A government watchdog in Washington says it wants to know how U.S. loans to the European Central Bank surged in December 2011 to some $95 billion within days of a statement from Federal Reserve Chairman Ben Bernanke that he did not have the intention or authority to use taxpayer dollars to bail out European banks.

The question from Judicial Watch, the public interest organization that investigates government corruption and fights to bring to justice those involved, is contained in a lawsuit by the organization.

Judicial Watch officials said they have sued the Federal Reserve System’s board of governors and the Federal Open Market Committee, which is inside the Fed, over records about the billions in loans.

It is seeking records detailing the Fed’s taxpayer-funded bailouts of European banks in December 2011.

The filing explains that on Dec. 14, 2011, Bernanke told Republican senators he didn’t not have the intention or authority to use taxpayer dollars to bail out troubled banks in Europe.

According to a Bloomberg report on the meeting, Sen. Bob Corker, R-Tenn., confirmed Bernanke “made it ‘very clear'” that the central bank had no intention of rescuing those European institutions.

The report said the boundaries Bernanke set were beyond the existing currency-swap procedures that previously had been adopted. The report said those “currency-swap lines” were able to provide “indirect dollar funding to overseas banks.”

But Judicial Watch reported it was exactly that “currency swap” program that led to nearly “$95 billion in loans to the European Central Bank in December 2011 alone,” just as Bernanke was making the comments.

“Under what is known as a ‘temporary U.S. dollar liquidity swap arrangement,’ the Fed lends U.S. dollars to foreign central banks which then auction these dollars off to their local banks,” Judicial Watch said. “The Fed’s stated intent for initiating the program was to ease lending for European Banks during the financial crisis. The Fed initiated the program in December 2007 and allowed it to expire in February 2010. In May 2010, the Fed rebooted the program and on November 30, 2011, extended it through February 1, 2013. This extension prompted a sharp increase from $400 million to $95 billion in loans in December 2011.”

Early this year, Judicial Watch under the Freedom of Information Act sought records of communications among the Federal Reserve Board of governors, the FOMC, the Federal Reserve Bank of New York and the European Central Bank concerning the November 2011 currency swap extension.

“Judicial Watch also seeks access to records describing the justification for extending the currency swap program, as well as individual details regarding each swap transaction,” the watchdog reported.

Further, since so little information about those who got the money is available, the requests seek “any and all records identifying, describing, or setting forth the identity of any bank or financial institution and the collateral offered by the bank or financial institution” in that time frame.

Bloomberg also reported, “For all the transparency forced on the Federal Reserve by Congress and the courts, one of the central bank’s emergency-lending programs remains so secretive that names of borrowers may be hidden from the Fed itself. As part of a currency-swap plan active from 2007 to 2010 and revived to fight the European debt crisis, the Fed lends dollars to other central banks, which auction them to local commercial banks…While the transactions with other central banks are all disclosed, the Fed doesn’t track where the dollars ultimately end up, and European officials don’t share borrowers’ identities…”

Even a former vice president of the Federal Reserve Bank of Dallas, Gerald O’Driscoll, has criticized the procedures.

Judicial Watch said officials acknowledged getting the records request, but simply didn’t response.

“Chairman Bernanke can dress it up in whatever language he chooses, but these ‘currency swaps’ are nothing more than massive bailouts of European banks,” said Judicial Watch President Tom Fitton. “That we have to sue to get basic information about this massive bailout speaks volumes about the dubious nature of this under the radar program.”

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