Courtesy of Pam Martens
Photo of the Trading Floor at the New York Fed (Obtained by Wall Street On Parade from a Fed Educational Video)
In 2006 the Federal Reserve’s books were audited by PricewaterhouseCoopers. But beginning in 2007 and for every year thereafter through 2014, the Fed’s books were audited by Deloitte & Touche. That’s a very long eight years that just happen to coincide with the greatest economic upheaval in the U.S. since the Great Depression. (Since 2015, KPMG has issued the annual audited statement of the Fed’s books.)
We’re not suggesting that Deloitte didn’t do its job properly but we are suggesting that the Fed benefited by not having a bunch of different prying eyes looking at its books during those bizarre years when its assets ballooned from $914.8 billion at the end of 2007 to $4.5 trillion in 2014. In just the single year of 2013 the Fed’s assets jumped by a staggering $1 trillion from $2.9 trillion at the end of 2012 to $4 trillion at the end of 2013, according to Deloitte’s audited financial statement of the Fed’s books.
In January of this year, the Government Accountability Office (GAO) released a study indicating that as of October 31, 2016, the government “had disbursed $22.6 billion (60 percent) of the $37.51 billion Troubled Asset Relief Program (TARP) funds” that were directed at helping distressed homeowners as a result of the 2008 Wall Street financial crash and the resulting housing bust. When that report was released, Wall Street On Parade compared it to what the Fed was doing for the banks behind a very dark curtain. We wrote:
“Those paltry billions stand in stark contrast to the $7.8 trillion in near-zero interest loans that the Federal Reserve secretly funneled to just four Wall Street banks from 2007 to 2010. The Fed funneled $2.5 trillion to Citigroup; $2 trillion to Morgan Stanley; $1.9 trillion to Merrill Lynch; and $1.3 trillion to Bank of America. The total amount that the Fed secretly loaned to both U.S. and foreign banks came to $16.1 trillion…
“The American people would still be in the dark about the Federal Reserve’s covert money spigot to the banks except for Senator Bernie Sanders. In 2010, as Congress was debating the Dodd-Frank financial reform legislation, Sanders introduced an amendment that would force the GAO to conduct a one-time audit of the Fed covering its emergency lending programs from December 1, 2007 through July 21, 2010, the date the legislation was signed into law by President Obama. (Because of this abbreviated period of time, the public may still lack full details about Wall Street’s bailout. Sanders got pushback from the White House that prevented him from pushing for a stronger amendment.)
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