Bernanke Wrongly Calls "Bizarre" Allegations Cited by Ron Paul On February 24, Congressman Ron Paul (R-Texas), at a hearing held by the House Financial Services Committee, asked Federal Reserve Chairman Ben Bernanke whether he was aware of allegations that the Federal Reserve had been complicit in the Watergate cover-up and in the illegal funneling of billions of dollars in loans to Iraq's Saddam Hussein: "It has been reported in the past that during the 1980s that the Fed actually facilitated a $5.5-billion loan to Saddam Hussein. And he then bought weapons from our military-industrial complex. And also that is when he invested in a nuclear reactor.... Chairman Bernanke, caught off guard, replied that he found such allegations “absolutely bizarre,” adding that “I have absolutely no knowledge of anything remotely like what you just described. As far as the 10 years, after five years, we produce complete transcripts of every word said in the FOMC meetings. So you have every word in front of you.” "The Federal Reserve under the chairmanship of Author Burns not only kept the Fed from getting entangled in the Watergate coverup, which the Fed's actions had assisted, it allowed false statements about bills the Fed knew were issued by the Philadelphia Fed Bank to stand uncorrected. Blocking information from the Senate and House Banking Committees ... and issuing false information during a perilous government crisis imposed huge costs on the public that had insufficient information to hold the Fed officials accountable for what they had withheld from the Congress. Had the deception been discovered the Fed chairmen following Burns may have been forced to rapidly implement some real transparency to restore the Fed's credibility. That would have reduced or eliminated many of the lies, deceptions, and corrupt practices that are described in my book." Professor Auerbach went on to discuss the shady dealings of one Christopher Drogoul, the manager of the Atlanta branch of the Banca Nazionale del Lavoro (BNL), who, beginning in 1986, became the middleman for a scheme to funnel billions of dollars to Saddam Hussein to support his war against Iran. The loans, supposedly authorized by the U.S. Department of Agriculture and guaranteed by the U.S. government, were of very dubious merit, since Iraq was not deemed credit-worthy. Yet Federal Reserve auditors of the BNL seem to have completely overlooked billions of dollars of very risky loans on BNL-Atlanta's books during a cursory audit that took. While criminal complicity on the part of Fed officials was never proven, the exchange of lavish gifts between officials at the New York Fed and the main American branch of BNL in New York City suggested a level of complicity never fully acknowledged or explained by investigators and prosecutors. |