" Bill

Ron Paul's latest attempt to bring some kind of sanity to Washington has been dealt a serious blow by the House Financial Services Committee, which "gutted" his bill to audit the Federal Reserve.

HR 1207, the Federal Reserve Transparency Act of 2009, was introduced in February and has accumulated 311 co-sponsors. However, Rep. Paul (R-TX) maintains that several important elements of the bill have been removed by the committee during hearings on the bill held in September.

Paul says the changes have removed provisions that closed loopholes, such as the protection from audits of transactions with other nations' central banks. And he's pointing the finger at the chairman of the House Financial Services Committee's panel on domestic monetary policy, Rep. Mel Watt (D-NC).

And Watt (surprise, surprise) has gained more than a little bit from the banking and financial sector during his time in office. In 2008, when he won election for a ninth term, the largest percentage of his campaign contributions (35%, or $217,000) came from connections to financial, real estate, and insurance industries. According to OpenSecrets.org, Bank of America (headquartered in Charlotte, a part of Watt's district, which is one of the most gerrymandered in the country) was the largest single contributor to Watt's 2008 campaign.

On the plus side, Rep. Paul says he will try to restore the provisions that have been cut from the bill with an amendment when the bill reaches the floor. With all those co-sponsors, the bill should be easily passed, but the question remains about how effective the bill will be.