Federal Reserve Watchdog Finds No Watergate, Iraq Weapons Link

By Dave Clarke and Margaret Chadbourn

The Federal Reserve did not help the Watergate burglars get cash, stonewall congressional inquiries in the 1970s political scandal or help Iraqi leader Saddam Hussein get a $5.5 billion loan to purchase weapons in the 1980s, the agency's inspector general said in a report posted on the Fed's website on Tuesday.

The release touches on subjects seldom associated with the U.S. central bank. It comes after an inquiry that grew out of allegations made by U.S. Representative Ron Paul, a Fed critic and Republican presidential candidate, at a congressional hearing in February 2010.

Following the hearing, then-House Financial Services Committee Chairman Barney Frank asked the Fed to investigate what, if any, inappropriate role the central bank played in the Watergate scandal that brought down the presidency of Richard Nixon or weapons purchases by Saddam Hussein.

"We did not find any evidence of undue political interference with Federal Reserve officials related to the 1972 Watergate burglary or Iraq weapons purchases during the 1980s," the Fed's inspector general told Fed Chairman Ben Bernanke in a letter dated March 30.

"Specifically, regarding the first Watergate allegation, we did not find any evidence of undue political interference with or improper actions by Federal Reserve officials related to the cash found on the Watergate burglars."

The inspector general's office operates independently of the Fed. It said in its report that the Fed's general counsel reviewed the findings and "stated that our report confirmed past statements by Federal Reserve officials."

(Reporting By Dave Clarke; Editing by Bill Trott)

Copyright 2012 Thomson Reuters. Click for Restrictions.

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Comments

[Herbert001]

04:35 PM on 04/06/2012

Mr. Bernanke asked his OIG (the FED's "maytag repairman") to investigate itself. Of course their were no misdeeds and the FED OIG continues to receive his paycheck...

or

Why didn't something Mr. Bernanke describes as "bizarre" take only 16 days, rather than 16 months?

[Jo Rayme]

11:31 AM on 04/05/2012

I smell a Pulitzer. Hilarious...

[Philip74]

03:31 PM on 04/04/2012

lol - wait, do you really expect people to believe this crap...? Fed investigates itself and finds no wrong doing... HAHAHA!

[John McCaffery]

02:47 PM on 04/04/2012

he men in govt suits investigated themselves and found nothing. Imagine that. Add it to the 911 commission, Fast and Furious, John Corzine.

[Jimmy Bean]

09:12 AM on 04/04/2012

The Federal Reserve makes undocumented, paperless and essentially 'dollarless' loans throughout the world under the guise of the IMF.

While no money changes hands, the 'borrower' essentially signs up for endless payments at unreasonable terms leaving the nation on the hook while the IMF brings in their corporate buddies and pays them to seize assets and carry out whatever infrastructure and other industrial reforms are deemed necessary.

The result is an impoverished nation, no longer in charge of their own resources and destiny. The list gets longer every year. Jamaica, Haiti, Ecuador, Bolivia... and if you, as an elected leader resist these efforts, you are easily disposed of.

The Federal Reserve as a stolid entity may not have given Iraq physical dollars, but this nation did make it possible for Hussein to acquire these weapons in terms that have not and probably will not ever be made public.